Amgen Earnings: Maintaining $268 Fair Value Estimate Following In-Line Quarter and Horizon Deal Completion

Wide moat Amgen reported third-quarter results that were consistent with our expectations, and we're maintaining our $268 fair value estimate. We think shares look relatively fairly valued, as investors appear to be weighing the potential growth prospects for key pipeline programs in cardiometabolic disorders and oncology against continuing competition for products like oncology drug Lumakras and psoriasis drug Otezla. The Horizon Therapeutics acquisition officially closed in early October, which significantly expanded Amgen's rare disease business and should drive near-term growth, although we're cautious on Tepezza's ability to significantly expand sales in thyroid eye disease as well as upcoming competing to gout drug Krystexxa from Sobi's SEL-212. Competition continues to drive a wedge between product sales growth (5% in the third quarter) and volume growth (11%), although this difference was accentuated in the quarter by some changes to Amgen's estimated sales deductions.