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Here’s the entire text of the Q&A from Amgen’s (ticker: AMGN) Q3 2005 conference call. The prepared remarks are in a separate article. We recognize that this transcript may contain inaccuracies - if you find any, please post a comment below and we’ll incorporate your corrections. And please note: this conference call transcript is a Seeking Alpha product, so feel free to link to it but reproduction is not permitted without the explicit permission of Seeking Alpha.

[Q - Greg Parker]: Hi George, could you provide a few more details on the use of Aranesp in dialysis, specifically the proportion of dialysis patients who are currently treated in the hospital and what you think that Aranesp penetration is at that segment right now?

[A - George Morrow]: Well Greg, I do not have the exact figures. It is much less than 20%, probably close to the 10% or may be we can get a more specific figure, and I would say we are well over two-thirds of the way there.

[Q - Greg Parker]: So, it is fully penetrating the market that makes you confident that…

[A - George Morrow]: Yeah, I do not know if we are fully penetrated, but you know I think by the middle of next year, anybody who is going to convert will convert.

[Q - Greg Parker]: Okay, thanks very much.

[Chris Raymond - Robert Baird & Company]

[Q - Chris Raymond]: Hi, thanks. A question for George. You know, I noticed quality care demonstration project is still sort of up in the air, but you may be handicap for us may be how likely it is that it will be in pretty much the same format or you thinking that there will be at least some change, and how important is that to you that it at least looks, you know, 90% similar to the way that the program looks now?

[A - George Morrow]: It is really difficult to handicap because we are not preview to any of the discussions ongoing between patient groups, oncology societies, and the CMS, but we are encouraged by things that _____ has said and things we are hearing, so I think there is a real commitment toward Mc Laughlin’s very quality care oriented and I think to the extent that the new demo project if there is one as a quality component, then I think it is going to be beneficial for the patients, for the physicians and for us.

[Q - Chris Raymond]: Given that they have sort of you have blown threw much of that budget likely if not by now certainly before the end of the year, do you think there will be any sensitivity to that?

[A - George Morrow]: There may be, but I think the first commitment is to making sure that cancer patients are being taken care of, I think that was the motivation to do it last year and I think that that motivation still exists today.

[Q - Chris Raymond]: Thank you.

[Jennifer Childs - Deutsche Bank].

[Q - Jennifer Childs]: Thanks for taking the question. Another one for you George. Epo and Aranesp do appear light in the quarter despite the share in penetration gains. Is there a trend towards greater discounting and where do you characterize inventory vis-a-vis the second quarter?

[A - George Morrow]: Okay, with regard to inventory, everything is in the normal range, but the normal range that we have is usually you know 4 days 5 days and you know so a product can go up and down and actually could substantially impact the growth rate, for example in our average billing days about 60 million in sales, you take just one day 60 million out of one quarter into the next is $120 million change, which is a 4% change in the growth rate, so that is why as we said on previous calls, we really do not pay a lot of attention to quarter-on-quarter. If we see a trend break, we will certainly call it out for you.

[Q - Jennifer Childs]: Okay, that is best helpful and in just in terms of growth in both renal and onc market, what are you forecasting in terms of year-over-year growth for the US and Europe in each of those market?

[A - George Morrow]: We don’t share forecasting in different settings, but I can tell you that in the US oncology market, we saw about 14% growth in demands in the third quarter and in nephrology we saw about 16% demand in the quarter in the US and a little bit lower in Europe as I mentioned on the call.

[Roger Perlmutter]: Jennifer, you mentioned you had thought Aranesp was a bit light. We do not see it that way. We see Aranesp as very very strong, and even in the Epogen, area we see situations where there isn’t this hospital dynamic that the growth is in line and has been for sometime with patient growth rate, so we are delighted with the performance of Aranesp both in terms of the market growth that George talked about a 14% and our continuing share gains. In fact, we feel very good about it.

[Jennifer Childs]: Okay, right thank you.

[Eric Smith – Cohen]

[Q- Eric Smith]: Good afternoon. I was wondering if Roger might be able to clarify whether for anatumomab this ongoing study 408, whether the trial which is yet to get final data from is required for the BLA under your SPA agreement with the agency.

[A - Roger Perlmutter]: Eric, the original agreement in SPA was for the studies that I mentioned, 250 and 167 studies with 408 support. When enrollment was slow on the 250 and 167 studies, we did go last year to the SPA and asked about the 408 study, which is a course of randomized study versus best supportive care and they agreed to that study, so in principle, we could go either direction. I have to say, you know, if you have a response rate without any change in progression-free survival, you would have to ask some questions about what you really wanted to say about the data. I think at that point it becomes important to look at what happens when you use the drug at an earlier time point and in first cycle while the chance to see that from the phase data, so you know there is a lot of data here, a lot of experience that shows that anatumomab is active in patients with colorectal cancer. It is really a question how you position it.

[Q- Eric Smith]: And it was my understanding that the phase trial was not registrationally directed, but you turned that also possibly supported, is that right?

[A - Roger Perlmutter]: No, the phase study is not, I would not view that as a study to support registration, although the data will be filed of course with the agency because of the experience.

[Eric Smith]: Ok, thank you.

[Mat Geller with CIBC]

[Q - Matthew Geller]: Thank you very much. I would like to ask Roger. Can you talk a little bit about whether you see the possibility at this point of any accelerated pathways for getting Kepivance approved, in particular, do you see as the pathway for metastatic bone disease and also do you see 2-year data as the possibility with the FDA?

