Soaring Sales Lift Amgen’s Profit 23%

Amgen Inc. said Thursday that net income climbed 23% in the second quarter on sharply higher sales of biotechnology drugs for anemia and rheumatoid arthritis.

The Thousand Oaks-based company reported net income of $748 million, or 57 cents a share, compared with $607 million, or 45 cents, in the year-earlier quarter. Revenue rose 27% to $2.6 billion from $2 billion in last year’s second quarter.

Excluding charges related to the 2002 acquisition of Immunex Corp. and other items, Amgen earned $809 million, or 62 cents, beating Wall Street’s estimate by 3 cents, according to a survey of analysts by Thomson First Call.

Amgen continued to gain ground on rival Johnson & Johnson in the anemia drug business. The drugs are used to increase red blood cells in patients with cancer and kidney disease.

Amgen said sales of its anemia drug Aranesp rose 78% to $617 million. Market leader Johnson & Johnson previously reported that sales of its anemia medications declined 8% to $1.9 billion in the second quarter.

Christopher Raymond, an analyst with Robert W. Baird & Co., said Amgen increased Aranesp sales by bundling the drug with a cancer drug called Neulasta. Oncologists receive favorable pricing when they purchase both, he said.

The arrangement gives Amgen a significant advantage, Raymond said. “Amgen will always have a leg up,” said Raymond. “I don’t see how J&J; can compete.”

Sales of Neulasta, and a similar product called Neupogen, rose 14% to $721 million in the second quarter, Amgen said. The drugs spur formation of white blood cells and are used to prevent infections in cancer patients whose immune systems have been weakened by chemotherapy drugs.

Enbrel, a drug for rheumatoid arthritis and psoriasis, had sales of $440 million in the quarter, up 45%.

Amgen released its results after the close of Thursday’s regular Nasdaq trading, during which Amgen’s shares rose 25 cents to $56.10. But in after-hours trading, the shares sank to as low as $54.75, reflecting disappointment among some investors that the company did not raise its profit estimate for the year.

Amgen has said it expects adjusted earnings per share of $2.30 to $2.40.

Amgen Chairman and Chief Executive Kevin Sharer told investors on a conference call that Amgen planned to increase research and development expenses in the second half of the year. The company is set to begin a key clinical trial for AMG 162, an osteoporosis drug, he said.