Amgen Stock: Recent Weakness Is Not A Buying Opportunity Yet

seekingalpha05-02

Amgen Inc. shares have dropped some 20% since reaching an all-time high in February due to a below-consensus outlook and patent concerns.The company's four pillars of growth are General Medicine, ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2432165561?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1323875427/image_1323875427.jpg","is_english":true,"pubTime":"2024-05-02 05:07","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2432165561","market":"us","top_or_hot":-1,"title":"Amgen Stock: Recent Weakness Is Not A Buying Opportunity Yet","media":"seekingalpha","content":"<div>\n<p>Amgen Inc. shares have dropped some 20% since reaching an all-time high in February due to a below-consensus outlook and patent concerns.The company's four pillars of growth are General Medicine, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4688193-amgen-stock-recent-weakness-is-not-a-buying-opportunity-yet\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Amgen Stock: Recent Weakness Is Not A Buying Opportunity Yet</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAmgen Stock: Recent Weakness Is Not A Buying Opportunity Yet\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-02 05:07 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4688193-amgen-stock-recent-weakness-is-not-a-buying-opportunity-yet><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Amgen Inc. shares have dropped some 20% since reaching an all-time high in February due to a below-consensus outlook and patent concerns.The company's four pillars of growth are General Medicine, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4688193-amgen-stock-recent-weakness-is-not-a-buying-opportunity-yet\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0320765992.SGD","symbol_name":"FTIF - Franklin Biotechnology Discovery A Acc SGD","start_time":0,"source_url":"https://seekingalpha.com/article/4688193-amgen-stock-recent-weakness-is-not-a-buying-opportunity-yet","article_id":"2432165561","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1323875427/image_1323875427.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2432165561","pubTimestamp":1714597664,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Amgen Inc. shares have dropped some 20% since reaching an all-time high in February due to a below-consensus outlook and patent concerns.The company's four pillars of growth are General Medicine, Oncology, Inflammatory Diseases, and Rare Diseases.Amgen's obesity candidate MariTide has the potential to become its biggest revenue producer, with Phase 2 results expected in late 2024.Time to buy the dip?","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0320765992.SGD":"FTIF - Franklin Biotechnology Discovery A Acc SGD","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","LU0289739699.SGD":"AB INTERNATIONAL HEALTH CARE PORTFOLIO \"A\" (SGD) ACC","LU0238689110.USD":"贝莱德环球动力股票基金","IE00BJT1NW94.SGD":"JANUS HENDERSON GLOBAL LIFE SCIENCES \"A2\" (SGDHDG) ACC","BK4532":"文艺复兴科技持仓","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","NVO":"诺和诺德","LU1165135440.EUR":"BNP Paribas Aqua Classic Cap EUR","A":"安捷伦科技","BK4160":"多样化房地产投资信托v","GIPR":"Generation Income Properties Inc.","BK4534":"瑞士信贷持仓","LU0058720904.USD":"联博国际健康护理基金A","BK4139":"生物科技","BK4533":"AQR资本管理(全球第二大对冲基金)","LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","LU1814569148.SGD":"WELLINGTON GLOBAL QUALITY GROWTH \"D\" (SGDHDG) ACC","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0672654240.SGD":"FTIF - Franklin US Opportunities A Acc SGD-H1","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","BK4588":"碎股","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","LU0122379950.USD":"贝莱德世界健康科学A2","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","LU0708995401.HKD":"FRANKLIN U.S. OPPORTUNITIES \"A\" (HKD) ACC","BK7104":"黄金","LLY":"礼来","LU2237438978.USD":"Amundi Funds US Pioneer A2 (C) USD","SG9999001440.SGD":"United Global Dividend Equity Fund A SGD Dist","LU2468319806.SGD":"MANULIFE GF HEALTHCARE \"AA\" (SGDHDG) ACC","LU1721428933.USD":"法巴全球经典环境基金RH MD Dis","SG9999001176.USD":"United Global Healthcare Acc USD","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","NVO.AU":"NOVO RESOURCES