[A - Roger Perlmutter]: Mat, the question of 2-year data comes up of course all the time in the postmenopausal osteoporosis setting. It has been the subjects of a lot of extra reviews, both in the US and also in the EU. We are still working with draft guidance that is a decade old from the FDA in this setting, and it is not exactly clear when that is going to be resolved. I think our sense is that more progress has been made in terms of CHMP and EMA than the SPA, so we do not know, but there is experience of course with more rapid registration based on overwhelming efficacy. So a lot depends on what happens in our interim analysis in 2007 and the question of what the effect is of Kepivance on fracture in that setting. Clearly in the oncology setting, the question really relates to sort of the overwhelming weight of the data again, particularly with respect to skeletal-related events, and I cannot really speculate because we haven’t even initiated the trials yet, do not know what the enrolments are going to look like and whether or not we could use that as a more rapid registration path.

[Matthew Geller]: Thanks a lot Roger.

[____ Hope with Goldman Sachs]

[Q - _____ Hope]: My question is for Richard. Now that you have Neupogen/Neulasta bulk manufacturing in Puerto Rico, what is the impacts for 2006 tax rate?

[A- Richard Nanula]: [____] we are going to talk a little bit about ’06 in January, so rather than predict the tax rate today, I would rather wait until then. I think we have said that the tax rate for this year, especially in the second quarter had some one time risk that will make this year lower than it ordinarily would have been, which we called out last quarter, so Neupogen/Neulasta will begin to have a positive effect on our tax rate in 2006. They will probably do not much more than offset the one time risk that was this year, so 2006 tax rate should be pretty similar to ’05, and we will update later when we get together in January.

[_____ Hope]: Thank you.

[Geoffrey Porges with Stanford Bernstein]

[Q - Geoffrey Porges]: Thanks for taking the question. Question regarding Epogen again. Your down 82 million I think year-over-year versus the same period last year. I am wondering if you could give us a sense of how much of that difference is attributable to cannibalization by Aranesp, but how much is attributable to the channel using up some inventory that goes up in Q2?

[A - Richard Nanula]: Hi, this is Richard. I think you should think about two-thirds in the difference is what George talked about a couple of days of inventory making a little swing and about one-third is the cannibalization from Aranesp.

[Q - Geoffrey Porges]: Thanks, that is very helpful.

[Joe – Capital Market]

[Q - Joe]: Thanks a lot, on Neulasta. I understand your cautions on sequential sales analysis, but it looks since the launch, sales have never decreased from the second quarter to the third quarter, and even the label expansion in third quarter is well. I am wondering if there is some other factor that caused the sequential down trend. Thanks.

[A - Richard Nanula]: I do not think there is anything that is causing us any pause in our confidence level in Neupogen/Neulasta. As George said, all you have to do is take a couple of days within the normal inventory range and a couple percent negative on a sequential basis becomes a couple of percent positive, and frankly I think when you look across all of our products, I think you can say that. Sequential sales were of really less than 1% for the whole company. If you were to put two more shipping days in quarter 2 than we had in quarter 3, you put a couple of more shipping days back in the company on a sequential basis as the couple of point ahead, so it is really year-over-year trends we think are important.

[Roger Perlmutter]: Let me give you some color on the overall sequential question. I think Richard and George have analytically nailed it in the couple of days’ difference. We would also point to historically this happens to the company. I went back and looked a few years. If you kind of go to the next altitude if you are well and you ask yourself are there anything in the market on the competitive environment, reimbursement environment, customer environment, we feel strong strong momentum in the business right now, whether it is market growth or market share gains compared as to last year when there was a couple of significant questions related to Medicare reimbursement, etc. It looks thus right now that we are operating at a really high levels of effectiveness and we are optimistic about the future. I understand the question that the important thing to get to handle around, but as you pass the answers, the third quarter performance in our judgment was very strong.

[Richard Nanula]: And let me get that one thing.. that pricing has stabilized in the US oncology market, so that ought to let us enjoy all the volume demand growth that is existing in those markets as well.

[Steve Hall with Morgan Stanley]

[Q - Steve Hall]: Sorry. Richard a just question on the tax rate again assuming you guys will repatriate dollars before the end of the year that you talked before about 800 million to a billion dollars being eligible in the first half and are you still planning to do that in the second half? If so, is that included in guidance of 310 and 320?

[A - Richard Nanula]: Steve, let us see. I think we stated 500 million not 800 to a billion. So, 500 million likely in the fourth quarter, I believe, we will end up treating the tax associated with that $500 million which I think is going to be 30 to 40 million outside of adjusted earnings inside a gap and so no it is not included in our 310 and 320.

[Steve Hall]: All right, thank you.

[Mark Augustine with CSSC]

[Q - Mark Augustine]: Thanks I was just hoping to get an enrollment update in the TREAT CKD study and then any updates on the Aranesp safety studies in combination of chemotherapy and radiotherapy. Thanks.

[A - Roger Perlmutter]: Mark, enrollment in TREAT is kind of steady at this point. We are behind where we would like to be in TREAT, but we have introduced a couple of protocol amendments and brought on some new sites and that seems to be having an effect, so we are still anticipating that we are going to go through and complete TREAT enrollment next year, again treat some 4000 patients starting 2000 patients per arm, and then with respect to the safety studies on Aranesp in cancer patients, we continue to conduct these studies quite a number of them. We have a data safety and monitoring report that reviews this, every 6 months they review it and so far the studies continue.

[Mark Augustine]: Thank you.

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