Posts for Ticker ‘Anemia’

Interpreting Amgen Sales From J&J’s PROCRIT (AMGN, JNJ)

Shares of Amgen Inc. (NASDAQ:AMGN) are under bit of pressure this morning, although not from any direct news from the company itself.  Luckily for Amgen, much of the bad news may already be baked into the biotech cake.  Genentech’s slightly soft top-line results aren’t a great development for biotechs in general, but the real issue may revolve around competitor (actually, its sales partner) anemia drug sales out of Johnson & Johnson (NYSE:JNJ).  J&J and Amgen have been feeling sales pressures since their anemia drugs came under fire and have had to carry a black box warning label.

J&J said in its drug unit that growth was impacted by lower sales of anemia drug PROCRIT, primarily due to a decline in the market related to a labeling change made this past March and a decision memorandum issued by the Centers for Medicare & Medicaid Services under its national coverage analysis process.  J&J licenses PROCRIT from Amgen.  If you review the sales of this in J&J’s release, PROCRIT sales in the U.S. were down year over year by 27% to $380 million (from $522 million), although international PROCRIT sales rose 9% to $302 million.  Total PROCRIT sales were down 14.6% to $682 million.

The good news is that this was mostly a known event, at both companies.  Wall Street has systematically trimmed earnings and revenue projections for Amgen throughout 2007.  The key difference in these companies is that Amgen is much more dependent upon on anemia drug sales for about half of its sales, whereas J&J’s 5% exposure to anemia sales is relatively just a line-item on a long-term basis.

We’ll find out Amgen’s earnings on October 24: analysts are looking for total revenues of $3.56 Billion (down from $3.612 Billion in Q3 2006).  We’ll follow up with a more detailed Amgen preview using some of these interpolations for the bigger picture ahead of its earnings release.  Amgen shares are only down 0.2% at $57.55, and the 52-week trading range is $48.30 to $77.00.  In late 2005, Amgen traded over $80.00. 

Jon C. Ogg
October 16, 2007

Posted on: October 16, 2007 – 9:07 am in Biotech, , , , , ,

Amgen Set To Run (AMGN, JNJ, BIIB)

Amgen Inc. (NASDAQ:AMGN) is seeing shares trade up another 2% pre-market after yesterday’s decision where an FDA panel rejected a proposal to set a specific target for red blood-cell levels in kidney-failure patients being treated with anti-anemia.  The panel suggested a slightly broader range for hemoglobin values that are used to measure red blood-cell levels.  This should remove part, once again part, of the anemia woes that have been hampering Amgen every day and should even remove a sore on Johnson & Johnson (NYSE:JNJ).

Last week 24/7 Wall St. outlined developments creating an "If, Then" scenario that could take Amgen’s stock significantly higher.  This move will act as the first catalyst in this scenario, and this stock was battered and tattered after it couldn’t catch a break anywhere.  If the Medicare reimbursement help from Congress stays as is, then the road to a partial recovery is set.  We even compared this to a situation that plagued Biogen-Idec (NASDAQ:BIIB) back in 2005.  The circumstances are of course different, but the impact and path surrounding the stock reactions and future paths is just too difficult to not notice.

This follows the March decision out of the FDA to put a black box warning on the label of these erythropoiesis-stimulating agents, or ESAs.  As sales of the three leading drugs in this subset exceeded $10 Billion, these had been seeing a sharp decline in sales as the FDA had been investigating higher doses.  A formal hemoglobin level was not reached by the FDA panel and the verbage is still unclear, but this is still far better than original fears of lower hemoglobin rates.

So far UBS is the only upgrade that was noticed on Amgen (AMGN), although its sell rating was only raised to Neutral.  The August short interest was more than 28 million shares, up from 26.9 million shares in July.  If those shorts haven’t started covering yet, they have to at least be thinking about it.  Amgen is still going to be treated more like a Big Pharma drug company in the future rather than one of the greatest biotechs on the planet, but this is a clear path to recovering some of its huge losses.

Amgen saw shares rise over 5.5% yesterday to $53.88 on the win, and shares are trading north of $55.00 in pre-market trading. 

Jon C. Ogg
September 12, 2007

Jon Ogg produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER; he does not own securities in the companies he covers.

Posted on: September 12, 2007 – 7:25 am in Biotech, FDA, , , , , , , , ,

Biotech Implosion: ICAgen (ICGN)

ICAgen’s (ICGN-NASDAQ) stock is being crushed in after-hours trading, although the trading volume is very light.  Shares are down 37% to $1.15 after closing down 2.6% today.  Read on, because this one sounds in trouble.

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Posted on: April 3, 2007 – 4:44 pm in Biotech, , , , , ,