Sign up for our free daily newsletter
Get the latest news and some fun stuff
in your inbox every day
What's going on at Amgen? This biotech company is also widely held in our client base, and its share price has underperformed a bit lately. The stock price reached $210 late last year, but has since drifted lower to around $180 per share.
In previous reports we have described how Amgen is a multi-drug powerhouse, with 7 blockbuster drugs (over $1 billion in annual sales), another 5 which sell more than $500 million per year, and 7 which sell more than $100 million per year. It's in a transition phase now, as some top sellers are approaching the end of their period of patent protection, and other newer drugs are slowly ramping up.
Amgen reported its second quarter numbers on Tuesday night, with revenue of $5.87 billion, which was ahead of consensus. The revenue beat was mostly thanks to higher than expected sales of rheumatoid arthritis drug Enbrel, which sadly faces competition from biosimilars. Osteoporosis treatments Prolia and Xgeva are selling well. Multiple myeloma (cancer) drug Kyprolis is also taking off. Migraine treatment Aimovig is growing sales steadily.
In the negative column, sales of post-chemo drugs Neulasta and Aranesp slowed further, as did growth hormone drugs Epogen and Neupogen. Uptake of new cholesterol drug Repatha was a little disappointing, due to a price reduction.
Amgen spends a lot of money on pharma research and development. The new drug pipeline is exciting, with significant progress on possible cancer drugs. The most promising is the KRAS inhibitor codenamed AMG-510. KRAS proteins are the body's on/off switch in cell signalling. People with Lung cancer have tumours because of mutated KRAS proteins, and AMG-510 attacks them (this is a gross simplification, but you get the idea).
The data on AMG-510 lung cancer efficacy was first presented at the annual American Society of Clinical Oncology (ASCO) meeting in June. On Tuesday Amgen revealed that AMG 510 also works on colorectal cancer and cancer of the appendix. As you can imagine, effective cancer treatments are a potential multi-billion Dollar market.
In a weak market on Wednesday, Amgen stock rose by 5.7% on these reports. That's really encouraging. We remain very confident that Amgen is a stock to own and accumulate at current levels.