Amgen says it will test Otezla for COVID-19 as it posts an upbeat Q1 earnings report

Amgen Inc. (NASDAQ: AMGN) reported stronger than expected financial results on Thursday that initially pushed share prices up roughly 2% in after-hours trading but the stock settled around 0.5% lower than the price at which it closed the regular session.

Amgen also announced on Thursday that it plans on testing Otezla (psoriasis drug) as a potential treatment for the novel respiratory disease that Coronavirus causes. Amgen acquired Otezla from Celgene last year. The drug helps minimize overactive inflammation.

The American multinational biopharmaceutical company reaffirmed its earnings guidance for 2020. Amgen is also collaborating with Adaptive Biotechnologies to recognize antibodies that can counter the flu-like virus in a human body. Upon identification, such antibodies can later be used to develop an effective vaccine for COVID-19.

Amgen reports an 11% increase in quarterly revenue

Amgen reported an 11% increase in its quarterly revenue attributed to higher Otezla sales and greater demand for other drugs like Repatha (cholesterol treatment) in the first quarter. In a bid to slash out-of-pocket expenditures for Medicare patients, the biopharmaceutical company introduced a lower-priced Repatha in 2019.

Amgen also identified a number of other newer drugs that posted a double-digit percentage increase in sales in Q1.

According to Refinitiv, experts had forecast Amgen to print £4.79 billion in revenue in the first quarter. Their estimate for profit per share was capped at £3.0 per share. In its report on Thursday, the biotechnology company boasted a higher revenue of £4.92 billion in Q1 and made £3.33 of adjusted profit per share, that translates to a 17% increase on an annualized basis.

Amgen, however, cited higher operating costs for a 3% decline in its net profit to £2.45 per share in the first quarter.

Amgen’s financial guidance for 2020

In 2020, the California-based drug manufacturer said that it estimates £19.97 billion to £20.45 billion in revenue and £11.86 to £12.46 of adjusted earnings per share.

At £190 per share, Amgen is currently less than 1% down year to date in the stock market. The company, however, struggled in the second week of March when share prices dropped to as low as £145.57 per share. Its performance in 2019, on the contrary, was reported largely upbeat with an annual gain of more than 25%.

At the time of writing, the Thousand Oaks-headquartered pharmaceutical company has a market cap of £112.31 billion and a price to earnings ratio of 18.58.