Amgen Stock’s Strong Performance: What’s Behind It?

Amgen Stock

Amgen (NASDAQ:AMGN) stands tall as one of the leading biotech giants globally, dominating various markets including oncology/hematology, cardiovascular disease, neuroscience, inflammation, bone health, and nephrology. Based in Thousand Oaks, CA, the company boasts a robust pipeline of cancer drugs and maintains a formidable cash position within the biotech sector, paving the way for potential acquisitions to drive long-term growth. Additionally, Amgen’s strategy includes leveraging biosimilar drugs to further its growth trajectory.

Over the past year, Amgen has significantly outpaced industry standards, with its shares surging by 13.0% compared to a 7.6% decline in the broader industry. So, what factors are driving this remarkable performance?

Key Drivers

Sales Growth: Amgen anticipates a surge in sales from products like Tezspire, Evenity, Repatha, Prolia, and Tavneos, which are poised to offset declining revenues from oncology biosimilars and established legacy products such as Enbrel in 2024.

Exciting Pipeline Developments: Amgen boasts a promising pipeline, particularly in areas like obesity and inflammation, indicating substantial market potential. Noteworthy pipeline data readouts are expected in 2024, including from obesity programs. Maridebart cafraglutide, a GLP-1 receptor, stands out as a key candidate in the obesity pipeline, with top-line data from a phase II study expected by late 2024. Additionally, the company is expanding its study to explore the candidate’s potential for sustained weight loss beyond 52 weeks. Furthermore, initial top-line data from the phase I study on AMG 786, Amgen’s small molecule obesity candidate, is anticipated in the first half of 2024.

Advancements in Biosimilar Portfolio: Amgen’s biosimilars of J&J’s Stelara (Wezlana/ABP 654), Alexion’s Soliris (Bekemv/ABP 959), and Regeneron’s Eylea (ABP 938) have completed successful phase III studies, positioning the company for an early launch of these critical biosimilars. Notably, Wezlana received approval in the United States in October 2023 and is scheduled for launch in 2025.

Horizon Therapeutics Acquisition: Amgen’s acquisition of Horizon Therapeutics for $27.8 billion in October 2023 has significantly bolstered its rare disease business. This strategic move has enriched Amgen’s portfolio with Horizon’s rare disease drugs such as Tepezza, Krystexxa, and Uplizna, promising further revenue growth and earnings accretion.

In sum, Amgen’s proactive investment in M&A activities, including acquisitions and strategic partnerships, underscores its commitment to innovation and growth in the biotech landscape.

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