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AMGN

Amgen NasdaqGS:AMGN Stock Report

Last Price

US$248.35

Market Cap

US$132.9b

7D

0.6%

1Y

8.9%

Updated

11 Aug, 2022

Data

Company Financials +
AMGN fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance4/6
Financial Health3/6
Dividends5/6

AMGN Stock Overview

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

Amgen Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Amgen
Historical stock prices
Current Share PriceUS$248.35
52 Week HighUS$258.45
52 Week LowUS$198.64
Beta0.56
1 Month Change0.56%
3 Month Change2.03%
1 Year Change8.85%
3 Year Change24.61%
5 Year Change48.00%
Change since IPO23,047.18%

Recent News & Updates

Aug 11

Amgen: ChemoCentryx Buyout Papers Over Cracks In Long-Term Outlook

Amgen has agreed to buy ChemoCentryx for $3.7bn in cash. This may not be the long term answer to the company's patent expiry issues however - lead asset Avacopan still has much to prove. Amgen has protected best seller Enbrel from generic competition for >20 years but an expiry looms before the end of the decade. Amgen's debt - including $12.6bn of current liabilities - looks a little troubling too. The company may be okay and has some promising assets making their way to market but it's not amongst the Pharmas I am backing to generate share price upside in the near term. Investment Thesis - Big Pharma Overview The US "Big Pharma" sector has generally provided investors with strong returns over the past 5 years - not every company has been able to match the S&P 500, which has been remarkably strong, but as we can see below, all but Gilead (GILD) have provided a decent return - Eli Lilly's (LLY) return being exceptionally good. Share price performance of US Big Pharma sector - past 5 years. (TradingView) Furthermore, all of these companies - what I like to term as the "Big 8" US Pharmas - in order of market cap valuation Johnson & Johnson (JNJ), Eli Lilly, Pfizer (PFE), AbbVie (ABBV), Merck (MRK), Bristol Myers Squibb (BMY), Amgen (AMGN) and Gilead Sciences - are dividend payers, the average yield being 3.2%. "Big 8" US Pharmas - investment fundamentals compared. (My Table ) As we can see in the table above, there are many similarities - and some striking differences - between these companies, who all operate a similar business model - developing drugs, and gaining permission to market and sell them in the US and around the world. My rudimentary scoring system - which assesses companies on everything from share price performance, to profitability, debt, dividend, liquidity and more, suggests that Amgen may be the pick of the bunch (the lower the score the better). There are huge discrepancies in size - from JNJ's $442bn market cap valuation, to Gilead's $79bn - and revenue generation - Amgen generated "just" $25bn total revenues in FY21, JNJ $93bn, and Pfizer $81bn - but in general, profit margins, price to sales ratios, price to earnings ratios and dividend yields are closely matched. It's interesting to note Eli Lilly's being valued higher than Pfizer despite Pfizer's net income being >4x greater than Lilly's - this illustrates that share prices often move on perceived potential of a company as opposed to what the company is achieving today, and this is especially true of the Big Pharma industry, where drugs have limited shelf lives, being patent protected for ~10 years after which they become victim to generic competitors and their revenues are swiftly eroded. It's Tough At The Top - How Do The Likes Of Amgen Grow? So called "Blockbuster" drugs - drugs that are capable for delivering >$1bn in revenues per annum - are the name of the game in the Big Pharma industry, and as we can see in the above table, all of the "Big 8" have at least 7 blockbusters, JNJ leading the way with 14. More important still are drugs that drive "mega-blockbuster" sales - roughly speaking, >$5bn per annum would be considered a mega-blockbuster. Bristol Myers Squibb's Revlimid and Eliquis for example generated revenues of $12.1bn and $9.5bn respectively in 2021, Merck's Keytruda $17.2bn, AbbVie's Humira $20.7bn, Eli Lilly's Trulicity $6.5bn, JNJ's Stelara $9.1bn, and so on. Amgen's best selling drug, Enbrel - indicated for a range of autoimmune conditions including idiopathic arthritis, psoriatic arthritis, and plaque psoriasis, amongst others, falls just short of mega-blockbuster status, although I have included it in the above table. Amgen product sales in FY21. (Amgen 10-K 2021) As we can see in the table above Enbrel sales fell by 11% last year to $4.5bn, although its patents apparently do not expire until 2029, an extraordinary achievement given that Enbrel was first approved in 1998! Amgen acquired the company that marketed and sold the drug in 2001, and has successfully protected it from generic competition for 21 years and counting. By 2029, it has been estimated, the drug will have earned >$100bn for Amgen, playing an instrumental role in the company's transformation from a startup known as Applied Molecular Genetics into a $134bn market cap Pharma giant. There are generic competitors to Enbrel in Europe on the market, but Amgen does not market and sell the drug