Amgen (AMGN) had a fantastic quarter, beating both top and bottom line projections by cutting R&D expense and increasing sales of its arthritis drug Enbrel. The company upped full-year guidance in anticipation of continued strength in the second half of 2009.
The world’s largest biotechnology company recorded $3.7 billion in revenue, which is 1% less than a year ago, but represents a 12% increase from the first quarter 2009. Weighing on the revenue number was a 16% drop in sales of Aranesp, a treatment for anemia that was once Amgen’s top-selling drug, and unfavorable foreign currency exchange.
More importantly, Amgen continues to generate impressive levels of free cash flow, reaching $1.54 billion in the second quarter, or 41% of sales.
In addition to a strong quarter, Amgen announced an ex-U.S. denosumab partnership with GlaxoSmithKline (GSK). The deal is receiving praise from many analysts since GSK has great experience and the terms of the deal were favorable.
Going forward, investors will be eyeing the FDA advisory committee meeting for denosumab in August, and expectations are very high. Also of note, new data for Vectibix could bring big upside for the stock if the drug yields strong data in the first and second-line colorectal cancer.
AMGN shares finished the day +2.72%
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Peter J. Lazaroff, Investment Analyst
Tuesday, July 28, 2009
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