Amgen at 52-week high on solid earnings, test results. (Corporate Focus).

WITH its stock hovering around its 52-week high in recent weeks, Amgen Inc. appears poised for another quarter of solid earnings and high volume of sales of its rheumatoid arthritis drugs.

It may sound like old hat to Wall Street, but it was just last fall when things were not so rosy for the Thousand Oaks-based biotech.

Just after the company acquired Immunex in May 2002 for $10 billion in cash and stock (which resulted in a onetime $3 billion charge for the year), Amgen bosses were already anticipating big sales from Immunex's new anti-inflammatory drug, Enbrel. But instead of the $350 million to $400 million Arugen had projected for the quarter ending Sept. 30, the drug brought in $158 million amid production shortages and supply problems.

"It seemed to be the cap on a lot of other things that weren't going Amgen's way," said Craig West of AG Edwards.

Just a year earlier, the prostate cancer drug, Plenaxis that it was developing jointly with Praecis Pharmaceuticals was rejected by the U.S. Food and Drug Administration. That was followed by unsuccessful clinical trials for a Parkinson's Disease drug it was developing with Baltimore-based Guilford Pharmaceuticals.

The news of Plenaxis' failure was especially bad since Credit Suisse First Boston forecast sales for the drug of $215 million in its first year.

That was then. Today, Amgen is buoyed by early test results of the anti-anemia drug Aranesp, showing its efficacy in treating lymphoid cancer patients.

The results showed that three times as many anemic patients with lymphoid cancers receiving Aranesp experienced increases in hemoglobin levels compared to those who took a placebo. The significance is that Aranesp would help chemotherapy patients since hemoglobin in their blood is reduced significantly by the anticancer treatment.

"These results show real promise for the cancer therapy market," said Adam Walsh, an analyst for Jefferies & Co.

Successful study

Likewise, a Phase 3 study showed Enbrel, a rheumatoid arthritis drug marketed by Amgen and Wyeth Pharmaceuticals, inhibited the progression of joint damage and reduced symptoms when it was combined with the anti-cancer drug, Methotrexate.

The news was followed by word that early results from Phase 2 trials from its experimental cancer drug ABX-EGF showed that it is able to reduce tumors in patients with advanced colon cancer.

"After seeing positive numbers last quarter and good early results for these new drugs, it's looking good for future earnings," Walsh said.

For the quarter ended March 31, Amgen reported a 45 percent profit increase over the same period a year ago. The company posted $493.3 million in net income or $0.37 a share on $1.76 billion in revenue compared to $341 million in net income or $0.32 a share on $1 billion in revenue.

The product sales increase of about 80 percent for the quarter was due mostly to the July acquisition of Immunex which manufactures Enbrel. But higher sales of the anemia drugs Epogen and Aranesp, along with the immune-boosting drugs Neupogen and Neulasta also contributed to the sales jump, the company said.

Improved manufacturing capacity of Enbrel after a Rhode Island plant went on line late fall, gave that drug's sales a boost with $274 million in sales.

Looking for approval

Walsh said the anti-inflammatory drug could also do well as a treatment for psoriasis.

"Given our strong trends, we are raising sales and earnings guidance for the year," said Amgen Chairman and CEO Kevin Sharer in a statement.

He added that the new guidance was raised to reflect $200 million in anticipated sales of Neulasta and Aranesp.

Amgen has raised by 5 percent its 2003 earnings per share forecast to between $1.80 and $1.90 while forecasting a 52 percent sales increase for the year.

On news of the Enbrel and Aranesp studies, the company's shares rose $2.50 to $67.50 last Monday and reaching its 52-week high last Tuesday at $67.55 before dropping to $63.82 on Thursday. The stock's 52-week low was $30.57, reached on July 15.

Amgen's shares had been improving after the company agreed in May to take an estimated 20 percent stake in South San Francisco-based Tularik Inc. which is jointly developing anti-cancer drugs with Amgen.

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Amgen Inc.

YEAR (Dec. 31)                    2002    2001

Revenue (millions)              $5,523  $4,016
Operating Expenses (millions)    2,778   1,849
Operating Income (millions)      2,009   1,723
Net Income (millions)          (1,392)   1,120
Earnings Per Share               (1.2)     1.3

RELATED ARTICLE: SUMMARY

Business: Maker of drugs and therapeutic prod.

Headquarters: Thousand Oaks

CEO: Kevin Sharer

Market Cap: $82.3 billion

Dividend Yield: N/A *

Total Liabilities: $6.1 billion

P/E: 42.8

Long-Term Debt: $3.1 billion

* Company does not pay dividends