Amgen Inc., the world's largest biotech company by revenue, likely will focus on sales prospects for its top drugs and progress on its experimental drugs when it reports third-quarter results after the stock market closes Monday.
WHAT TO WATCH FOR: The maker of Neulasta, for preventing infections in chemotherapy patients, should discuss how much recent safety warnings could dampen sales for two of Amgen's top four drugs. Such biologic drugs, which are produced in living cells, are very powerful but can cause serious side effects.
In June, the Food and Drug Administration said doctors should use lower doses of anemia drugs when treating patients with failing kidneys because of increased risk of stroke, blood clots and death. That will affect sales of Amgen's Aranesp and Epogen. The two multibillion-dollar sellers, which boost production of oxygen-carrying red blood cells and reduce need for painful blood transfusions, each saw sales decline at least 10 percent in the U.S. in the second quarter.
Epogen also faces new limits on reimbursement proposed for patients covered by Medicare and Medicaid. The company has said that if the federal government imposes those limits, on top of the new safety warnings, it could reduce Epogen use by 20 percent to 25 percent.
Analysts also will be watching the sales trend for Amgen's newest drug, Xgeva, which was approved in the European Union in July and in the U.S. last November. Xgeva, which is used to prevent fractures in patients whose cancer has spread to bones, blocks the breakdown of bone cells. It had U.S. sales of $115 million for the first six months of the year.
Xgeva has already exceeded sales for Prolia, a slightly older osteoporosis drug with the same active ingredient but a different dosage. Prolia was launched for preventing fractures in June 2010. In mid-September, it got approval from the Food and Drug Administration for use in two patient groups at high risk of fracture: women getting hormone therapy for breast cancer and men getting hormone therapy for prostate cancer. That should boost future sales.
Amgen is now seeking approval to market Xgeva for men with prostate cancer, to prevent spread of cancer to bones.
The company is awaiting approval in Europe for its Vectibix, for advanced colon cancer in patients with a certain genetic mutation. It's already on sale in the U.S. and some foreign markets.
Amgen executives may discuss integration of cancer therapy developer BioVex Group, which is developing OncoVex for treating malignant melanoma. In July, Amgen said it had temporarily halted another study of OncoVex, for treating head and neck cancers. Amgen bought the company in March.
WHY IT MATTERS: Concerns about safety risks and likely reduction in the U.S. government reimbursements for some of Amgen's key drugs could hurt sales.
On the other hand, Citigroup Global Markets analyst Matthew Dodds expects sales of Enbrel to be strong this quarter because rival Abbott Laboratories' similar drug, Humira, posted better-than-expected U.S. sales on Wednesday. Both drugs are in the class known as anti-TNF agents; they target a substance called tumor necrosis factor that causes inflammation.
WHAT'S EXPECTED: Analysts polled by FactSet, on average, expect earnings per share of $1.29 on revenue of $3.87 billion.
LAST YEAR'S QUARTER: Amgen reported an 11 percent drop in income to $1.24 billion, or $1.28 per share, on revenue of $3.82 billion.