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Amgen Shares Drop On Light First Quarter Earnings Hit By Lower Prices

Amgen Shares Drop On Light First Quarter Earnings Hit By Lower Prices

Amgen Inc (NASDAQ: AMGN) has a rough start this year after its Q1 March-quarter revenue slipped 4% from the year-ago quarter, while its earnings fell about 10%.

Earnings: Even though unit volumes grew 4% in the quarter, the revenue disappointment was primarily tied to lower prices. Net sales prices fell 7%, year over year, the company said.

Revenue was $5.9 billion, compared with the year-ago $6.2 billion, well below the consensus estimate of $6.25 billion. Amgen said new patient starts were hurt because the pandemic kept people from seeing doctors and getting diagnosed.

Amgen’s most significant product, the autoimmune treatment Enbrel, suffered a 20% revenue drop because both the price and volume fell. Another product, Otezla sales decreased 1% on higher volume but at lower prices. The migraine treatment, Aimovig, grew 20% in volume but delivered 7% lower revenue.

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% Y/Y and 9% sequentially.

Net income fell 10% year over year, to $1.6 billion, or $2.83 a share. Adjusted net income fell 14%, to $2.2 billion, or $3.70 a share, missing consensus of $4.05

Free cash flow (after capital spending) was roughly flat, at $2 billion

Guidance: For 2021, the company expects adjusted earnings as previously guided, at $16 to $17 a share and $25.8 billion to $26.6 billion in sales.

Amgen expects 2021 GAAP net income to fall below $10.70 a share, instead of exceeding $12.12 a share, lower than previous guidance.

The company has increased the share repurchase range from previous guidance of $3.0 billion to $4.0 billion, to $3.0 billion to $5.0 billion.

Additionally, the company agreed with the FDA’s proposed post-marketing requirement to conduct a multi-center randomized clinical trial to compare the safety and efficacy of Lumakras at 960 mg once daily versus 240 mg daily dose.

Lumakras is being evaluated in KRAS G12C-mutant advanced non-small-cell lung cancer. Data from the study is expected in late 2022.

Price Action: AMGN shares are down 3.97% at $245 in the premarket trading on the last check Wednesday.

Image Courtesy: Wikimedia


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