CORP-CDI","BK4581":"高盛持仓","AMGN":"安进","LU1057294990.SGD":"Blackrock World Healthscience A2 SGD-H","SG9999001176.SGD":"UOB UNITED GLOBAL HEALTHCARE \"SGD\" (ACC)","IE00B2B36J28.USD":"JANUS HENDERSON GLOBAL LIFE SCIENCES \"I1\" (USD) INC","LU1267930730.SGD":"富兰克林美国机遇基金AS Acc SGD (CPF)","LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU2092937221.SGD":"Blackrock Circular Economy A2 SGD-H","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU1988902786.USD":"FULLERTON LUX FUNDS GLOBAL ABSOLUTE ALPHA \"I\" (USD) ACC","LU2242646821.SGD":"Fidelity Global Dividend Plus A-MINCOME(G)-SGD","LU1023059063.AUD":"BGF WORLD HEALTHSCIENCE \"A2\" (AUDHDG) ACC","SDZNY":"Sandoz Group AG"},"translate_title":"安进股票：最近的疲软还不是买入机会","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMGN":1,"A":1,"SDZNY":1,"NVO.AU":1,"NVO":1,"LLY":1,"GIPR":1},"content_text":"Amgen Inc. shares have dropped some 20% since reaching an all-time high in February due to a below-consensus outlook and patent concerns.The company's four pillars of growth are General Medicine, Oncology, Inflammatory Diseases, and Rare Diseases.Amgen's obesity candidate MariTide has the potential to become its biggest revenue producer, with Phase 2 results expected in late 2024.Time to buy the dip? An analysis around Amgen follows in the paragraphs below.JHVEPhoto Shares of biotech pioneer Amgen Inc. (NASDAQ:AMGN) are off nearly 20% since attaining an all-time high of $329.72 in February, pressured by a below-consensus FY24 outlook and patent concerns. In an attempt to mitigate its denosumab 2025 patent cliff, the company spent $27.8 billion to onboard Horizon in October 2023, raising its net leverage to 4.4. With Phase 2 results for potentially game-changing obesity candidate MariTide due at YE24 and Medicare price negotiations looming for Enbrel in 2026, along with earnings coming out post-market on May 2nd, Amgen merited a deeper dive. An analysis follows below. Seeking Alpha Company Overview Amgen Inc. is a Thousand Oaks, California-based biotechnology concern focused on the development of therapies for a wide array of conditions, including oncology, inflammatory conditions, general medicine, and with its October 2023 acquisition of Horizon Therapeutics, rare diseases. The company had 18 products with record sales in FY23 and nine blockbuster therapies, a number that will likely grow to at least 13 in 2024. It is also advancing 19 compounds in 24 Phase 3 trials. Arguably the pioneer of the biotechnology industry, Amgen was founded as Applied Molecular Genetics in 1980 and went public under its current nomenclature in 1983, raising gross proceeds of ~$40 million at $0.40 a share, after giving effect to five stock splits. Shares of AMGN trade at around $274.00 a share, translating to an approximate market cap of $147 billion. What follows is a brief overview of the company's four product segments and attendant growth opportunities. In its own words, Amgen's four pillars of growth are: General Medicine; Oncology; Inflammatory Diseases; and Rare Diseases. Attached is a general overview of important milestones in its pipeline as well. Amgen Company Presentation General Medicine General Medicine houses the company's best-selling therapy in 2023, post-menopausal osteoporosis med Prolia (denosumab), which delivered FY23 sales of $4.05 billion, up 12% from FY22. Prolia and its sister therapy Xgeva (denosumab) are subject to patent cliffs in 2025. This issue was brought more into focus when Sandoz Group AG (OTCQX:SDZNY) received FDA approval for a denosumab biosimilar (Jubbonti) on March 5, 2024. Prolia is often prescribed in combination with Evenity (romosozumab) for those with high fracture risk. The latter generated FY23 sales of $1.16 billion, up 47% from FY22. Also included in this category is cholesterol med Repatha (evolocumab), which accounted for FY23 sales of $1.64 billion, up 26% from FY22. Wrapping up the blockbuster meds in this segment is anemia treatment Aranesp (darbepoetin alfa), which was responsible for FY23 sales of $1.36 billion, down 4% from FY22. The clinical pipeline in this segment is the cause of much investor enthusiasm, due to Amgen's obesity program MariTide (maridebart cafraglutide), a bispecific molecule that conjugates monoclonal anti-human glucose-dependent insulinotropic polypeptide receptor (GIPR) antagonist antibody to