Immunex profits up 26% as sales rise

Profits for Immunex Corp. climbed 26 percent last quarter to $39.7 million, as Seattle's biggest biotech company reported results that were in line with analysts' expectations.

The company said yesterday that it sold $198.1 million of its star rheumatoid arthritis drug, Enbrel, during the quarter, up 15 percent compared with last year. Overall revenues grew by almost 16 percent to $253 million from $219 million a year ago.

"We delivered on our financials and our numbers, and that's important for our credibility," said Chief Operating Officer Peggy Phillips. "It shows the strength of the business."

In addition to reporting an increase in Enbrel sales, Immunex said it sold more of its other drugs, Novantrone and Leukine.

Although Immunex reported strong sales, some Wall Street analysts said yesterday that what really matters is whether the company is able to hit several goals that it has laid out that will help it boost production of Enbrel.

The company has been unable to make enough of the drug to keep up with demand and has seen its stock price sag accordingly.

During a conference call with investors yesterday, Immunex executives said they're on track to sell $750 million worth of Enbrel this year, including sales of between $205 million and $215 million during the fourth quarter.

By next year, Phillips said, Enbrel sales should grow to between $900 million to $1.3 billion after the company implements a series of changes to increase production.

The biggest push will come from a new facility in Rhode Island that the company hopes to open during the second half next year. It will double the amount of Enbrel that the company can produce.

Phillips also said Immunex has submitted an application to the Food and Drug Administration to make changes to its Enbrel production process that would increase the yield by from 10 percent to 30 percent.

If approved, Phillips said, the company will begin using the new process during the first quarter of next year.

"I think everyone is kind of in a waiting and watching mode," said Elise Wangat Salomon Smith Barney. "We need to see that they hit their milestones in terms of getting the manufacturing plant up and running and the production improvements. That's really critical for them."

While many other corporations across the country have seen business slow down as a result of the Sept. 11 terrorist attacks, Immunex's sales were not effected, Phillips said.

"People need to take the drugs that we have," she said. "With Enbrel, we held back some of our shipments that week until we were certain that we had the continuity of delivery that we needed, but I can't say that affected our sales. We simply filled those orders the next week."

In other earnings reports from local companies:

Ostex International Inc. said it lost $737,000 during the third quarter, up from a loss of $203,000 last year. The Seattle maker of osteoporosis products also reported that its revenues fell from $1.6 million a year ago to $1.3 million during the third quarter of this year.

In a statement released yesterday, Ostex said its 2000 profits were boosted by a payment that the company received after a patent dispute was settled in its favor. In addition, the company said its operating losses during the third quarter were driven up by the cost of validating a new manufacturing facility. Ostex expects to complete the validation of that facility this year.

Labor Ready Inc. said third-quarter net income of $7.9 million, or 19 cents a share, was down slightly from the $8.1 million or 19 cents a share reported a year ago. The Tacoma-based operator of hiring halls for temporary labor said revenues fell 8 percent to $260 million.

Labor Ready said it expects to close 50 offices in the fourth quarter, and has trimmed its expansion plans for 2002 from 30 offices to 10, most in the United Kingdom.

This report includes information from P-I reporter Bill Virgin. P-I reporter Marni Leff can be reached at 206-448-8142 or marnileff@seattlepi.com.

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