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In the third quarter, Amgen Inc. (NASDAQ: AMGN) continued to manage the decline of its top two products with an interesting mixture of innovation and arithmetic. Even though operations produced a much lower profit, huge buybacks during the three months ending in September, and earlier this year, allowed earnings per share to keep moving in the right direction.
Amgen Inc. results: The raw numbers
| Metric | Q3 2018 | Q3 2017 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $5.9 billion | $5.77 billion | 2% |
| Income from operations | $2.32 billion | $2.44 billion | (5%) |
| Earnings per share | $2.86 | $2.76 | 4% |
Data source: Amgen Inc.
What happened with Amgen Inc. this quarter?
Sales of the company's top two drugs, Neulasta and Enbrel, fell 5% and 6%, respectively, compared with the previous year. Luckily, Amgen has several recently launched drugs growing fast enough to offset most of the losses.
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Sales of denosumab, Amgen's blockbuster bone density drug, rose 13% to $965 million in the third quarter.
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Aimovig, a next-generation migraine prevention therapy with blockbuster expectations, finished the third quarter with 100,000 patients on treatment. As Aimovig is the first of three drugs of the same class to earn approval this year, Amgen has been offering temporary discounts to maintain a leading share of the burgeoning U.S. market. As a result, sales of the Novartis (NYSE: NVS) partnered treatment only reached $22 million during its first full quarter on the market.
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Huge Repatha rebates helped sales of the cholesterol-reducing injection rise 30% to $120 million through increased volume. More recently, Amgen slashed the list price that patient co-pays are often based on, but we still don't know how much of a difference this will make to the net price Amgen receives for the drug.
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Sales of multiple myeloma treatment Kyprolis rose 12% to $232 million. In October, the FDA approved a once-weekly dosing option that could give sales a boost going forward.
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Sales of the company's first bi-specific antibody, Blincyto, climbed 12% to $58 million. In September the company earned approval to treat leukemia patients in Japan with the treatment.
Image source: Getty Images.
Amgen also returned an impressive $1.7 billion to shareholders in the form of share repurchases. Although the company reported a 5% operating income reduction, massive share repurchases that have lowered the outstanding share count around 10.4% in 2018 allowed the company to report a 4% earnings gain on a per-share basis. Fewer shares will also make it a lot easier to keep making dividend payments as Neulasta and Enbrel continue losing ground to biosimilar competition.