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Amgen (AMGN) to Report Q3 Earnings: What's in the Cards?
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Amgen, Inc. (AMGN - Free Report) will report third-quarter 2021 results on Nov 2, after market close. In the last reported quarter, the company delivered a negative earnings surprise of 6.05%.
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 7.12%, on average.
Amgen’s stock has declined 9.6% this year so far compared with a decrease of 11.3% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
In the third quarter, volume growth of Prolia, Xgeva, Kyprolis, Repatha, Nplate, Blincyto, Evenity, 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.
The respective Zacks Consensus Estimate for Prolia, Xgeva, Blincyto, Evenity, Repatha and Kyprolis sales is pegged at $802 million, $508 million, $105 million, $146 million, $314 million and $286 million.
In the second quarter, Amgen did see recovery in patient visits and lab test procedure trends, though they remained below the pre-pandemic levels. Moreover, new patient starts remained suppressed due to a cumulative decline in diagnoses rates amid the pandemic, a trend expected to have hurt its business in the third quarter as well.
Lower pricing and unfavorable changes to estimated sales deductions hurt sales of Otezla in the second quarter despite a recovery in the dermatology segment which benefited volumes. It remains to be seen if sales have improved in the third quarter. The Zacks Consensus Estimate for Otezla is $588 million. Amgen had acquired global commercial rights to Otezla from Celgene, which is now a part of Bristol-Myers (BMY - Free Report) .
Lower selling prices due to increased discounting and rebates to maintain formulary access in increasingly competitive categories are expected to have hurt sales of almost all drugs in the quarter.
Also, increasing branded and generic competition for its legacy products like Enbrel, Aranesp, Epogen, Neupogen, Neulasta and Sensipar is likely to have hurt the top-line. Negative volume and net price trends are likely to have hurt Enbrel’s sales in third quarter.
We expect management to discuss initial sales numbers for Amgen’s KRAS inhibitor, Lumakras, which was approved by the FDA in June 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.
For biosimilars, volume growth may have been partially offset by lower prices due to increased competition.
As far as costs are concerned, while R&D costs are expected to increase, SG&A expenses are expected to have declined in the third quarter.
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 -0.31% as the Zacks Consensus Estimate is pegged at $4.20 per share while the Most Accurate Estimate is lower at $4.19. 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 some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Image: Bigstock
Amgen (AMGN) to Report Q3 Earnings: What's in the Cards?
Amgen, Inc. (AMGN - Free Report) will report third-quarter 2021 results on Nov 2, after market close. In the last reported quarter, the company delivered a negative earnings surprise of 6.05%.
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 7.12%, on average.
Amgen Inc. Price and EPS Surprise
Amgen Inc. price-eps-surprise | Amgen Inc. Quote
Amgen’s stock has declined 9.6% this year so far compared with a decrease of 11.3% for the industry.
Factors to Consider
In the third quarter, volume growth of Prolia, Xgeva, Kyprolis, Repatha, Nplate, Blincyto, Evenity, 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.
The respective Zacks Consensus Estimate for Prolia, Xgeva, Blincyto, Evenity, Repatha and Kyprolis sales is pegged at $802 million, $508 million, $105 million, $146 million, $314 million and $286 million.
In the second quarter, Amgen did see recovery in patient visits and lab test procedure trends, though they remained below the pre-pandemic levels. Moreover, new patient starts remained suppressed due to a cumulative decline in diagnoses rates amid the pandemic, a trend expected to have hurt its business in the third quarter as well.
Lower pricing and unfavorable changes to estimated sales deductions hurt sales of Otezla in the second quarter despite a recovery in the dermatology segment which benefited volumes. It remains to be seen if sales have improved in the third quarter. The Zacks Consensus Estimate for Otezla is $588 million. Amgen had acquired global commercial rights to Otezla from Celgene, which is now a part of Bristol-Myers (BMY - Free Report) .
Lower selling prices due to increased discounting and rebates to maintain formulary access in increasingly competitive categories are expected to have hurt sales of almost all drugs in the quarter.
Also, increasing branded and generic competition for its legacy products like Enbrel, Aranesp, Epogen, Neupogen, Neulasta and Sensipar is likely to have hurt the top-line. Negative volume and net price trends are likely to have hurt Enbrel’s sales in third quarter.
We expect management to discuss initial sales numbers for Amgen’s KRAS inhibitor, Lumakras, which was approved by the FDA in June 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.
For biosimilars, volume growth may have been partially offset by lower prices due to increased competition.
As far as costs are concerned, while R&D costs are expected to increase, SG&A expenses are expected to have declined in the third quarter.
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 -0.31% as the Zacks Consensus Estimate is pegged at $4.20 per share while the Most Accurate Estimate is lower at $4.19. 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 some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) has an Earnings ESP of +10.62% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron (REGN - Free Report) has an Earnings ESP of +8.78% and a Zacks Rank #1.