in Europe - Pfizer does. Meanwhile, sales of Prolia - approved in the U.S. for the treatment of postmenopausal women with osteoporosis at high risk for fracture - were up 18% year-on-year, however Prolia faces loss of patent exclusivity potentially in 2025, meaning its days as a multi-billion blockbuster are numbered. Otezla is a strong performer in the auto-immune field, approved for plaque psoriasis and psoriatic arthritis amongst other indications, but these are fiercely contested markets and Amgen faces competition from e.g. BMY's soon to be approved Deucravacitinib, AbbVie's Rinvoq and Skyrizi, Eli Lilly's Taltz, JNJ's Stelara, Novartis' (NVS) Cosentyx - the list is exhaustive. Xgeva - another bone therapy - does not appear to have patent protection beyond 2025 (according to Amgen's 10-K submission) whilst Neulasta, treating low white blood cell count - is experiencing rapidly falling sales owing to generics, and anemia therapy Aranesp faces a patent expiry in 2024. Repatha may be a saving grace, with sales growing and $2.5bn of peak sales mooted, although competition with another PCSK9 inhibitor, Praluent, is fierce. Kyprolis may be able to target >$2bn in peak sales, analysts have suggested, although multiple myeloma is a disease being targeted by cell therapies which have delivered excellent clinical data. In short, Amgen has battled its way into the "Big 8", but faces a struggle to stay there, as many of its best selling drugs are likely to suffer Loss of Exclusivity ("LOE") beginning from next year and continuing until the end of the decade. The company has responded by becoming acquisition hungry, although it should be noted Amgen's debt to equity ratio is high. According to the company's Q2'22 earnings presentation, cash position was $7.2bn, and long term debt was $35bn, whilst current liabilities stood at $12.6bn - a potential red flag for investors. Buying Its Way Out Of Trouble - Is ChemoCentryx Deal Good Value For Money? Amgen has made several acquisitions over the past 18 months, acquiring Five Prime Therapeutics and its gastric cancer drug bemarituzumab - a risky deal given the drug still has safety and efficacy hurdles to clear, it seems, and is unlikely to reach blockbuster sales unless it can win approvals in several markets, and Teneobio, another oncology player and bispecifics and multispecifics specialist, whose lead assets is still in Phase 1 studies. The latest acquisition of ChemoCentryx (CCXI) at least gives Amgen an already approved product to market and sell. I speculated that ChemCentryx' Avocapan - indicated to treat ANCA Vasculitis - may not be approved in a Seeking Alpha note from September 2021, and although I was wrong, early sales data did not impress and Chemocentryx stock retreated to ~$15 in May. Given Amgen is paying $52 per share for ChemoCentryx, and spending $3.7bn in cash to gain access to Avacopan, a drug that made sales of just $5.4m in Q122, is the Pharma getting value for money? It's been speculated that Avacopan could target other indications, with studies in Lupus nephritis ("LN"), Severe hidradenitis suppurativa ("HS"), and C3 glomerulopathy ("C3G") underway, which gives the drug blockbuster potential, although the Vasculitis approval was a real struggle, with an FDA Advisory Committee on whether to approve the drug, and the FDA voicing criticisms of the pivotal studies undertaken, mainly around the use of steroids in patients in the Avacopan arm. At first glance, then, Amgen appears to have paid an eyebrow raising amount of money for an asset that has not yet proven it can deliver in a commercial setting. As with the Five Prime and Teneobio deals management appears to be betting on its own ability to turn promising if unproven assets into blockbusters, keeping pace with the rest of the "Big 8" in the process. Q2'22 Earnings Amgen delivered revenues of $6.6bn in FY22m and net income of $2.5bn - an impressive margin of 38% - although revenues up just 1% year-on-year, and guidance for FY22 is for revenues of $25.5bn - $26.4bn, and non-GAAP EPS of $17 - $18, which translates to a forward PE of ~14x, Again, that's impressive, but based on non-GAAP EPS of $4.65 versus GAAP EPS of $2.45 in Q2'22, perhaps we should double the P/E ratio for a more accurate assessment of value. Enbrel sales fell year-on-year, to $1.05bn, although Xgeva sales were +9%, and Kyprolis, Otezla, and Repatha all delivered double digit growth year-on-year. Lumakras, one of the jewel's in the crown of Amgen's pipeline, being a drug targeting non-small lung cancer ("NSCLC") and the KRAS signalling pathway, once thought undruggable but expressed in a multitude of cancer, is now approved, but sales in Q2'22 were just $77m, and fresh safety concerns have surfaced when Lumakras is used alongside checkpoint inhibitors - a very successful type of drug class that includes Merck's mega-blockbuster Keytruda. Tezspire - jointly developed with AstraZeneca (AZN) and recently approved to treat asthma - is another potential blockbuster in waiting, but revenues will presumably be divided between the two companies. Conclusion - Much To Admire But Plenty To Fear - Amgen Would Not Make My Top 5 Pharmas To Buy List

