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What's in Store for Amgen (AMGN) This Earnings Season?

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Amgen, Inc. (AMGN - Free Report) will report second-quarter 2021 results on Aug 3, after market close. In the last reported quarter, the company delivered a negative earnings surprise of 7.50%.

The large biotech’s performance has been mixed with earnings beating estimates in three of the trailing four quarters while missing in one. The company delivered a four-quarter earnings surprise of 8.49%, on average.

Amgen Inc. Price and EPS Surprise

Amgen Inc. Price and EPS Surprise

 

 

 

 

 

 

 

 

Amgen Inc. price-eps-surprise | Amgen Inc. Quote

Amgen’s stock has risen 5.4% this year so far compared with an increase of 0.3% for the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research

Factors to Consider

In the second quarter, Amgen expects revenues to grow between 7% and 10% sequentially from the first quarter. In the second quarter, volume growth from Prolia, Otezla Repatha, Nplate, Blincyto, Evenity, Aimovig, and Amgen’s biosimilars portfolio is expected to have been partially offset by biosimilar/generic competition for mature drugs and accelerating erosion in U.S. Parsabiv sales due to changes in reimbursement rules for the drug.

Continued business disruption from COVID-19 is likely to have hurt sales in the second quarter, specially of drugs like Xgeva and Kyprolis.

Lower selling prices due to increased discounting and rebates to maintain formulary access in increasingly competitive categories is expected to have hurt sales of almost all drugs in the quarter.

The respective Zacks Consensus Estimate for Prolia, Xgeva, Blincyto, Repatha and Kyprolis sales is pegged at $777 million, $481 million, $106 million, $291 million and $278 million. The Zacks Consensus Estimate for sales of Otezla is $599 million.

Increased branded and generic competition for its legacy products like Enbrel, Aranesp, Epogen, Neupogen, Neulasta and Sensipar are likely to have hurt the top line. Negative volume and net price trends are likely to have hurt Enbrel’s sales in the second quarter. The Zacks Consensus Estimate for Enbrel sales is $1.09 billion.

However, second-quarter revenues are expected to have been aided by higher other revenues due to recognition of revenues from the collaboration with Eli Lilly (LLY - Free Report) for the manufacture of COVID-19 antibodies

For biosimilars, volume growth may have been partially offset by lower prices due to increased competition.

Cost of sales is expected to have increased as a percent of product sales in the second quarter, reflecting the impact of the Lilly deal. Operating expenses are expected to have increased in the mid-teens percentage range, reflecting the impact of the Lilly deal.

Key Development in the Quarter

In June, the FDA granted accelerated approval to Amgen’s KRAS inhibitor, Lumakras (sotorasib) for the treatment of patients with KRAS G12C-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC), following at least one prior systemic therapy. We expect management to discuss the commercialization plans for Lumakras on the second-quarter conference call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Amgen this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Amgen’s Earnings ESP is -2.74% as the Zacks Consensus Estimate is pegged at $3.96 per share while the Most Accurate Estimate is lower at $3.85. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Amgen has a Zacks Rank #3.

Stocks to Consider

Here are two biotechs stock that have the right combination of elements to beat on earnings this time around:

Moderna (MRNA - Free Report) has an Earnings ESP of +24.12% and a Zacks Rank #3.

Regeneron (REGN - Free Report) has an Earnings ESP of +12.64% and a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank stocks here.