Amgen handily beat Wall Street's earnings forecasts Tuesday, but Amgen stock tumbled after the biotech company scrapped an experimental prostate cancer treatment.
The company didn't provide any insight into its decision-making for AMG 340, the experimental drug tested in metastatic castration-resistant prostate cancer. Amgen picked up AMG 340 in the $900 million acquisition of Teneobio in 2021.
Now, Amgen will take a $650 million net impairment charge related to its decision to ax AMG 340.
On today's stock market, Amgen stock toppled 2.9% to 255.70.
Amgen Stock: 'Puts And Takes'
Piper Sandler analyst Christopher Raymond noted "puts and takes" across the board for Amgen.
Revenue climbed 4% to $6.9 billion and was in line with FactSet-polled analysts' expectations. Adjusted earnings edged 6% higher to $4.96 per share and topped forecasts for $4.68 per share.
Worldwide product sales — which excludes other sources of revenue — missed estimates at $6.55 billion, Raymond said in a report. Further, several of Amgen's biggest products lagged sales projections.
Revenue from Enbrel, which treats autoimmune conditions, came in short at $1.04 billion, down 6%.
Mizuho Securities analyst Salim Syed noted that lung cancer drug Lumakras is facing pressure amid ongoing reimbursement negotiations in France. Meanwhile, inflammation drug Otezla is still experiencing an impact from free drug programs for newly launched competition.
"For the remainder of 2023, we expect demand (for Otezla) to be affected by these free drug programs," Amgen said in a news release.
Obesity Treatment In Focus
More promisingly, sales of Tezspire, Aimovig, Prolia, Xgeva and Evenity beat forecasts, Raymond said. Tezspire is an asthma treatment and Aimovig treats migraines while the latter three are osteoporosis treatments.
Now, Amgen stock analysts are looking ahead to the company's efforts in obesity treatment. Amgen is testing a weight-loss pill called AMG 133 and expects Phase 2 results in "late 2024."
"Management also noted that they have a suite of preclinical obesity assets that they plan to bring forward 'over the next few years,' " Mizuho's Syed said in a report.
He kept his neutral rating and 223 price target on Amgen stock.
Amgen raised its outlook for the year and now expects to earn an adjusted $18.20 to $18.80 per share on $28 billion to $28.4 billion in sales. The guidance boost follows Amgen's successful acquisition of Horizon Therapeutics earlier this month.
Amgen stock analysts called for earnings of $18.36 per share and $27.57 billion in sales.
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