Amgen Q4 - Focus On Rheumatoid Arthritis

Amgen is a biopharmaceutical giant that was established in California in 1980, and has been a Vestact-recommended stock since 2015. It has a wide variety of drugs in production and a tremendous team of researchers working on new medicines.

Their current bestsellers are Enbrel, a tumour necrosis factor blocker used in the treatment of rheumatoid arthritis, Prolia, a human monoclonal antibody for osteoporosis, Otezla, a medication for psoriasis, Xgeva, a drug to prevent complications of bone cancer, and Aranesp, a red blood cell stimulant.

As older drugs go off patent, new ones are ramping up sales. Profits from lung cancer drug Lumakras are skyrocketing, as are those of cholesterol treatment Repatha, osteoporosis medicine Evenity, and platelet production regulator Nplate.

Robert Bradway, the CEO since 2012, is a keen acquirer of smaller companies. Amgen has completed five major corporate buyouts under his watch, the latest being ChemoCentryx for $3.7 billion. They created Tavneos, a drug treatment for autoantibody-associated vasculitis. They also bought Horizon Therapeutics for $27.8 billion to add Tepezza, a medication used to treat adults with thyroid eye disease to the portfolio, amongst others.

In exciting news out this week, Amgen is finally launching a biosimilar called Amjevita to compete with Humira, the world's top-selling drug, also for rheumatoid arthritis, which is owned by competitor AbbVie.

The longer term drug pipeline looks promising. Amgen has two molecules in testing to treat obesity, and one for the treatment of asthma.

The results released on Tuesday night were satisfactory, with sales and profits marginally ahead of expectations despite price declines and forex headwinds. Guidance for the year ahead was in line with the numbers analysts had pencilled in. Amgen shares softened by 2.4% yesterday which is acceptable, given that the price is not too far from all-time highs and has increased steadily over the last five years.

Amgen is a conservative company with a history of delivering excellent earnings growth, loads of new products, good deal flow, and a high dividend yield (around 3.5%). A great one to own!