Amgen Inc. reported flat fourth-quarter earnings attributable to a 25% drop in sales for one of its top-selling products, the anemia drug Aranesp.
The Thousand Oaks, Calif., biotechnology giant also issued an updated financial forecast.
Amgen shares closed up 4.7% at $48.28 in after-hours trading.
Amgen earned $835 million, or 76 cents a share, in the quarter compared with $833 million, or 71 cents, in the year-earlier period. Average shares outstanding fell 7.1% to 1.09 billion.
Both periods reflected various charges. Adjusted earnings were $1 a share versus 90 cents.
Revenue declined 2% to $3.75 billion from $3.84 billion.
Still, Amgen's results topped Wall Street expectations. A poll of analysts by Thomson Financial pegged the results at 97 cents a share of earnings on $3.54 billion of revenue.
The company said it now expects to earn an adjusted $4 to $4.30 a share on revenue of $14.2 billion to $14.6 billion in 2008. A Thomson Financial poll has Amgen earning $4.37 a share on revenue of $14.49 billion.
Sales of Amgen's top-selling Aranesp dropped to $827 million. Epogen, a forerunner to Aranesp, also saw sales decline, down 3% to $638 million. The drugs, which are based on the hormone erythropoietin, are used to treat anemia associated with either kidney failure or chemotherapy.
Last year "was Amgen's most challenging year," Chairman and Chief Executive Officer Kevin Sharer said in a statement. "Despite the unexpected reduction in revenues of our erythropoietin products, we delivered earnings per share very close to the low end of our original guidance."
Sales of both drugs have been under pressure following changes in Medicare reimbursement policy and a move by the Food and Drug Administration in November to strengthen safety warnings in the drugs' prescribing information. The drugs are also beginning to face competition from generic versions overseas.
Amgen said Thursday that it is still in talks with the FDA about further revisions to the products' labels. It added it was also discussing labeling changes with European regulators.
On a conference call with investors Thursday night, Amgen management said that going into 2008, Aranesp sales appeared to be "flat but stable."
They said the introduction of generic versions of the drug overseas has so far resulted only in "mild price erosion" for Aranesp. They added, however, than any additional labeling or reimbursement changes could further hurt sales.
Earlier this week, Johnson & Johnson which markets Epogen under the names Procrit and Eprex, reported fourth-quarter sales of those drugs also were down 25% from the previous year.
In August, Amgen said it planned to slash 14%, or about 2,600, of its workers because of a slowdown in sales for its anemia drugs.
Sales of Amgen's other drugs were mixed.
Combined sales of Neulasta and Neupogen showed solid growth, rising 9% to $1.12 billion from a year earlier. The drugs help ward off infection in patients undergoing chemotherapy.
Sales of Amgen's new colorectal-cancer drug Vectibix, however, saw sales dip to $33 million from $41 million in third-quarter 2007. Amgen attributed the slide to a decline in segment share and size.
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