Acquisition and Innovative Pipeline Strategies Promise Long-Term Revenue and Margin Growth

What are the underlying business or industry changes driving this perspective?

• Amgen's acquisition of Horizon introduces a significant new rare disease business that, with its early lifecycle products, presents an opportunity for revenue growth through expanded global reach and leveraging Amgen's biologics manufacturing expertise.
• The diversified and deep pipeline across general medicine, oncology, inflammation, and rare diseases indicates potential for future revenue growth through innovative treatments in significant markets.
• The expected growth in volume across key products (Repatha, Prolia, EVENITY, Otezla, and BLINCYTO) could positively influence revenue through increased market penetration and expanded indications.
• The integration and development of technology platforms, including generative artificial intelligence, in research and development processes aim to increase the efficiency and effectiveness of drug development, potentially reducing costs and enhancing profitability.
• The commitment to investing in both internal and external innovation while maintaining expense discipline suggests a strategic approach to foster long-term growth in net margins through a balance of cost management and revenue generation from new therapies.

Figures in the charts may differ slightly from those mentioned in the narrative

How have these above catalysts been quantified?

• Analysts are assuming Amgen's revenue will grow by 7.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from 23.8% today to 24.4% in 3 years time.
• Analysts expect EPS to reach $16.4 ($8.5 billion in earnings) by about February 2027, up from $12.53 today.

Figures in the charts may differ slightly from those mentioned in the narrative

What could happen that would invalidate this narrative?

• The GIP antagonism approach of AMG 133, which is different from competitor strategies focusing on GIP agonism, could lead to uncertainties in efficacy and regulatory acceptance, potentially affecting revenue and market share.
• The unclear differentiation and positioning in the obesity treatment paradigm, especially regarding impacts on blood pressure and lipids compared to competitors, could influence the drug's commercial success and its ability to capture market share.
• Delays in the development of AMG 786, as indicated by slower-than-expected patient enrollment, could lead to setbacks in reaching market, impacting the timeline for potential revenue generation.
• Development challenges with xaluritamig, especially in a competitive landscape with multiple emerging agents for prostate cancer, could impact its ability to secure a significant market position, influencing future earnings.
• Uncertainty surrounding the effectiveness of the subcutaneous delivery of TEPEZZA and its ability to gain market acceptance against intravenous forms might affect patient preference and adoption, potentially impacting sales growth.