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3 Charts Every Amgen Investor Needs to See



<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Amgen (NASDAQ: AMGN) ranks as one of the largest biotechs on the planet, and has richly rewarded investors for years. Since its initial public offering (IPO) in 1983, Amgen shares have skyrocketed more than 49,000%. " data response = "11"> Amgen (NASDAQ: AMGN) ranks as one of the biggest biotechs on the planet. And its stock has richly rewarded investors for years. Since its initial public offering (IPO) in 1
983, Amgen shares have skyrocketed more than 49,000%.

But the Amgen of the Past is not the Amgen of today. Is the big biotech stock still a good pick for the long run? Here are three charts that everybody needs to see.

Three scientists in a lab, with one holding a test tube and another writing on a notepad

Image source: Getty Images.

1. Blockbusters losing steam

In 2018, Amgen's product lineup included seven blockbuster drugs. Only three of them generated year-over-year sales growth, though. The fact is that Amgen now has an aging group of drugs that are losing steam.

Bar chart showing sales of five Amgen drugs by quarter, from Q1 2018 to Q1 2019

Data source: Amgen quarterly reports. Chart by author.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The chart above shows that in its latest quarter total sales for five of Amgen's top-selling products fell nearly $ 500 million year over year. But the picture for these drugs is even worse than this chart shows. " data response = "57"> The chart above shows that in its latest quarter, total sales for five of Amgen's top-selling products are nearly $ 500 million year over year. But the picture for these drugs shows even worse than this chart shows.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Amgen's No. 1 blockbuster, Enbrel, faces increasingly stiffer competition. And that competition could soon pick up as more with AbbVie April, and anticipating another approval for upadacitinib in rheumatoid arthritis later this year. " data response time = "58"> Amgen's No. 1 blockbuster, Enbrel, faces increasingly stiffer competition.

<p.

<p. class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Neulasta now faces two biosimilar rivals ; one launched in July 2018 and another in January 2019. Expect sales for Amgen's bone marrow stimulate to decline at a faster rate in the coming quarters. data response time = "59"> Neulasta now faces two biosimilar rivals; one launched in July 2018 and another in January 2019. Others could be on the way. Expect sales for Amgen's bone marrow stimulate at a faster rate in the coming quarters

A biosimilar to Epogen launched in 2018 Q4, with more biosimilars likely on the way. These products could also weigh on sales of Aranesp, which faces additional competition as well. A generic version of Sensipar hit the U.S. market in December 2018.

The problem for Amgen is that these five drugs generate nearly 63% of the company's total product sales last year. Amgen does have other products that are growing, including osteoporosis drugs Prolia and Xgeva, along with cholesterol drug Repatha, leukemia drug Blincyto, and migraine drug Aimovig. But there's a lot of lost revenue to offset as its big winners of the past begin to fade.

2. What's on the way

Could Amgen get help from its pipeline? Sure. However, the biotech has much in late-stage development as it needs, as the chart below shows:

Graphic showing Amgen's pipeline by phase, with most drugs and biosimilars in phase 1

Image source: Amgen. or Amgen's late-stage programs target additional indications for existing drugs Enbrel, Imlygic, and Kyprolis. AMG 520 is a BACE inhibitor targeting Alzheimer's disease. So far, every other BACE inhibitor has flopped, though: omecant mecar car, for chronic heart disease; and tezepelumab, which is in phase 3 testing for treating asthma, and in phase 2 testing for treating atopic dermatitis. But the real promise for Amgen lies in its early-stage pipeline, which is shock-full of bi-specific T-cell engager (BiTE) therapies targeting various types of cancer. The downsides are that early-stage candidates have higher levels of risk, and are at best several years away from contributing to Amgen's growth.

3. Important in the meantime

The two charts shown earlier might seem a little depressing. However, there's another chart Amgen Investors Chart ” class=”JsEnabled_Op(0) JsEnabled_Bg(n) Trsdu(.42s) Bgr(nr) Bgz(cv) Maw(100%)” itemprop=”url” style=”background-image:url(https://s.yimg.com/ny/api/res/1.2/k.1PHEWMX1QGro_TeZE.Aw–~A/YXBwaWQ9aGlnaGxhbmRlcjtzbT0xO3c9ODAw/http://media.zenfs.com/en-US/homerun/motleyfool.com/f6feef7e950e26db177df9bd0221f2eb);” src=”https://s.yimg.com/g/images/spaceball.gif” data-reactid=”99″/>

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" AMGN Dividend data at YCharts . " data response = "106"> AMGN Dividend data by YCharts.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Amgen claims one of the fastest-growing dividends in the healthcare sector. Its dividend yield now stands at 3.23%. The company also has" an invisible dividend "- its share buybacks . " data response time = "107"> Amgen claims one of the fastest-growing dividends in the healthcare sector. Its dividend yield now stands at 3.23%. The company also has "an invisible dividend" – its share buybacks.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In 2018, Amgen repurchased $ 17.9 billion of its stock. That's the equivalent of acquiring several small-cap biotechs. Amgen CFO David Meline said on the company's Q1 conference call in April That Amgen spent $ 3 billion on stock buybacks in the first quarter, and expects to buy up plenty of additional shares in Q2. The net impact of these buybacks increases the value of existing Amgen shares. data response = "108"> In 2018, Amgen repurchased $ 17.9 billion of its stock. That's the equivalent of acquiring several small-cap biotechs. Amgen CFO David Meline said on the company's Q1 conference call in April that Amgen spent $ 3 billion on stock buybacks in the first quarter, and expects to scoop up plenty of additional shares in Q2. The net impact of these buybacks increases the value of existing Amgen shares.

A new Amgen

These charts point to the emergence of a new Amgen. The drugs that have contributed tremendously to the biotech's success so far in the 21st century will not be the ones to carry it into the next decade. Amgen is probably to be more of an income play than a growth story for the next few years.

But the company's trajectory could very well change down the road. Amgen's early-stage pipeline has a lot of potential. The company's big cash stockpile of more than $ 26 billion also gives it plenty of flexibility to add more programs to its pipeline. The charts that count the speech for Amgen will almost certainly look different five years from now.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) ) – sm "type =" text "content =" More From The Motley Fool "data-response =" 112 "> More From The Motley Fool

<p class =" canvas -atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Keith Speights owns shares of AbbVie. recommends Amgen The Motley Fool has a disclosure policy . "data-response =" 120 "> Keith Speights owns shares of AbbVie. The Motley Fool recommends Amgen. The Motley Fool has a disclosure policy.


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