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Can Newer Drugs Help Amgen (AMGN) Beat on Earnings in Q2?
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We expect Amgen Inc. (AMGN - Free Report) to beat expectations when it reports second-quarter 2019 results on Jul 30, after market close. Amgen delivered positive earnings surprise of 3.19% in the last reported quarter.
Amgen shares have declined 10.6% this year so far against 0.6% increase registered by the industry during this period.
Amgen’s performance has been impressive, with the company delivering a positive surprise in each of the trailing four quarters with the average being 6.20%.
Let’s see how things are shaping up for the company this quarter.
Factors at Play
In the second quarter, higher sales of products like Prolia, Xgeva, Kyprolis and Blincyto should make up for lower sales of Amgen’s mature drugs like Enbrel, Aranesp, Epogen, Neupogen and Neulasta, which are facing an array of branded and generic competitors. The Zacks Consensus Estimate for Enbrel sales is $1.26 billion.
Sales of Prolia, Xgeva, Blincyto, Parsabiv and Nplate should continue to be driven by higher demand trends. Kyprolis sales should continue to be driven by growth in key markets including United States. The respective Zacks Consensus Estimate for Prolia, Xgeva, Blincyto, Parsabiv and Kyprolis sales is pegged at $670 million, $478 million, $69 million, $154 million and $267 million.
Biosimilars could once again be an important contributor to top-line growth. On the first quarter call, Amgen had said that Kanjinti (biosimilar of Roche’s [(RHHBY - Free Report) ] Herceptin) and Amgevita (biosimilar of AbbVie’s Humira) were off to a strong start in Europe, which can contribute to biosimilars sales in the second quarter. Though Kanjinti and Mvasi (biosimilar of Roche’s Avastin) were launched in the United States in July, these will not contribute to second-quarter sales.
In the first quarter, pricing pressure hurt sales of several drugs, mainly Repatha and Aimovig. Though Repatha sales are gaining due to higher unit demand, it is being partially offset by lower prices. Regarding Aimovig, discounts and rebates offered to improve coverage led to lower selling price of the drug in the first quarter. Back then, the company had said that approximately 200,000 new patients in the United States have tried Aimovig since launch, suggesting that there remains growth potential. It remains to be seen if sales trends of Repatha and Aimovig improve in the second quarter. The Zacks Consensus Estimate for Repatha sales stands at $159 million.
Regarding mature products, several generic versions of Neupogen have been launched, which is significantly hurting sales. Two companies, Mylan and Coherus launched biosimilars of Neulasta in the United States in mid-2018/early 2019 while three long-acting biosimilar competitors were launched in the EU. These launches are hurting sales of Neulasta. More biosimilars are expected to be launched in 2019, which will put further pressure on Neulasta sales. Pfizer’s (PFE - Free Report) Retacrit, the first biosimilar version of Epogen, was launched in November and other biosimilar versions of Epogen may also receive approval in 2019. Sensipar lost patent exclusivity in March 2018. Generics have been launched (at-risk), which is hurting sales.
Another important drug, Evenity, was launched in the United States in April and approved in Japan in January for treating osteoporosis in postmenopausal women at high risk of fracture. However, in the EU, it was given a negative opinion by the Committee for Medicinal Products for Human Use (CHMP). Management may expect investor questions on the adverse CHMP opinion and commercial plans for this drug on the call.
Earnings Whispers
Our proven model shows that Amgen is likely to beat estimates in the soon-to-be-reported quarter because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($3.61 per share) and the Zacks Consensus Estimate ($3.56 per share), is +1.17%. 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. The combination of Amgen’s Zacks Rank #3 and positive ESP makes us confident of an earnings beat in the upcoming release.
Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Another Stock to Consider
Here’s a large biotech stock that also has the right combination of elements to beat on earnings this time around:
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Can Newer Drugs Help Amgen (AMGN) Beat on Earnings in Q2?
