Amgen 2020 outlook falls short of Street estimates; shares slump

By Deena Beasley

(Reuters) - Amgen Inc <AMGN.O> on Thursday forecast 2020 earnings well short of Wall Street estimates, sending shares of the largest U.S. biotechnology company down 2.5%.

For the full year, the company forecast earnings of $14.85 to $15.60 per share on revenue as high as $25.6 billion. Analysts had estimated 2020 adjusted earnings of $16.14 on revenue of $25.5 billion, according to Refinitiv IBES data.

The difference is largely due to lower interest income and anticipated accounting for the recently acquired 20.5% stake in China's BeiGene Ltd <6160.HK>, Amgen's chief financial officer, Peter Griffith, said on a conference call.

He said Amgen's net global selling price for its drugs fell 5% in 2019 and is expected to fall again this year by a rate in the low single digits.

"We anticipate increased attention on margins as R&D (research and development) spend ramps," RBC Capital Markets analyst Kennen MacKay said in a research note.

For the fourth quarter of last year, Amgen said product sales fell 2% from a year earlier due to competition from lower-cost generic drugs and biosimilars, but share buybacks reduced the number of shares outstanding, enabling the company to post a per-share profit that topped Wall Street estimates.

Sales for the quarter totaled $5.88 billion. Total revenue fell 1% to $6.2 billion, which was ahead of the average analyst estimate of $6.06 billion.

Quarterly adjusted earnings per share rose 6% to $3.64, beating the average Wall Street estimate of $3.48.

Net earnings fell 5% to $2.85 per share due to higher operating costs partially offset by the lower share count.

Sales of older drugs such as white blood cell booster Neulasta and kidney drug Sensipar fell sharply due to competition from cheaper versions. Neulasta was down 43% at $665 million and Sensipar sales were off by 76% at $107 million.

Sales of newer drugs like cholesterol fighter Repatha and migraine drug Aimovig rose. Repatha was up by 26% to $200 million, while Aimovig rose 3% to $98 million in the quarter.

Amgen said it bought back around 6% of its outstanding shares last year.

Shares of the company were down $5.59, or 2.5%, at $220.56 in after-hours trading.

(Reporting by Deena Beasley; Editing by Bill Berkrot and Leslie Adler)