Wednesday, October 24, 2007
Amgen's earnings slumped following its safety problems with its anemia drugs Aranesp and Epogen. Here's an excerpt from the Wall Street Journal's article, Amgen Earnings Slump, by Andrew Edwards:
Amgen Inc.'s third-quarter net income tumbled as the biotechnology company posted restructuring charges, and Aranesp sales continued to decline.
The results include a $590 million write-off on in-process research and development related to the acquisitions of Alantos and Ilypsa, $293 million in restructuring charges, and a $90 million write-off of inventory because of changed regulations and reimbursements in the quarter, the Thousand Oaks, Calif., company said. International sales rose 12%, while U.S. sales fell 1.9%. Excluding the impact of currency fluctuations, the company said total product sales fell 1%.
Sales of anemia drugs Aranesp and Epogen, which account for almost half of Amgen's sales, dropped 23% and 5%, respectively. The two drugs increase red-blood-cell production, reducing the need for blood transfusions for patients on dialysis and chemotherapy. Their sales have hemorrhaged since a Food and Drug Administration warning in March that the drugs, when used in high doses, can increase the risk of blood clots and death in cancer and kidney-disease patients.
The study prompted Medicare to set limits on reimbursements for the drugs, which cost the agency billions of dollars every year.