We expect Amgen Inc. (AMGN - Free Report) to beat expectations when it reports second-quarter 2019 results on Jul 30, after market close. Amgen delivered positive earnings surprise of 3.19% in the last reported quarter.
Amgen shares have declined 10.6% this year so far against 0.6% increase registered by the industry during this period.
Amgen’s performance has been impressive, with the company delivering a positive surprise in each of the trailing four quarters with the average being 6.20%.
Amgen Inc. Price and EPS Surprise
Amgen Inc. price-eps-surprise | Amgen Inc. Quote
Let’s see how things are shaping up for the company this quarter.
Factors at Play
In the second quarter, higher sales of products like Prolia, Xgeva, Kyprolis and Blincyto should make up for lower sales of Amgen’s mature drugs like Enbrel, Aranesp, Epogen, Neupogen and Neulasta, which are facing an array of branded and generic competitors. The Zacks Consensus Estimate for Enbrel sales is $1.26 billion.
Sales of Prolia, Xgeva, Blincyto, Parsabiv and Nplate should continue to be driven by higher demand trends. Kyprolis sales should continue to be driven by growth in key markets including United States. The respective Zacks Consensus Estimate for Prolia, Xgeva, Blincyto, Parsabiv and Kyprolis sales is pegged at $670 million, $478 million, $69 million, $154 million and $267 million.
Biosimilars could once again be an important contributor to top-line growth. On the first quarter call, Amgen had said that Kanjinti (biosimilar of Roche’s [(RHHBY - Free Report) ] Herceptin) and Amgevita (biosimilar of AbbVie’s Humira) were off to a strong start in Europe, which can contribute to biosimilars sales in the second quarter. Though Kanjinti and Mvasi (biosimilar of Roche’s Avastin) were launched in the United States in July, these will not contribute to second-quarter sales.
In the first quarter, pricing pressure hurt sales of several drugs, mainly Repatha and Aimovig. Though Repatha sales are gaining due to higher unit demand, it is being partially offset by lower prices. Regarding Aimovig, discounts and rebates offered to improve coverage led to lower selling price of the drug in the first quarter. Back then, the company had said that approximately 200,000 new patients in the United States have tried Aimovig since launch, suggesting that there remains growth potential. It remains to be seen if sales trends of Repatha and Aimovig improve in the second quarter. The Zacks Consensus Estimate for Repatha sales stands at $159 million.
Regarding mature products, several generic versions of Neupogen have been launched, which is significantly hurting sales. Two companies, Mylan and Coherus launched biosimilars of Neulasta in the United States in mid-2018/early 2019 while three long-acting biosimilar competitors were launched in the EU. These launches are hurting sales of Neulasta. More biosimilars are expected to be launched in 2019, which will put further pressure on Neulasta sales. Pfizer’s (PFE - Free Report) Retacrit, the first biosimilar version of Epogen, was launched in November and other biosimilar versions of Epogen may also receive approval in 2019. Sensipar lost patent exclusivity in March 2018. Generics have been launched (at-risk), which is hurting sales.
Another important drug, Evenity, was launched in the United States in April and approved in Japan in January for treating osteoporosis in postmenopausal women at high risk of fracture. However, in the EU, it was given a negative opinion by the Committee for Medicinal Products for Human Use (CHMP). Management may expect investor questions on the adverse CHMP opinion and commercial plans for this drug on the call.
Earnings Whispers
Our proven model shows that Amgen is likely to beat estimates in the soon-to-be-reported quarter because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($3.61 per share) and the Zacks Consensus Estimate ($3.56 per share), is +1.17%. 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. The combination of Amgen’s Zacks Rank #3 and positive ESP makes us confident of an earnings beat in the upcoming release.
Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Another Stock to Consider
Here’s a large biotech stock that also has the right combination of elements to beat on earnings this time around:
Gilead Sciences, Inc. (GILD - Free Report) with an Earnings ESP of +3.20% and a Zacks Rank #2. The company is scheduled to release results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>