An Aging Population And Biosimilars Will Reshape Global Healthcare

Key Takeaways

• Expanding product portfolio and global market presence, especially in emerging regions and chronic disease therapies, supports sustained long-term growth and revenue diversification.
  
• Rapid pipeline progress, strategic acquisitions, and operational efficiencies are set to boost future earnings, with innovation focusing on high-unmet-need disease areas.
  
• Expiring patents, pricing pressures, pipeline risks, and reliance on key products threaten Amgen’s revenue stability and profitability amid intensifying competition and regulatory scrutiny.

Catalysts

Amgen Inc. discovers, develops, manufactures, and delivers human therapeutics worldwide.

• Amgen is positioned to benefit from a surging global need for chronic disease therapies driven by the aging population, with expanding market opportunities for core products like Repatha (cardiovascular disorders) and EVENITY (bone health). This trend underpins robust long-term revenue growth as these conditions predominantly affect older adults.
  
• Structural improvements in global healthcare access—especially in emerging markets—are expanding the pool of eligible patients for innovative medicines and biosimilars, as evidenced by strong growth and new international launches for TEPEZZA and a broad biosimilar portfolio. This dynamic is likely to drive sustained double-digit revenue increases from both branded and biosimilar products.
  
• Amgen’s pipeline of next-generation therapeutics, particularly in obesity (MariTide), inflammation (TEZSPIRE), and oncology (IMDELLTRA, BLINCYTO), is advancing rapidly through late-stage trials. The company is targeting high-prevalence, high-unmet-need indications, and positive recent Phase 3 data coupled with expected approvals could substantially increase future top-line revenues and earnings as these launches scale.
  
• Strategic acquisitions, such as the integration of Horizon Therapeutics, are delivering new growth platforms in rare and specialty diseases, with early lifecycle drugs like UPLIZNA and TEPEZZA expected to yield strong, accretive growth in earnings and diversification of revenue streams as they gain broader adoption and new indications.
  
• Amgen’s investment in AI-driven R&D productivity and manufacturing scalability, coupled with accelerated regulatory pathways and robust global commercial infrastructure, is expected to deliver process efficiencies, faster product launches, and margin expansion. This operational leverage should translate into improved net margins and stronger long-term earnings growth.

Amgen Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Amgen compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Amgen's revenue will grow by 6.9% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 17.4% today to 30.4% in 3 years time.
• The bullish analysts expect earnings to reach $12.6 billion (and earnings per share of $23.23) by about May 2028, up from $5.9 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 20.8x on those 2028 earnings, down from 24.5x today. This future PE is greater than the current PE for the US Biotechs industry at 18.3x.
• Analysts expect the number of shares outstanding to grow by 0.24% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.73%, as per the Simply Wall St company report.

Amgen Future Earnings Per Share Growth

Risks

• Expiring patents on key blockbuster drugs such as Enbrel, Prolia, and Xgeva will expose Amgen to significant biosimilar competition, likely accelerating revenue erosion and pressuring top-line revenue growth.
  
• Growing global payer and government pushback on drug pricing, combined with the adoption of biosimilars for cost containment, will constrain Amgen’s pricing power across its core biologics, damaging long-term revenue and gross profit margins.
  
• Pipeline risks are elevated by the increasing complexity, higher costs, and regulatory scrutiny in late-stage drug development, which could result in costly failures, reducing net margins and limiting future earnings growth.
  
• Amgen continues to rely heavily on a concentrated set of products for the majority of its revenues, making the company vulnerable to volatility in sales if new launches and pipeline assets fail to compensate for declines in established franchises, thereby impacting overall earnings stability.
  
• Accelerating medical innovation and shifting therapeutic paradigms create a risk of technological obsolescence for existing Amgen therapies, necessitating continuous high R&D investment that, if unsuccessful, could compress long-term net margins and reduce available cash for dividends and share repurchases.

Valuation

• The assumed bullish price target for Amgen is $400.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Amgen's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $400.0, and the most bearish reporting a price target of just $185.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $41.6 billion, earnings will come to $12.6 billion, and it would be trading on a PE ratio of 20.8x, assuming you use a discount rate of 6.7%.
  
• Given the current share price of $270.44, the bullish analyst price target of $400.0 is 32.4% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.