Earnings Preview: Amgen to report 4Q Wednesday

FILE - This Nov. 11, 2008, file photo, shows gluten-free frozen pizza, just one of hundreds of items at Gluten Free Trading Co. in Milwaukee. Schools, restaurants and anyone else serving food are more vulnerable to legal threats over food sensitivities after the Justice Department determined that severe food allergies can be classified as disabilities under federal law. People who suffer from celiac disease don't absorb nutrients well and can get sick from the gluten found in wheat, rye and barley. Celiac is a diagnosed illness that is more severe than gluten sensitivity, which some people self-diagnose. Millions of people are buying gluten free foods because they say they make them feel better, even if they don’t have a wheat allergy. (AP Photo/M.L. Johnson, File)
FILE - In this April 21, 2010 file aerial photo, the Deepwater Horizon oil rig burns in the Gulf of Mexico. The Justice Department has reached a $1.4 billion settlement with Transocean Ltd., the owner of the drilling rig that sank after an explosion killed 11 workers and spawned the massive 2010 oil spill in the gulf. On Thursday, Jan. 3, 2013, two people with knowledge of the negotiations say Switzerland-based Transocean would pay the money to resolve the department's civil and criminal probe of the company's role in the Deepwater Horizon disaster. (AP Photo/Gerald Herbert, File)
FILE - This Dec. 5, 2012 file photo shows President Barack Obama speaking at the Interior Department in Washington. The president says he won't go after Washington state and Colorado for legalizing marijuana. In a Barbara Walters interview airing Friday on ABC, Obama is asked whether he supports making pot legal. He says, "I wouldn't go that far." (AP Photo/Carolyn Kaster, File)
FILE - This Nov. 8, 2012 file photo shows marijuana plants flourishing under the lights at a grow house in Denver. President Barack Obama says he won't go after Washington state and Colorado for legalizing marijuana. In a Barbara Walters interview airing Friday on ABC, Obama is asked whether he supports making pot legal. He says, "I wouldn't go that far." (AP Photo/Ed Andrieski, File)
In this Wednesday, Oct. 19, 2011 file photo,, State Assemblyman Tom Ammiano, left, gestures as State Senator Mark Leno, right, looks on during a news conference calling for the end of Federal attacks on medical marijuana dispensaries in San Francisco. Ammiano has said he was “frustrated” by Obama's recent comments, saying the federal government needs to stop shuttering dispensaries in states with medical marijuana laws, including California. “A good step here would be to stop raiding those legal dispensaries who are doing what they are allowed to do by law". (AP Photo/Eric Risberg, File)

FILE - This Nov. 11, 2008, file photo, shows gluten-free frozen pizza, just one of hundreds of items at Gluten Free Trading Co. in Milwaukee. Schools, restaurants and anyone else serving food are more vulnerable to legal threats over food sensitivities after the Justice Department determined that severe food allergies can be classified as disabilities under federal law. People who suffer from celiac disease don't absorb nutrients well and can get sick from the gluten found in wheat, rye and barley. Celiac is a diagnosed illness that is more severe than gluten sensitivity, which some people self-diagnose. Millions of people are buying gluten free foods because they say they make them feel better, even if they don’t have a wheat allergy. (AP Photo/M.L. Johnson, File)

FILE - This Nov. 11, 2008, file photo, shows gluten-free frozen pizza, just one of hundreds of items at Gluten Free Trading Co. in Milwaukee. Schools, restaurants and anyone else serving food are more vulnerable to legal threats over food sensitivities after the Justice Department determined that severe food allergies can be classified as disabilities under federal law. People who suffer from celiac disease don't absorb nutrients well and can get sick from the gluten found in wheat, rye and barley. Celiac is a diagnosed illness that is more severe than gluten sensitivity, which some people self-diagnose. Millions of people are buying gluten free foods because they say they make them feel better, even if they don’t have a wheat allergy. (AP Photo/M.L. Johnson, File)
FILE - In this April 21, 2010 file aerial photo, the Deepwater Horizon oil rig burns in the Gulf of Mexico. The Justice Department has reached a $1.4 billion settlement with Transocean Ltd., the owner of the drilling rig that sank after an explosion killed 11 workers and spawned the massive 2010 oil spill in the gulf. On Thursday, Jan. 3, 2013, two people with knowledge of the negotiations say Switzerland-based Transocean would pay the money to resolve the department's civil and criminal probe of the company's role in the Deepwater Horizon disaster. (AP Photo/Gerald Herbert, File)
FILE - This Dec. 5, 2012 file photo shows President Barack Obama speaking at the Interior Department in Washington. The president says he won't go after Washington state and Colorado for legalizing marijuana. In a Barbara Walters interview airing Friday on ABC, Obama is asked whether he supports making pot legal. He says, "I wouldn't go that far." (AP Photo/Carolyn Kaster, File)
FILE - This Nov. 8, 2012 file photo shows marijuana plants flourishing under the lights at a grow house in Denver. President Barack Obama says he won't go after Washington state and Colorado for legalizing marijuana. In a Barbara Walters interview airing Friday on ABC, Obama is asked whether he supports making pot legal. He says, "I wouldn't go that far." (AP Photo/Ed Andrieski, File)
In this Wednesday, Oct. 19, 2011 file photo,, State Assemblyman Tom Ammiano, left, gestures as State Senator Mark Leno, right, looks on during a news conference calling for the end of Federal attacks on medical marijuana dispensaries in San Francisco. Ammiano has said he was “frustrated” by Obama's recent comments, saying the federal government needs to stop shuttering dispensaries in states with medical marijuana laws, including California. “A good step here would be to stop raiding those legal dispensaries who are doing what they are allowed to do by law". (AP Photo/Eric Risberg, File)

