Sequencing giant Illumina reported another record-high earnings quarter during the final three months of 2014, while Roche saw full-year sales gains on drugs offset by an impairment and a partial debt restructuring, and Amgen benefited from a combination of rising drug sales, cost-cutting, and a tax benefit.
Illumina saw its fourth quarter profit nearly double (up 90% from Q4 2013), reporting net income of $153.280 million, compared with $80.661 million in Q4 2013. The company’s total revenues zoomed 32% to $512.379 million. For all of 2014, Illumina nearly tripled its net income (up 182% from 2013) at $353.351 million, on revenue that jumped 31% to $1.861 billion.
“We delivered record fourth quarter and fiscal year 2014 financial results which greatly exceeded our expectations,” Illumina CEO Jay Flatley said in a statement.
Sequencing instrument revenue grew 93% compared to the fourth quarter of 2013, Flatley said during a conference call with analysts, driven by demand for the NextSeq 500 and the HiSeq X instruments launched earlier in 2014. During the fourth quarter, he said, it added three new HiSeq X Ten customers and booked a total of 37 systems. Q4 saw noticeably fewer X shipments than earlier in 2014 “due to the timing of customer readiness,” Flatley added.
A total 18 customers have ordered 201 systems, of which 134 shipped in 2014, Flatley said.
Illumina also expects strong results for its newest additions to its sequencing portfolio, including the HiSeq X Five, as well as the HiSeq 3000 and 4000 Systems, which based on the same patterned flow cell technology as HiSeq X.
Hi Seq X Five—designed to enable fast yet affordable human whole-genome sequencing on a massive scale, according to the company—will start to be shipped in the second quarter of 2015, Flatley said.
“The introduction of this configuration was not prompted by a lack of demand for the HiSeq X Ten. Instead, it's clear that providing a lower entry price to the X technology will grow the overall market more quickly and accelerate the evolution to sequencing full genomes,” Flatley said during the conference call.
He added that X Five, as well as HiSeq 3000/4000 and another recently announced instrument , NextSeq 550 “will position us for continued long-term growth as we develop and address the large and nascent market opportunities ahead of us.” NextSeq 550 combines microarray scanning with the NextSeq 500 sequencing system.
Roche reported a 16% year-over-year drop in full-year earnings, to CHF 9.535 billion ($10.540 billion) on sales that rose 1% to CHF 47.462 billion ($52.466 billion).
The company blamed an intangible impairment of CHF 1.1 billion ($1.216 billion) after the “reassessment” of an unspecified “product in late-stage development” in its Tissue Diagnostics business, as well as reductions in reimbursement for U.S. lab tests. Roche also blamed its 2014 earnings results on its decision to restructure part of its debt in 2014 to take advantage of lower interest rates. Net of tax, Roche said, the debt restructuring “resulted in a one-time loss of 279 million Swiss francs, but will lead to interest savings over the longer term.”
Roche saw its pharmaceutical sales rise 1%, to CHF 36.696 billion ($43.866), in part due to strong gains by new products, Perjeta and Kadcyla for HER2-positive breast cancer (+20%), as well as Avastin (+6%) more than offsetting declining sales of Xeloda due to generic competition. The company also cited strong demand for immunology medicines, such as Actemra/RoActemra (+23%) for rheumatoid arthritis and Xolair (+25%) for chronic hives and allergic asthma.
Sales of Tamiflu (+54%) jumped late in 2014 to CHF 959 million ($ 1.059 billion), due to growing demand in the U.S. following the flu outbreak, Roche added.
Roche’s diagnostics division racked up a 3% revenue gain, to CHF 10,766 billion ($11.897 billion), in part because of sales of two new molecular laboratory testing systems launched during the year, the cobas 6800 and the cobas 8800.
Amgen reported fourth-quarter earnings of $1.67 billion, up 19% from Q4 2013. Total revenues were $5.331 billion, up 6% from Q4 2013 and ahead of analyst forecasts of $5.2 billion.
The company cited an 8% increase in product sales, to $5.174 billion, mostly due to higher prices and/or rising demand. Enbrel® (etanercept) sales increased 11% year-over-year for the fourth quarter, to $1.337 billion, and 3% for the full year, to $4.688 billion. The highest Q4 sales gain was recorded by Prolia® (denosumab), which rose 33% to $315 million based on demand.
Amgen’s best-selling drug franchise remained Neulasta® (pegfilgrastim) / Neupogen®(filgrastim). But while Neulasta rose 7% in Q4, to $1.180 billion mainly due to price, older Neupogen slid 11% to $274 million, with the company citing generic competition in the U.S. and unfavorable changes in inventory levels and foreign exchange rates, offset partially by acquisition of commercial rights in new markets.
Amgen also cited a $109 million fourth-quarter gain from extension of the federal R&D tax credit and other business tax provisions, and more than $300 million in cost savings from its restructuring, announced in July and expanded in October. But those savings were offset “substantially,” Amgen said, by consolidating on a full-year basis the expenses of Onyx Pharmaceuticals, acquired in 2013; and by increased investments in later-stage clinical programs, new product launch preparation, and external business development, including the company’s collaboration with Kite Pharma to develop chimeric antigen receptor (CAR) T-cell immunotherapies.
For all of 2014, the company reported adjusted net income of an even $6.7 billion, up 20% from 2013, on revenues that increased 7%, to $20.063 billion, with product sales growth rising 6%, to $19.327 billion. Amgen also reaffirmed investor guidance it offered in October that it would generate 2015 revenue of between $20.8 billion and $21.3 billion, as well as adjusted earnings per share this year of $9.05 to $9.40.
“2014 was an outstanding year for Amgen,” Robert A. Bradway, Amgen’s chairman and CEO, said in a statement. “Following tremendous progress in our pipeline, we look forward to embarking on a new product cycle with the launch of important new medicines throughout 2015.”