Amgen tweaked its guidance for the rest of 2021—downward.
Courtesy of Amgen
Amgen got off to a rough start this year. The biotech company’s March-quarter revenue slipped 4% from the year-ago quarter, while its earnings fell about 10%. It sold more products, but at lower prices.
Announcing the results Tuesday, chief executive Robert Bradway said the Covid-19 pandemic hurt the quarter’s first two months, but expressed confidence in the full-year outlook. March is always the company’s weakest quarter, according to the company.
Still, this March quarter was a disappointment. After closing Tuesday at $255 in a flat day for the stock market, shares of Amgen (ticker: AMGN) slid 4.4% after hours, to $244.
Revenue was $5.9 billion, compared with the year-ago $6.2 billion. Analysts surveyed by FactSet had expected $6.27 billion.
Amgen said new patient starts were hurt because Covid kept people from seeing doctors and getting diagnosed. Even so, unit volumes grew 4% in the quarter—so the revenue disappointment was tied mostly to lower prices. Net sales prices fell 7%, year over year, the company said.
Amgen’s biggest product, the autoimmune treatment Enbrel, suffered a 20% revenue drop because both the price and volume fell. Those trends will continue, said Amgen. Another big product, Otezla, sold in higher volume but at lower prices. The migraine treatment Aimovig grew 20% in volume, but delivered 7% lower revenue. Aimovig remains the leader in its drug class, Amgen reassured investors.
The company faces competition from biosimilar versions of some established products. Revenue from white-blood cell stimulant Neulasta fell 21%, to $482 million, as its average U.S. price slipped 30%, year over year, and 9% from the December 2020 quarter.
Net income fell 10% year over year, to $1.6 billion, or $2.83 a share. After excluding nonoperating and noncash expenses, Amgen said net income fell 14%, to $2.2 billion, or $3.70 a share. Analysts had hoped those adjusted earnings would be $4.04 a share. Free cash flow (after capital spending) was roughly flat, at $2 billion. Amgen paid $1 billion in dividends and bought back $900 million worth of stock.
Hoping to offset older products declines with new developments, Amgen had told investors to expect flat results in 2021. It March quarter announcement tweaked that guidance. Adjusted earnings should come in as previously guided, at $16 to $17 a share. But Amgen now expects that 2021 net income could fall below $10.70 a share, instead of exceeding $12.12 a share, as it previously suggested. To support its stock, the company said it may increase its stock buybacks.
Write to Bill Alpert at [email protected]
