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By Deena Beasley
April 24 (Reuters) - Amgen Inc on Tuesday reported a higher first-quarter profit, as sales rose 3 percent - a trend it expects to accelerate as it launches new drugs like migraine treatment Aimovig, likely to get U.S. approval next month.
During a conference call with analysts and investors, Amgen executives said they welcome discussions about the value of the new drug for a group of patients who have been “underappreciated and undertreated for too long.”
Questions have been raised about Amgen’s strategy for Aimovig after the nation’s largest manager of prescription benefits, Express Scripts, told Reuters it is pressing Amgen and rival makers of new migraine-preventing drugs to reconsider the usual strategy of high list prices and hefty rebates.
The pharmacy benefit manager plans to seek a refund if the drugs, also being developed by Eli Lilly and Teva Pharmaceutical Industries, do not work within a defined time frame.
Shares of Amgen, which fell nearly 2 percent in earlier trading, were flat at $171.80 after hours.
Amgen executives emphasized that Aimovig will likely be the first in this new class for a group of patients suffering from headaches that can leave them effectively disabled.
“Coming to market first is important. It allows us to set the baseline price,” said Anthony Hooper, the company’s head of commercial operations. “We’ve listened to the affordability question in the marketplace... we are quite prepared to talk to payers about risk-based contracts with Aimovig,” meaning insurers could be compensated if the drug was not effective.
He added that Amgen “will continue to come forward with prices that are responsible.”
Analysts have estimated list prices for Aimovig at $8,000 to $10,000 a year.
Amgen, which will market Aimovig in partnership with Novartis, emphasized that its migraine drug may be more potent than competitors’ and could have advantages in terms of dosing and ease of administration.
Amgen posted first-quarter adjusted earnings of $3.47 per share, up from $3.15 a share a year earlier, helped by lower taxes and fewer outstanding shares. Analysts on average expected $3.23 per share, according to Thomson Reuters I/B/E/S.
The biotech company slightly raised the lower end of its full-year financial outlook and said its adjusted tax rate would be 13.5 percent to 14.5 percent, or half a point less than previously expected.
First-quarter revenue rose 2 percent to $5.55 billion, with sales up 3 percent to $5.34 billion.
Jefferies analyst Michael Yee said the results marked “a good quarter and a good start to the year” for Amgen.
Amgen’s sales of anti-inflammatory drug Enbrel, faced with more competition in the rheumatology and dermatology sectors, fell 6 percent to $1.05 billion, below Wall Street estimates of $1.09 billion.
Sales of cholesterol drug Repatha more than doubled to $123 million, but the product “still has a long way to go to restore confidence that it has multi-billion-dollar sales potential,” JP Morgan analyst Cory Kasimov said in a research report.
For the full year, Amgen said it now expected adjusted EPS of $12.80 to $13.70, compared with $12.60 to $13.70 previously. It raised the lower end of 2018 revenue guidance to $21.9 billion from $21.8 billion and left the upper end unchanged at $22.8 billion. (Reporting by Deena Beasley in Los Angeles; editing by Peter Cooney, Tom Brown and Cynthia Osterman)