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Amgen profts blaze past expectations

By   /   Wednesday, October 22nd, 2008  /   Comments Off on Amgen profts blaze past expectations

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Thousand Oaks-based Amgen on Oct. 22 posted third-quarter profits of $1.16 billion, or $1.09 a share, beating analyst expectations. Revenue also beat expectations, rising to $3.8 billion, or 7 percent, compared to last year’s $3.6 billion.

In after-hours trading, shares of Amgen, the world’s largest biotech firm by market capitalization, rose to the $54 range, or about 3 percent, immediately after the news. Analysts surveyed by Yahoo! Finance had predicted third-quarter earnings per share of $1.08 on revenue of $3.7 billion.

Amgen shares had slumped earlier in the year after layoffs and bad regulatory news. They resurged on promising test reports on a new osteoporosis drugs and on nervous investors moving toward what are viewed as more recession-proof stocks. Although recent weeks have stung the stock, shares are still up for the year.

At a corporate leadership breakfast sponsored by California Lutheran University on Oct. 21, Scott Foraker, an executive vice president in charge of Amgen’s research and development activities, spoke to a crowd of about 150 people and provided insights to how Amgen – Ventura County’s largest private employer with 6,800 workers – built itself from a start-up in the mid-1980s to a Fortune 200 company with a market capitalization of about $55 billion.

For one thing, Foraker said, the company knew when to take big risks, betting the company on patent battles or legal tussles, such as the wrangling over whether and how to license one of its prime money-makers, the anemia drug Aranesp, to pharmaceutical giant Johnson & Johnson.

“We rolled the dice with that arbitration,” Foraker said. “We rolled the dice and won.”

Amgen has also timed well its manufacturing investments, which are often hundreds of millions of dollars. A company that pulls the trigger too early or too late, Foraker said, risks either losing its investment or running short of its drug.

“Making biotech products is tough – many companies have gotten this wrong,” Foraker said. “It’s not like making pills.”

Foraker also said that Amgen has leavened its blockbuster drugs small-population offerings such as Nplate, a treatment for a rare immune system disease that reduces platelet counts.

“It certainly won’t be our biggest drug,” Foraker said. But, “this is the only drug on the market for low platelet counts.”

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