A much more bullish tone to this report than any we have seen for a long, long time:
Biotech earnings provide ray of hope for investors 23 Oct 2002, 6:54pm ET
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NEW YORK, Oct 23 (Reuters) - Several biotechnology companies on Wednesday reported earnings that were as good or better than analysts had expected, providing a ray of hope in a sector that has been battered by a major scandal and a string of drug failures.
Amgen Inc. , the world's largest biotechnology company, reported robust sales of its main drugs; Chiron Corp.'s profit jumped on increased sales of its blood tests and vaccines; and Affymetrix swung to a profit from a loss on higher sales of its gene research chips.
"We are seeing signs of a recovery in the biotech sector, with very solid results across the board from the big cap biotechs," said Jennifer Chao, an analyst at RBC Capital Markets. "What people will be encouraged by is that Amgen, the sector's bellwether, is demonstrating strong fundamental growth."
Investors have fled the biotech sector over the past year, partly in reaction to the implosion of ImClone Systems Inc. , whose cancer drug was kicked back by U.S. regulators and whose former chief executive recently pleaded guilty to charges of insider trading.
There has also been a growing awareness that it may take longer than some had expected before discoveries made in mapping the human genome manifest themselves in the discovery of new drugs.
Amgen posted a net loss of $2.6 billion because of a $3 billion charge associated with its acquisition of Immunex Corp. But excluding the charge, profit rose 32 percent to $437 million, or 34 cents a share, 2 cents higher than analysts had expected.
Sales of anemia treatments Epogen and Aranesp rose 29 percent to $672 million, while sales of Neupogen and Neulasta, used to fight infection in cancer patients, rose 32 percent to $474 million.
Shares of Amgen rose to $51.49 in after-hours trade, after closing at $50 in regular Nasdaq trade.
Chiron Inc. saw its net profit rise 68 percent on increased sales of its blood tests, inhaled antibiotic and cancer drug. But it also said it would drop development of several drugs, a reminder, should anyone need it, of the uncertain, tortuous nature of the drug development process.
The company said it will cease development an AIDS drug as well as drugs for cystic fibrosis and hepatitis B. Chiron said it was not financially feasible to continue large-scale clinical trials for the AIDS drug and it was dropping the others to help streamline its portfolio.
Affymetrix, which makes tools for drug researchers, swung to a profit from a loss amid surprisingly strong demand for its chips for DNA analysis.
Affymetrix, which is based in Santa Clara, California, posted a net profit of $619,000, or 1 cent a share, from a loss of $4.8 million, or 8 cents, a year earlier.
© Reuters 2002. All rights reserved.
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