By Deena Beasley
(Reuters) -Amgen on Tuesday said third-quarter sales rose 5%, but a full-year sales forecast raise only reflected additional revenue from its $27.8 billion acquisition this month of Horizon Therapeutics (NASDAQ:HZNP) and its shares fell nearly 4%.
Sales of some high profile medicines also fell short of expectations, likely contributing to the share move.
Amgen (NASDAQ:AMGN) said it expects to announce findings from an early-stage trial of experimental obesity pill AMG786 in the first half of next year, and to have results from a mid-stage trial of a different, injected obesity candidate, AMG133, by late next year.
"Overall we see management confidence in '133 but ... '786 is more of a 'wild card' given unknown mechanism and no data," Jefferies analyst Michael Yee said in a research note.
Demand for weight-loss drugs has skyrocketed with the global market forecast to reach as much as $100 billion annually within the decade.
Bill Smead, chief investment officer at Smead Capital Management which holds Amgen shares, said Amgen is arriving late to the obesity market, but "this is a slow and steady start wins race."
The Horizon deal marks the California-based biotech's decision to move into the rare disease market, which is not usually subject to the same pricing pressure as therapies for more widely used medicines.
For the third quarter, however, sales of Horizon's flagship thyroid eye disease drug Tepezza fell to $453 million from $491 million a year earlier.
Third quarter sales of Horizon's gout drug Krystexxa rose to $253 million from $192 million.
Amgen raised its post-acquisition forecast for full-year sales to between $28 billion and $28.4 billion from a previous estimate of $26.6 billion to $27.4 billion.
It also raised the low end of its forecast range for 2023 adjusted earnings and now expects $18.20 to $18.80 per share, from $17.80 to $18.80 earlier.
Wall Street analysts, on average, had forecast 2023 earnings of $18.47 per share on revenue of $28 billion, according to LSEG data.
Horizon "is a great rare disease business ... We're confident now that we've officially closed and joined forces," Amgen Chief Financial Officer Peter Griffith said in a phone interview.
The deal closed after the U.S. Federal Trade Commission backed down from its contention that Amgen would be able to leverage its big selling drugs to pressure insurance companies and pharmacy benefit managers to favor Horizon's products.
Excluding a $650 million charge for discontinuing experimental prostate cancer drug AMG340, Amgen said its third quarter profit per share rose 6% to $4.96, topping Wall Street estimates by 29 cents.
Total revenue for the quarter rose 4% to $6.9 billion, in line with analyst expectations.
Quarterly sales of cholesterol drug Repatha rose 31% from a year earlier to $406 million, but fell short of analyst expectations of $416 million.
"Key products like Lumakras or Otezla, or Repatha, they all came in below expectations," said William Blair analyst Matt Phipps.
Sales of cancer drug Lumakras fell 31% to $52 million and sales of psoriasis drug Otezla fell 10% to $567 million.
Sales of Amjevita, Amgen's new biosimilar version of AbbVie (NYSE:ABBV)'s blockbuster arthritis drug Humira, rose 30% to $152 million.