A Look at Amgen’s (AMGN) Valuation After Full FDA Approval for IMDELLTRA in Small Cell Lung Cancer

Amgen (AMGN) just secured full approval from the FDA for IMDELLTRA, its new therapy for adults with advanced small cell lung cancer that has progressed after platinum-based chemotherapy. This approval, together with its key status in updated NCCN Guidelines, marks a significant new chapter for the company's oncology pipeline.

See our latest analysis for Amgen.

Amgen's recent clinical win has energized investor sentiment, contributing to an impressive 18.3% share price return over the past month and a 32.9% gain year-to-date. The company’s 1-year total shareholder return of 27.0% signals strengthening momentum, supported by continued product innovation and market attention.

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Yet with shares riding notable gains, questions remain. Is Amgen truly undervalued following its latest breakthrough, or has the market already priced in the company’s pipeline and future growth potential?

Most Popular Narrative: 8% Overvalued

Compared to Amgen’s last close price of $344.57, the most closely watched narrative assigns a fair value target of $318.51. That gap is the basis for ongoing debate and sets the stage for the assumptions driving the latest valuation.

Advancements in personalized and targeted therapies, reflected in the robust late-stage pipeline (for example, MariTide for obesity and type 2 diabetes, Repatha and olpasiran for cardiovascular, multiple bispecific T-cell engagers for oncology), position Amgen to launch high-margin, first-in-class products that drive both top-line growth and margin expansion in the coming years.

Read the complete narrative.

Curious what’s fueling this premium valuation? The narrative centers on blockbuster pipeline bets, margin expansion, and a profitability jump the market rarely expects in big pharma. Only one set of growth forecasts is bold enough to back this price. Find out what makes it possible.

Result: Fair Value of $318.51 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent drug pricing pressure and fierce biosimilar competition could challenge Amgen’s ability to sustain revenue growth and margin expansion in the years ahead.

Find out about the key risks to this Amgen narrative.

Another View: Discounted Cash Flow Says Undervalued

While valuation using earnings multiples shows Amgen as pricey compared to its biotech peers, our DCF model offers a sharp contrast. Based on long-term cash flow projections, the DCF suggests a fair value of $555.66, which marks Amgen stock as significantly undervalued at current levels. Could the market be missing a bigger story?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Amgen Narrative

If the current analysis doesn't align with your perspective or you want to dive deeper into the data yourself, you can craft your own Amgen narrative in just minutes. Do it your way.

A great starting point for your Amgen research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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