Amgen sets 'reasonable expectations' with lower 2017 sales guidance: analyst

Amgen’s revenue for 2016 was nearly $23 billion.

Amgen beat analyst expectations on sales and EPS in fourth-quarter results released Thursday, but the drugmaker rolled out 2017 guidance lower than Wall Street expected.

In the fourth quarter, the Californian Big Biotech posted total revenue of $5.965 billion, handily beating consensus estimates of $5.76 billion. Adjusted earnings per share came in at $2.89, ahead of consensus estimates by 10 cents.

Despite that performance, the company presented 2017 revenue and non-GAAP EPS guidance below consensus estimates. It’s expecting $22.3 billion to $23.1 billion in revenues and non-GAAP EPS between $11.80 and $12.60.

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In issuing that guidance, Amgen “set reasonable expectations for 2017,” according to a note by analysts at Barclays. It’s facing potential biosimilar and pricing challenges on key meds Epogen, Neulasta and Enbrel, the note says, but the company can still can “generate modest EPS growth mainly through operating leverage.”

Amgen may have some reprieve on the biosimilar front, though, as Sandoz recently indicated it wouldn’t launch its version of anti-TNF med Enbrel before 2018 due to a legal fight.

Also on Thursday afternoon, Amgen reported that cholesterol med Repatha “significantly” reduced cardiovascular risks in a phase 3 trial. It’ll present the data at a conference in March.

Related: Amgen's Repatha wins in outcomes trial, but is the score high enough?

Bernstein analyst Ronny Gal said in a note that the PCSK9 drug now looks like a “potentially big opportunity” and could reach $4 billion to $5 billion in sales if Amgen can successfully edge out Regeneron and its Praluent.

A judge last month ordered Regeneron and partner Sanofi to stop marketing their PCSK9 option.

For the fourth quarter, Amgen's Enbrel beat analyst estimates by $199 million and anemia treatment Epogen beat by $11 million, with sales for other drugs Aranesp, Prolia and Repatha also coming in above consensus. Neulasta, Neupogen, Xgeva and Kyprolis fell short of consensus on the period.

Despite a wave of public and political attention on drug prices, the Big Biotech boosted prices on several meds in January, including an 8.4% hike on Enbrel.

Amgen’s revenue for 2016 was nearly $23 billion, up 6% from $21.66 billion in 2015. Non-GAAP EPS for the year was $11.65, a 12% increase.


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