Amgen Shares Remain Fairly Valued Following In-Line Q2 and ChemoCentryx Deal

Amgen’s product sales grew by 3% in the second quarter, with 5% growth excluding foreign-currency headwinds and 10% volume growth showing underlying strength. Top- and bottom-line results were slightly ahead of our expectations, but we’re maintaining our full-year forecast and $260 per share fair value estimate. We saw steady growth from established brands like bone drug Prolia/Xgeva, cholesterol-lowering drug Repatha, and psoriasis drug Otezla. Newer drugs like osteoporosis drug Evenity, lung cancer drug Lumakras, and asthma drug Tezspire also helped counter declining sales of older drugs like immunology drug Enbrel as well as fading sales of the firm’s oncology biosimilars, which are already seeing significant competition and pricing pressure. We see Amgen shares as fairly valued, and we continue to see the firm’s newer products and pipeline supporting a wide moat. We’re particularly interested in upcoming data this weekend from Lumakras and small-cell lung cancer drug candidate tarlatamab, as these could boost our forecasts for Amgen’s oncology lineup.