Amgen Inc. said today its third quarter earnings more than quadrupled, largely because it took an $554 million charge related to an acquisition of Tularik Inc. in the same period a year ago.
SAN FRANCISCO — Amgen Inc. said today its third quarter earnings more than quadrupled, largely because the world’s most valuable biotechnology company took an exceptional $554 million charge related to an acquisition of Tularik Inc. in the same period a year ago.
Sales of the Thousand Oaks, Calif.-based company’s stable of drugs also contributed to Amgen’s strong quarter.
Amgen reported net income of $967 million, or 77 cents a share, up from $236 million, or 18 cents a share, in the year-ago period. Excluding expenses, Amgen earned $1.1 billion, or 85 cents a share, up from $839 million, or 64 cents, a year ago.
On that basis, the earnings exceeded Wall Street analysts’ expectations by 3 cents, according to a survey by Thomson Financial.
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Amgen’s sales for the quarter rose 19 percent to $3 billion. The company also said for the year it still expects to earn between $3.10 and $3.20 a share before special charges.
The company released the financial report after the markets closed.
Amgen shares rose $2.22, or 2.9 percent, to close at $78.09 in trading on the Nasdaq Stock Market. In after hours trading, shares dropped $3.59, or 4.6 percent, to $74.50.
Analysts said investors were expecting stronger sales, especially from the company’s two leading anemia-fighting drugs Epogen and Aranesp.
Epogen sales amounted to $599 million in the quarter, a 12 percent decrease from $681 million in sales from a year ago. The Epogen drop off was expected as more doctors’ continue to prescribe the company’s longer-lasting version of the drug called Aranesp. Still, analysts expected Epogen sales of $673 million for the quarter.
Sales of Aranesp also missed analysts expectations of $866 million. Instead, Aranesp rang up $840 million in sales, a 38 percent increase over the $608 million in sales in the third quarter last year. Many chemotherapy patients use Aranesp to battle anemia.
“Epogen and Aranesp sales do appear light in the quarter,” Deutsche Bank analyst Jennifer Chao said.
Chief Executive Kevin Sharer and other Amgen executives told analysts during a conference call Wednesday that they don’t see a downward trend occurring and chalked up the missed expectations to normal sales fluctuations in the quarter.
“We feel a strong momentum in the business right now,” Sharer said. “It looks to us that we are operating at a very high level of effectiveness.”
Amgen’s fierce rival in the chemotherapy market, Johnson & Johnson accused the company of illegal Aranesp sales practices and sued in federal court earlier this month, alleging antitrust violations. Johnson & Johnson alleged that Amgen has captured 66 percent of the chemotherapy market because it forces cancer clinics wanting price breaks on two other popular Amgen products — Neulasta and Neupogen — to purchase Aranesp. Amgen denies any wrongdoing.
“It is without merit and we intend to defend our position aggressively in court,” Sharer said. He said the contracts the cancer clinics signed for discounted prices are legal and commonplace.
Neulasta and Neupogen boost white blood cell production and help fight infections in cancer patients. For the quarter, combined sales of the two drugs increased 17 percent to $882 million in the quarter compared to $752 million a year ago.
Sales of Amgen’s rheumatoid arthritis drug Enbrel surged 35 percent to $668 million compared to $496 million in the same 2004 period.