Amgen issued an outlook that discounts its looming acquisition of Horizon Therapeutics. In response, Amgen stock skidded Wednesday morning.
On its face, the company's earnings and sales predictions for the year lagged forecasts following a mixed fourth-quarter report. Amgen spokeswoman Jessica Akopyan noted in an email to Investor's Business Daily that "some analysts are including Horizon contributions, which we are not."
All eyes are now on the company's $28 billion plan to acquire the smaller biotech company. Amgen hopes to wrap that deal in the first half of the year. Excluding the impact of the Horizon deal makes guidance a bit "messy," RBC Capital Markets analyst Gregory Renza said in a note to clients. He sees about $2 billion in revenue from Horizon's products.
This sends "the message that Amgen's portfolio is poised to evolve over the decade," he said.
On the stock market today, Amgen stock fell 2.4% to end the day at 246.41. Shares recently toppled below their 50-day moving average, according to MarketSmith.com.
Amgen Stock: Mixed Earnings Report
During the December quarter, Amgen earned $4.09 per share on $6.84 billion in sales. Earnings fell 7% year over year and lagged the average forecast of analysts surveyed by FactSet by a penny. Sales were flat at $6.84 billion, and beat calls for $6.74 billion.
Sales of Amgen's biggest moneymaker, Enbrel, inched down 1% to almost $1.1 billion, but topped projections for $1.06 billion, Piper Sandler analyst Christopher Raymond said. Enbrel treats a number of inflammatory conditions including arthritis and psoriasis.
Meanwhile, revenue from Otezla, which treats inflammatory conditions, dipped 2% to $616 million. But osteoporosis treatment Prolia generated $992 million, jumping 14%. Raymond noted "a $75 million Prolia beat offset misses by Otezla, Xgeva and Lumakras."
Xgeva is another osteoporosis treatment, while Lumakras is a lung cancer drug. Sales of Xgeva sank 11% to $484 million. Lumakras sales catapulted 58% to $71 million, but lagged forecasts for $95 million, Raymond said in a report. He has an overweight rating on Amgen stock.
William Blair analyst Matt Phipps noted Lumakras took a $12 million one-time hit due to a reimbursement decision in France.
Nplate and Evenity put up some of the strongest growth, soaring 66% and 57%, respectively. Nplate treats low blood platelets. Evenity treats osteoporosis in postmenopausal women at high risk of fractures. Sales of cholesterol medicine Repatha climbed 22% to $333 million.
Guidance Tricky With Horizon Looming
For the year, Amgen projected adjusted earnings of $17.40-$18.60 a share and $26 billion to $27.2 billion in sales, excluding the impact of the Horizon takeover. Amgen stock analysts had predicted earnings of $18.33 a share and $27.98 billion in sales.
"We assume that consensus includes a mix of models that likely do and do not account for the Horizon transaction," Piper Sandler's Raymond said. "We expect Amgen to provide updated fiscal year 2023 guidance once the deal closes."
But Phipps, the William Blair analyst, says removing the potential Horizon sales from his model on Amgen puts the company's forecast below his expectations. He kept his market perform rating on shares.
Beyond Horizon, SVB Leerink analyst David Risinger says there are plenty of moving parts for Amgen this year. The company just launched a biosimilar copy of AbbVie's Humira and the company is actively recruiting patients for its obesity treatment study.
He has a market perform rating on Amgen stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
