Amgen (NASDAQ:AMGN) saw its stock surge by 4.6% on Wednesday following a significant upgrade by Leerink Partners, which also raised the stock’s price target. Leerink Partners elevated its rating on Amgen from Market Perform to Outperform and increased the price target from $267 to $318.
According to an analyst from Leerink Partners, this rating change is based on the anticipation of multiple expansions and potential earnings upside. The analyst expects a ramp-up in pipeline developments for Amgen, with a particular focus on candidates in the fields of oncology, obesity, and cardiovascular disease. It is believed that Amgen possesses promising pipeline assets in the areas of obesity and inflammation, signifying substantial market potential. Additionally, a number of data readouts are anticipated in the next 12 months.
The analyst highlighted Amgen’s three potential blockbuster oncology candidates within its pipeline. These candidates include AMG 193, a PRMT5i inhibitor designed to target MTAP-null tumors in phase I, xaluritamig (STEAP1xCD3), a potential first-in-class option for prostate cancer in phase I, and tarlatamab, which is in phase III for small-cell lung cancers.
Amgen has displayed strong performance relative to its industry year-to-date, with its stock showing an 8% increase while the industry experienced a decline of 19.3%.
Leerink Partners’ analyst also emphasized the positive impact of Amgen’s recent acquisition of Horizon Therapeutics on the company’s near- and long-term earnings per share (EPS). The acquisition is expected to contribute to an 8% increase in earnings in 2024 and a 15% boost in 2025, according to the analyst.
In December 2022, Amgen announced its definitive agreement to acquire Horizon Therapeutics for $27.8 billion. However, in May, the Federal Trade Commission (FTC) raised concerns about the potential merger’s impact on competition. After resolving the FTC lawsuit in August, the acquisition of Horizon Therapeutics by Amgen was finalized on October 6. This acquisition has expanded Amgen’s portfolio with first-in-class early-in-lifecycle biologic drugs, including Tepezza, Krystexxa, and Uplizna.
It’s important to note that this upgrade was announced just ahead of Amgen’s upcoming third-quarter results, which are scheduled for release on October 31 after the market closes.
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