two glucagon-like peptide 1 (GLP-1) analogue agonist peptides employing amino acid linkers. Phase 1 data suggests that MariTide may be superior to Novo Nordisk A/S's (NVO) Wegovy (semaglutide) and Eli Lilly and Company's (LLY) Zepbound (tirzepatide). In a dose-finding trial, Amgen's bispecific was able to produce mean body weight loss of 14.5% by day 85 versus 1.5% for placebo. By comparison, Wegovy and Zepbound users experienced 15% and 21% weight losses (respectively) after one year. The critical competitive delineations for MariTide are twofold. First, its longer half-life implies a greater duration of its effect, translating into less frequent dosing. Both Wegovy and Zepbound are subject to once-weekly subcutaneous administrations. Second, maximum weight loss with MariTide was sustained for two months after the last dose, which implied superiority to both Wegovy, whose users regained two-thirds of their weight loss one year after the last dose, and Zepbound, whose patients experienced a 14% weight regain over the same period. Phase 2 data are expected to be read out in late 2024. Given the projected $100 billion market (2030) for obesity meds, further validation of MariTide's results could set it on a course to be Amgen's biggest revenue producer by the end of the decade. That said, in addition to Wegovy and Zepbound, there are at least five other GLP-1 compounds currently pursuing obesity indications in the clinic. The company is also evaluating an oral obesity med (AMG 786) with data due in 1H24. Also of note in General Medicine, Repatha is attempting label expansion (prevention) in a Phase 3 trial and small interfering RNA therapy olpasiran is undergoing evaluation in a Phase 3 study to reduce lipoprotein (A) synthesis in cardiovascular disease patients. Oncology Oncology includes Prolia's sister Xgeva, which is prescribed for skeletal-related events in multiple myeloma. It generated FY23 sales of $2.11 billion, up 5% over FY22, and is subject to the same 2025 patent cliff. The other two blockbuster therapies in this category are thrombocytopenia med Nplate (romiplostim) (FY23 sales of $1.48 billion, up 13%) and multiple myeloma treatment Kyprolis (carfilzomib) ($1.40 billion, up 13%). Most likely joining them in FY24 are colorectal cancer med Vectibix (panitumumab) ($984 million, up 10%) and acute lymphoblastic leukemia [ALL] drug Blincyto (blinatumomab) ($861 million, up 48%). The chief late-stage clinical oncology candidate is tarlatamab, a first-in-class delta-like ligand 3 bispecific T-cell engager, for which Amgen has filed a BLA for third-line treatment of advanced small cell lung cancer with a PDUFA date of June 12, 2024. The solid tumor program is undergoing assessment in three other Phase 3 trials, as well as four Phase 1 studies. Amgen is attempting label expansion with Blincyto, having filed a BLA with a June 21, 2024, PDUFA date for the same CD19-positive B-cell precursor ALL indication in a first-line setting. Also, noteworthy: second-line non-small cell lung cancer (NSCLC) med Lumakras (sotorasib) suffered a significant setback when the FDA issued a complete response letter to Amgen's application for its full-approval in December 2023, after granting accelerated approval in 2021. The company plans to submit a BLA for Lumakras in combination with Vectibix in the treatment of chemo-refractory KRAS G12C-mutated metastatic colorectal cancer in 1H24. Amgen has also initiated a Phase 3 trial for Lumakras in combination with chemotherapy in a first-line setting for NSCLC. Additionally, investigational fibroblast growth factor receptor 2b targeting monoclonal antibody bemarituzumab is currently being studied with chemotherapy in a Phase 3 trial for first-line gastric cancer. Inflammatory Diseases Inflammation features arthritis and psoriasis meds Enbrel (etanercept) (FY23 sales of $3.70 billion, down 10% versus FY22) and Otezla (apremilast) ($2.19 billion, down 4%). On the wane, these two therapies represented Amgen's second and third-largest revenue generators in FY23. After approximately 26 years of market exclusivity, Enbrel will be subject to Medicare price negotiation in 2026, before key patents expire in 2029. Growth from commercial therapies in this segment includes asthma treatment Tezspire (tezepelumab), which was approved in 2021 and