(Reuters) - Amgen Inc (AMGN.O) on Tuesday reported a higher first-quarter profit, driven by lower taxes and a 3 percent increase in product sales as growth for newer drugs like cholesterol medication Repatha offset weakness in older products.
Shares of Amgen, which fell nearly 2 percent in earlier trading, were down another 1 percent at $170.01 after hours.
Repatha sales, which more than doubled to $123 million, were higher than Wall Street expected, but the product “still has a long way to go to restore confidence that it has multi-billion-dollar sales potential,” JP Morgan analyst Cory Kasimov said in a research report.
Amgen said it expects to continue volume-driven growth as it launches new products including migraine drug Aimovig, which is likely to get U.S. regulatory approval next month. The nation’s largest manager of prescription benefits, Express Scripts, told Reuters it is pressing Amgen and rival migraine drugmakers to reconsider the usual strategy of high list prices and hefty rebates. [L1N1S11CE]
Amgen believes Aimovig has advantages over other migraine drugs and expects a “bolus” of patients once it is approved, Anthony Hooper, the company’s head of commercial operations, said on a conference call with investors.
The biotech company slightly raised the lower end of its full-year financial outlook, and said its adjusted tax rate would be 13.5 percent to 14.5 percent, or half a point less than previously expected.
Amgen posted first-quarter adjusted earnings of $3.47 per share, up from $3.15 a share a year earlier, helped by lower taxes and fewer outstanding shares. Analysts on average expected $3.23 per share, according to Thomson Reuters I/B/E/S.
First-quarter revenue rose 2 percent to $5.55 billion, with sales up 3 percent to $5.34 billion.
Jefferies analyst Michael Yee said the results marked “a good quarter and a good start to the year” for Amgen, while noting that expectations for large-cap biotechnology companies were low after weak performance so far this year as investors see a lack of meaningful catalysts to boost shares.
Amgen’s sales of anti-inflammatory drug Enbrel, faced with more competition in the rheumatology and dermatology sectors, fell 6 percent to $1.05 billion, below Wall Street estimates of $1.09 billion.
For the full year, Amgen said it now expected adjusted EPS of $12.80 to $13.70, compared with $12.60 to $13.70 previously. It raised the lower end of 2018 revenue guidance to $21.9 billion from $21.8 billion and left the upper end unchanged at $22.8 billion.
Reporting by Deena Beasley in Los Angeles; editing by Peter Cooney and Tom Brown