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Amgen Inc AMGN

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Maintaining Our $215 FVE for Amgen Following Expected Weakness in Q1

Karen Andersen, CFA Sector Strategist

Analyst Note

| Karen Andersen, CFA |

Amgen's first-quarter results were in line with our expectations, and after factoring the recent Five Prime Therapeutics acquisition into our valuation model, we're not making any changes to our fair value estimate, as we anticipate a rebound in growth for several products that faced headwinds this quarter. That said, our estimated five-year top-line growth (2%) and bottom-line growth (4%) are slightly lower than Visible Alpha consensus (3% and 5%, respectively), and we continue to see the shares as slightly overvalued. In the pipeline, we remain bullish on lung cancer drug Lumakras/sotorasib (expected Food and Drug Administration approval in August) and asthma drug tezepelumab (potential 2022 launch), which we think help support the firm's stable wide moat.

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Company Profile

Business Description

Amgen is a leader in biotechnology-based human therapeutics, with historical expertise in renal disease and cancer supportive-care products. Flagship drugs include red blood cell boosters Epogen and Aranesp, immune system boosters Neupogen and Neulasta, and Enbrel and Otezla for inflammatory diseases. Amgen introduced its first cancer therapeutic, Vectibix, in 2006 and markets bone-strengthening drug Prolia/Xgeva (approved 2010) and Evenity (approved 2019). The acquisition of Onyx bolstered the firm's therapeutic oncology portfolio with Nexavar and Kyprolis. Recent launches include Repatha (cholesterol-lowering) and Aimovig (migraine). Amgen's own biosimilar portfolio includes key products Mvasi (biosimilar Avastin), Kanjinti (biosimilar Herceptin), and Amgevita (biosimilar Humira).

One Amgen Center Drive
Thousand Oaks, CA, 91320-1799
T +1 805 447-1000
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Classic Growth
Employees 24,300