MARKET REACTS TO EARNINGS, PRODUCT NEWS FROM AMGEN.

Byline: Dave McNary Staff Writer

Wall Street gave a major endorsement Tuesday to biotech giant Amgen Inc., boosting shares 9 percent in the wake of better-than-expected profits and a bullish outlook for an arthritis drug.

Amgen stock jumped $6 to $72.3125 on heavy volume of 14.4 million shares. Gruntal & Co. repeated its ``strong buy'' rating; Caroline Copithorne at Prudential Securities raised her price target to $89 from $83; and AmeriCal Securities analyst Charles Engelberg said the stock could hit $100.

Wall Street's enthusiasm stems from the growing belief that Amgen is finally making good on its promise to broaden its offerings beyond its flagship Epogen and Neupogen drugs.

``We have not been big cheerleaders for Amgen but they beat everyone's numbers and revealed a depth to their products in development,'' Engelberg said. ``We believe that the stock price has suffered from Wall Street's perception that it didn't have a significant pipeline.''

Amgen disclosed late Monday it expects to file for government approval of a IL-1ra for treatment of rheumatoid arthritis later this year because the Food and Drug Administration has decided the standard ``Phase III'' trial won't be needed. That could mean the new drug would hit the market in the second half of next year, 18 months ahead of what had been previously expected, according to James McCament, editor of the Medical Technology Stock Letter.

``Being cleared from doing the Phase III trial is a big deal,'' McCament said. ``It doesn't happen very often and it means that there's a much higher probability the drug will be approved.''

Analysts believe IL-1ra could compete against Immunex Corp.'s Embrel drug in a market worth $1 billion domestically. ``There's likely to be a fair amount of competition but Amgen's drug could be synergistic with Embrel,'' McCament noted. ``Amgen is a company with good sales force and they're entering a nice attractive market with this.''

About 2.5 million Americans suffer from arthritis and about 20 percent of those have ``moderately severe'' symptoms or worse, according to Engleberg.

Amgen also reported late Monday second-quarter profits rising 24 percent to $267.6 million, or 50 cents a share, on a 25 percent gain in revenues to $820.5 million. Earnings were 4 cents ahead of Wall Street's consensus estimate. The company also said year-end profits should be in the range of $1.90 to $1.95 a share, or a dime ahead of what had been the consensus forecast.

Amgen's other key development drugs include a second-generating chemotherapy treatment drug, a prostate cancer drug and NESP, a successor to its anti-anemia Epogen drug.

Shares of Amgen hit an all-time high of $81.375 in early April but then fell back on worries the company would fall short of profit forecasts. Shares began rising two weeks ago on heavy trading following speculation that Amgen would top forecasts, prompting Amgen management to release earnings 10 days early.