Amgen Q3 - Biosimilar Continues to Grow

The world's largest biotech company, Amgen released its third-quarter earnings that beat the streets expectations. The company saw strong volume growth for the seventh consecutive quarter which can be attributable to new drug launches like migraines drug Aimovig and the launch of biosimilars including Kanjinti for breast cancer.

Revenues for the quarter were down 3% to $5.7 billion year-on-year due to the impact of biosimilars and generic competition against its key products like Neulasta which saw its revenues fall 32%. Drugs that grew by double digits or more include Prolia, Repatha (cholesterol), Aimovig, Parsabiv, Kyprolis and Blincyto. Enbrel, Nuelasta and now Prolia are still the big revenue drivers for Amgen.



Operating income is up 7% to $2.5 billion with margin expansion of 3.1% to 45.3%. That lead to earnings per share increasing by 14% to $3.27 thanks to a reduced number of shares outstanding and a 9% decrease in operating expenses. Share buybacks lowered the number of shares outstanding by 7% year-on-year.

Revenues from Amgen's own biosimilars and something to watch in the short to midterm more than doubled from $82 million to $173 million on a quarter-on-quarter basis. At the current growth rate, these biosimilars will be quite significant in Amgen's life in the next couple of years when they cross the billion dollar mark per quarter.

"Amgen continues to execute well in a dynamic environment, with many of our innovative medicines delivering double-digit, volume-driven growth, complemented by the strong performance of our recently launched biosimilar products," said Robert A. Bradway, chairman and chief executive officer. "We continue to advance numerous first-in-class medicines in our pipeline, while also pursuing external opportunities that will contribute to our long-term growth, such as our pending acquisition of Otezla."

Amgen increased its earnings and revenue guidance expectations for the full year. Earnings are expected to be between $14.20 to $14.45 and revenues to be between $22.8 billion to $23 billion. The shares of the company have started a strong recovery and we expect this to continue as Amgen delivers on its promises; this company is a good alternative to JNJ if you want to avoid the opioid crisis.