Amgen first-quarter profit is nearly flat on declining sales

Amgen Inc., the world's largest biotech company in sales, reported first-quarter profit Thursday that topped Wall Street expectations, though they were nearly flat as sales of Amgen's embattled anemia drugs plunged.

The Thousand Oaks-based company posted net income of $1.14 billion, or $1.04 cents a share, for the quarter ended March 31, compared with $1.11 billion, or 94 cents per share, a year earlier.

Excluding stock options and other one-time expenses, the company said, it would have earned $1.22 billion, or $1.12 a share.

On the same basis, Amgen's earnings beat the average estimate of analysts surveyed by Thomson Financial by 8 cents a share.

Amgen's total revenue was $3.61 billion, down from $3.68 billion in the same quarter last year, matching analysts' predictions.

Sales of the company's top-selling anemia drugs fell as warning labels on the drugs were expanded to limit their recommended use to patients with incurable cancers.

Aranesp sales fell 25 percent to $761 million, down from $1.02 billion during the first quarter of 2007. That decline included a 38 percent drop in U.S. demand, the company reported.

First-quarter Epogen sales fell 11 percent to $554 million after bringing in $625 million during the same quarter a year earlier.

Total product sales were off about 1 percent to $3.54 billion compared with last year's first quarter, the company said.

Amgen executives credited previously announced cost-cutting measures with keeping profits level despite the sales drop.

"We continue to be encouraged by the lasting effects of our cost management efforts," Amgen Chief Executive Kevin Sharer said in a statement.

Amgen shares dropped to their lowest value in more than five years during the quarter to $39.16 before ending up slightly at $41.78.

The stock's tepid performance this year comes after a nearly 35 percent plunge in 2007 on worries about the safety of Epogen and Aranesp, which treat chemotherapy-induced anemia.

The Food and Drug Administration last year issued its most serious warning on a class of drugs known as erythropoiesis-stimulating agents, including Aranesp and Epogen. The agency required "black box" labels for the drugs after research suggested high doses increased patients' risk of tumors and death.

In the past, the two drugs together have provided more than 40 percent of the company's revenue but accounted for only 37 percent of the total during the most recent quarter.

Analysts said they were looking to the company's post-menopausal osteoporosis drug candidate denosumab to buoy the company's prospects.

The company said the drug remains "on track" after announcing in January that a trial showed denosumab was 40 percent more effective on some measures than Merck's Fosamax.

Amgen shares were up 20 cents in after-hours trading after closing down 29 cents at $42.40 on the Nasdaq Stock Market before the results were announced.