generated FY23 sales of $567 million, up 234% over FY22. Its 4Q23 sales of $177 million represented quarter-over-quarter growth of 10%. Also, arthritis/psoriasis Humira biosimilar Amjevita (adalimumab) launched domestically in 2023 and generated sales of $126 million ($626 million worldwide). Amgen is attempting label expansion into three other related indications with Tezspire through one Phase 2 and two Phase 3 trials. Investigational anti-OX40 monoclonal antibody rocatinlimab is undergoing assessment in a Phase 3 trial for moderate to severe atopic dermatitis. Rare Diseases After its $27.8 billion acquisition of Horizon, Amgen essentially created a rare disease category for its therapies. In 4Q23, led by Tepezza (teprotumumab) for thyroid eye disease, Krystexxa (pegloticase) for chronic refractory gout and Uplizna (inebilizumab) for neuromyelitis optic spectrum disorder, Horizon's therapies were responsible for 4Q23 revenue of $954 million, with initial contributions not beginning until October 6th. Tepezza, Uplizna, and investigational med dazodalibep (Sjögren's syndrome) are currently undergoing evaluations in Phase 3 studies. In addition to Horizon's portfolio, management anticipates $500 million in cost synergies from the deal by year three. FY23 Financials & FY24 Outlook Aided by nine brands achieving record sales in 4Q23, Amgen was able to produce FY23 non-GAAP earnings of $18.65 a share on revenue of $28.2 billion versus $17.69 a share (non-GAAP) on revenue of $26.3 billion in FY22, representing gains of 5% and 7%, respectively. These results were provided after the close on February 6, 2024, when the company posted 4Q23 non-GAAP earnings of $4.71 a share, besting Street consensus by $0.12. Amgen Company Presentation On that same press release, management forecasted FY24 non-GAAP earnings of $19.60 per share on revenue of $33.1 billion, based on range midpoints, reflecting a full-year contribution from Horizon. The bottom-line outlook was $0.30 a share below the Street consensus, prompting a 6% selloff in the subsequent trading session, its worst one-day drop in more than two-and-a-half years. Coupled with the impending $6.2 billion denosumab franchise patent cliff, it is unsurprising to see shares of AMGN down significantly since reaching an all-time high of $329.72 a share on February 5, 2024. Balance Sheet & Analyst Commentary Another concern is Amgen's leverage. To acquire Horizon, Amgen had to onboard debt of $28 billion, $24 billion of which came from the issuance of senior notes. That transaction helped raise its debt to $64.6 billion versus cash of $10.9 billion for a net leverage of 4.4. With an operating cash flow of $8.5 billion, the company had no issue raising its quarterly dividend by 6% to $2.25 beginning in 1Q24, for a current yield of 3.3%. Amgen also repurchases its stock, but committed to debt reduction in FY24, stating that it would buy back no more than $500 million of its own shares. Street analysts lean mixed on Amgen, with just over two dozen analyst firms currently split on its prospects and between Buy and Hold ratings. On average, they expect the behemoth to earn $19.48 a share (non-GAAP) on revenue of $32.95 billion in FY24, followed by $21.00 a share (non-GAAP) on revenue of $34.1 billion in FY25. Verdict With a patent cliff facing Prolia/Xgeva in 2025 and Enbrel subject to price negotiations in 2026, over a third of Amgen Inc.'s sales are at risk. Considering the company's FY24 interest expense for 2024 might outstrip revenue from Prolia, there will be plenty of pressure on Horizon's portfolio to perform, as well as on MariTide's Phase 2 results around YE24. Although the company appears investible with a PE on FY24E EPS of 14.1, it does not when viewed through its EV/EBITDA of 13.6. Admittedly, the EV/EBITDA metric reflects all the debt and only one (almost) full quarter from Horizon. That said, applying the same EBITDA margin to a full year of Horizon revenue (October 6 through December 31, 2023, annualized) produces a still expensive EV/EBITDA of 12.2. With data from MariTide's Phase 2 study not forthcoming until YE24, shares of AMGN are poised to drift lower until anticipation regarding those results builds in 2H24. For now, they are to be avoided.  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2432165561"}