EARNINGS PREVIEW: US Biotechs Seen Posting Strong 2Q Results
July 22 2011 - 12:14PM
Dow Jones News
TAKING THE PULSE: As large biotechnology companies begin to
report second-quarter earnings next week, Wall Street is expecting
strong results as price increases continue and prescription trends
are stable. Investors will be listening for updates on full-year
earnings outlooks, along with research-and-development updates.
Weakness in the dollar during the quarter should help to boost
overseas sales for companies in the sector.
COMPANIES TO WATCH:
Biogen Idec Inc. (BIIB) - reports July 26
Wall Street Expectations: Analysts expect earnings of $1.37 a
share on revenue of $1.18 billion, according to Thomson Reuters. A
year ago, earnings were $1.12 a share, or $1.31 a share excluding
items, on revenue of $1.2 billion.
Key Issues: Biogen investors will be attentive for updates on
flagship multiple-sclerosis drugs Avonex and Tysabri, sold with
Elan Corp. (ELN). Also, expectations are high for the second set of
late-stage data on Biogen's oral MS drug, BG-12, which is expected
before year-end, along with important mid-stage data on another MS
treatment, daclizumab. Observers may also look for
marketing-strategy comments on MS pill Fampyra, which should get
European conditional approval soon. The drug, developed by Acorda
Therapeutics Inc. (ACOR) and licensed to Biogen for sales outside
the U.S., is designed to improve walking by MS patients.
Gilead Sciences Inc. (GILD) - reports July 26
Wall Street Expectations: Analysts expect earnings of 99 cents a
share on revenue of $2.07 billion. A year ago, the company reported
earnings of 79 cents a share, or 85 cents a share excluding items,
on revenue of $1.93 billion a year ago.
Key Issues: Gilead, known for selling HIV drugs, is expected
update its 2011 product-sales guidance and see a first-quarter
benefit from increasing U.S. prices of several of its top-selling
products in April. A price freeze for AIDS Drug Assistance
Programs, or ADAPs, remains in effect. Investors will be looking to
see if reduced state spending on drugs, through ADAPs, has resolved
itself since the first quarter. The programs are federally and
state-funded to make treatments available to patients without
insurance or enough money.
Celgene Corp. (CELG) - reports July 28
Wall Street Expectations: Analysts are expecting earnings of 87
cents a share on revenue of $1.12 billion. A year ago, Celgene
reported earnings of 33 cents a share, or earnings of 69 cents
excluding items, on revenue of $852.7 million.
Key Issues: Celgene will likely provide an update to its
full-year financial projections along with details of its
blood-cancer portfolio. Wall Street will be listening for plans to
expand the approved uses of Revlimid and other pipeline
developments, along with any commentary on the potential risk of
secondary cancers in long-term Revlimid users. In its first-quarter
results, Celgene said it expected generic competition for Vidaza to
emerge in May. But that competition hasn't happened yet, something
that may boost second-quarter results, and investors will be
listening for updates.
Amgen Inc. (AMGN) - reports July 29
Wall Street Expectations: Analysts predict earnings of $1.28 a
share on revenue of $3.78 billion. A year ago, net income was $1.25
a share, or $1.38 excluding items, on revenue of $3.8 billion.
Key Issues: Amgen is expected to declare its first-ever dividend
when it reports second-quarter results, estimated to be about 20%
of adjusted net income, which should put the payout at a little
more than a $1 per share a year. For the results themselves, Wall
Street will be watching the continuing launch and development of
osteoporosis drug Prolia along with Xgeva, which is the same as
Prolia but used at a higher dose for cancer patients.
(The Thomson Reuters financial estimates and year-earlier
earnings may not be comparable due to one-time items and other
adjustments.)
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com
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