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On Thursday night Amgen released results that beat both revenue and profit forecasts. What didn't impress the market was their lower than expected guidance around future profits. The stock close down 4.5% on Friday, around half of that drop, can be attributed to the general market sell-off though.
The past year was described by management as a transition period for Amgen. It is a period where some of their big blockbuster drugs are now off patent and have declining sales. To combat those declining sales, Amgen has been working hard to grow their bio-similar division to compete with other companies' drugs which have come off patent. Looking at what lies ahead, management is excited about the potential that Asia holds for growth. The estimation from Amgen is that 25% of their growth over the next decade will come from the Asia-Pacific region.
Where to next? The transition in the company will continue. Amgen will buy bolt-on companies to complement their current offering, and they also have a drug pipeline that has the potential to have some future big blockbuster drugs. Going through a transition means that growth will be muted, but while that happens you can enjoy a 3% dividend yield.
