Amgen’s 3Q Top Line Gains 12% Fueled By Strong Drug Sales

Amgen Inc.’ 3Q revenues jumped 12% to $6.4 billion year-on-year mainly driven by an 18% increase in drug sales volume. Sales were partially offset by a decline in net selling prices, the biotech company said. Analysts had expected sales of $6.37 billion.

Amgen (AMGN) commented that “physician-patient interactions and prescribing volumes continued to increase” during the quarter. Meanwhile, the company noted that prescribing volumes remained “modestly below” pre-pandemic levels.

Amgen’s 3Q adjusted EPS increased by 19% to $4.37 year-on-year mainly due to higher revenues. The bottom-line results also surpassed analysts’ expectations of $3.78 per share. The company’s CEO Robert A. Bradway said, “Amgen continues to deliver strong, volume-driven growth in a challenging environment, while also advancing new medicines in our pipeline.”

Buoyed by stronger-than-expected 3Q results, Amgen raised its full-year 2020 adjusted EPS guidance range to $15.80-$16.15 from $15.10-$15.75. The company narrowed revenue guidance range to $25.1-$25.5 billion from the earlier projection of $25-$25.6 billion. (See AMGN stock analysis on TipRanks).

Following the earnings release, Mizuho Securities analyst Salim Syed reiterated a Hold rating and a price target of $215 (0.6% downside potential). In a note to investors, Syed wrote, “Topline came in a $100MM higher v consensus on Enbrel, but offset by Repatha and Otezla, but in all cases there was some “sales deductions” that either helped or hurt numbers, so have to consider the quality here a bit. Interestingly all biosimilar products beat consensus — slides consistently say volume growth on these, so that’s good.”

Currently, the Street is cautiously optimistic on the stock. The Moderate Buy analyst consensus is based on 10 Buys and 7 Holds. With shares down over 10% year-to-date, the average price target of $263.08 implies upside potential of about 21.6% to current levels.

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