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Amgen FY numbers - strong line up

Amgen's fourth-quarter results came out late last week. The stock price has done pretty well in the last three months, almost getting to $200 per share. It's at $187 per share now, giving the company a market capitalisation of $135.8 billion.

In case you have forgotten, Amgen is a company that has a wide portfolio of blockbuster drugs. Its one of the earliest biotechnology companies, founded in 1980 in Thousand Oaks, California.

As Byron pointed out in our last review, the company has a portfolio of more than 13 mainstream products with annual sales ranging from $150m to $6bn. The biggest are Neulasta/Neupogen which is used to prevent infections in patients undergoing cancer chemotherapy, and Enbrel which is for the treatment of rheumatoid arthritis.

This set of numbers were just fine. Their guidance for 2018 was a little softer than expectations. Also, some of the company's drugs face competition from generics and biosimilars.

Analysts at Goldman Sachs seemed encouraged by the company's aggressive capital allocation plans, including a new $10 billion share repurchase programme. Comments from management suggest that Amgen is also open to a range of merger and acquisition possibilities.

There are a number of exciting new products in Amgen's pipeline. Next generation cholesterol treatment Repatha is gaining traction. Migraine drug Aimovig has great potential. A new drug for hyperparathyroidism in patients undergoing dialysis called Parsabiv got a positive mention.

I like investing in the healthcare sector. Helping the human race to overcome disease, prevent suffering and avoid early deaths is a good cause. Allocating capital to such companies strengthens that effort.

I read recently that at the beginning of the 20th century, out of every 1,000 infants born 100 were dead by their first birthday. That number has dropped to below seven because diseases like Diphtheria, Tuberculosis, Typhoid, Cholera, Malaria, Yellow fever and Smallpox have all but been eradicated.

Scientists who work for companies like Amgen have decades of experience and knowledge, and are building on centuries of scientific progress. We're lucky to live when we do. Buy and hold this one. If you own them already, accumulate some more!


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