Aug 09
Is Amgen (NASDAQ:AMGN) A Risky Investment?

Is Amgen (NASDAQ:AMGN) A Risky Investment?

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Shareholder Returns

AMGNUS BiotechsUS Market
7D0.6%1.2%1.3%
1Y8.9%-23.0%-11.7%

Return vs Industry: AMGN exceeded the US Biotechs industry which returned -22.1% over the past year.

Return vs Market: AMGN exceeded the US Market which returned -11.6% over the past year.

Price Volatility

Is AMGN's price volatile compared to industry and market?
AMGN volatility
AMGN Average Weekly Movement2.1%
Biotechs Industry Average Movement12.5%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: AMGN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: AMGN's weekly volatility (2%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198024,200Bob Bradwayhttps://www.amgen.com

Amgen Inc. discovers, develops, manufactures, and delivers human therapeutics worldwide. It focuses on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology, and neuroscience areas. The company’s products include Enbrel to treat plaque psoriasis, rheumatoid arthritis, and psoriatic arthritis; Neulasta that reduces the chance of infection due a low white blood cell count in patients cancer; Prolia to treat postmenopausal women with osteoporosis; Xgeva for skeletal-related events prevention; Otezla for the treatment of adult patients with plaque psoriasis, psoriatic arthritis, and oral ulcers associated with Behçet’s disease; Aranesp to treat a lower-than-normal number of red blood cells and anemia; KYPROLIS to treat patients with relapsed or refractory multiple myeloma; and Repatha, which reduces the risks of myocardial infarction, stroke, and coronary revascularization.

Amgen Inc. Fundamentals Summary

How do Amgen's earnings and revenue compare to its market cap?
AMGN fundamental statistics
Market CapUS$132.85b
Earnings (TTM)US$6.58b
Revenue (TTM)US$26.38b

20.2x

P/E Ratio

5.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
AMGN income statement (TTM)
RevenueUS$26.38b
Cost of RevenueUS$6.40b
Gross ProfitUS$19.99b
Other ExpensesUS$13.41b
EarningsUS$6.58b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)12.29
Gross Margin75.75%
Net Profit Margin24.92%
Debt/Equity Ratio1,509.8%

How did AMGN perform over the long term?

See historical performance and comparison

Dividends

3.1%

Current Dividend Yield

62%

Payout Ratio

Does AMGN pay a reliable dividends?

See AMGN dividend history and benchmarks
When do you need to buy AMGN by to receive an upcoming dividend?
Amgen dividend dates
Ex Dividend DateAug 17 2022
Dividend Pay DateSep 08 2022
Days until Ex dividend5 days
Days until Dividend pay date27 days

Does AMGN pay a reliable dividends?

See AMGN dividend history and benchmarks