TRENTON, N.J. () — Biotech drugmaker Inc. should focus on a strategic acquisition and testing of six potential new drugs when it reports fourth-quarter results after the stock market closes Wednesday.

WHAT TO WATCH FOR: The world's biggest biotech company has three cancer drugs and two other experimental drugs in late-stage patient testing, plus a sixth drug for reducing bad cholesterol that's just completed mid-stage testing. Executives of the Thousand Oaks, Calif., company will discuss their plans to start late-stage patient studies on that drug, known as AMG 145, early this year. That's after four mid-stage studies, reported at a November medical conference, showed it significantly reduced LDL, or bad cholesterol.

The company expects sometime this year to have new research data from late-stage patient studies of trebananib for treating ovarian cancer and talimogene laherparepvec, TVEC for short, for the deadly skin cancer melanoma. The other three drugs now in late-stage testing are rilotumumab for gastric cancer, romosozumab for postmenopausal osteoporosis and brodulumab for psoriasis. All three use antibodies cloned repeatedly in living cells — monoclonal antibodies — to deliver an attached medicine to the disease site.

Last month, Amgen agreed to pay $762 million to resolve federal criminal and civil liability over its marketing of certain drugs, including promoting anemia drug Aranesp and other medicines for unapproved uses.

According to the Justice Department, it's the largest criminal and civil whistleblower case settlement involving a biotech company in U.S. history. Amgen also signed a corporate integrity agreement allowing the federal government to closely scrutinize its marketing practices.

Amgen CEO Robert A. Bradway likely will discuss the mid-December purchase of Iceland's deCODE Genetics for $415 million. It's a leader in human genetics research and analytics. DeCODE has a huge database of genetic and medical information on Iceland's population that could help researchers better understand whether new drugs will work in individual patients with particular genetic characteristics.

Bradway and other executives will discuss sales trends for Amgen's drugs, including Neulasta and Neupogen for fighting infection in cancer patients.

Management will note that two newer drugs, which have the same active ingredient at different doses, have reached a combined sales rate of $1 billion per year after barely two years on the market. Those are Prolia for osteoporosis and Xgeva for preventing fractures in cancerous bones.

Executives also should forecast Amgen's revenue and profit for 2013.

And they'll discuss plans to build their first Asian manufacturing plant, in Singapore, and continuing efforts to reward stockholders with another $2 billion worth of share buybacks and a 31 percent increase in Amgen's quarterly dividend, to 47 cents a share.

WHY IT MATTERS: Sales of what had been Amgen's top sellers, anemia treatments Aranesp and Epogen, have been falling amid safety concerns and federal health program limits on dosing and reimbursement levels.

Meanwhile, in mid-January the company announced that a late-stage study meant to get approval for an additional use of Aranesp didn't work out. It showed that in patients with heart failure and anemia, Aranesp did not delay the time until patients were admitted to a hospital or died.

Those issues make it crucial that drugs in late-stage patient testing get approved.

Meanwhile, UBS Securities analyst Matthew Roden wrote in a report that he expects sales to come in lower than Wall Street estimates for several key products, including Neulasta, Epogen and immune disorder treatment Enbrel.

He added that Amgen's fourth-quarter and 2012 results could miss Wall Street's consensus forecast because some analysts have not updated their figures since Bradway's Jan. 8 comment that earnings per share will be reduced by a dime because an annual federal research and development tax credit wasn't renewed in 2012. It was delayed until early 2013 amid the fiscal cliff debate in Washington.

WHAT'S EXPECTED: Analysts polled by FactSet, on average, expect earnings per share of $1.44, excluding one-time items, and sales of $4.37 billion.

LAST YEAR'S QUARTER: Amgen reported profit of $934 million, or $1.08 per share. Revenue was $3.97 billion.

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Linda A. Johnson can be followed at http://twitter.com/LindaJ_onPharma