December 4, 2022
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Amgen defies the bear market

Thousand Oaks biotech giant posts solid results

By Jorge Mercado

Senior Staff Writer

Thousand Oaks-based Amgen’s shares have soared to record highs, even as competitors’ stocks have been hammered by the bull market.

Amgen, one of the world’s largest biotechnology companies, has been up about 25% year to date, compared to a loss of 29% for the NASDAQ, on which it trades.

Amgen reached its highest stock price ever on Nov. 11, when shares closed at $292.39 on Nov. 8.  And they were up another 1% from open on Nov. 16, closing at $283.77.

With other national indices suffering double digit losses for the year and the share prices of other companies struggling in the face of pandemic hangover effects, rising Federal Reserve interest rates, the global economic effects of Russia’s war in Ukraine and a possibly looming world-wide recession, Amgen has grown strongly in 2022.

Especially in the past month, hiking up 12.1%.

Positive earnings have played a large role.

On Nov. 3, Amgen reported  third quarter of 2022 net income of $2.1 billion, or $3.98 per share, up from last year’s totals of $1.8 billion and $3.31 per share.

When that total is adjusted for one-time losses, Amgen’s earnings per share was 15% higher at $4.70 a share, easily beating analysts’ expectations of $4.44 for the quarter, according to FactSet.

Overall revenue for the company dipped 1% to $6.6 billion, but investors have shown excitement over Amgen’s most recent launches, which hope to be blockbusters for the company — Tezspire and Lumakras.

Lumakras, a treatment for non-small cell lung cancer, generated sales of $57 million in the third quarter, a 3% decrease due to price adjustments in Germany, but the company’s volume sales were 15% higher, a record amount.

Sales for Tezpire, a treatment for severe asthma, accounted for $55 million in the third quarter, nearly doubling its second quarter sales of $29 million, driven by strong adoption by both allergists and pulmonologists across all severe asthma patient types.

Another reason the stock is up is continued excitement over the perceived potential of Amgen’s experimental weight-loss drug, which the company currently known as AMG133.

The day Amgen announced major improvements in patients who had received injections of the drug, it’s stock hit an historic high, $292.39.

Patients in the low-dose group lost 7.2% of their body weight on average after 85 days on the drug, while recipients of the high dose lost an average 14.5% body weight, the company said. 

Patients who received the placebo gained 1.5%, the company said.

These types of positive results means Amgen would be a major competition to fellow big drug makers Eli Lilly and Novo Nordisk.

Eli Lilly has a diabetes drug it’s testing as a potential treatment for obesity while Novo sells Wegovy, a weight-loss shot that has had production issues.

RBC Capital Markets analyst Brian Abrahams says Amgen’s drug could prove to make its own mark in the obesity-drug loss space. 

“With the successes and demand for obesity drugs currently on the market, the space is positioned for innovation and growth as the market looks to expand,” Abrahams said in a note to clients.

Oppenheimer analyst Jay Olson also felt strongly behind the news, raising Amgen’s price target from $290 to $300 and maintained his outperform rating on the stock.

That being said, Amgen’s drug is still in early-stage testing, especially compared to Novo’s WeGovy which is already out on the market and Eli Lilly’s treatment which is further along in the process. 

As a result some analysts, such as Mizuho Securities analyst Salim Syed retitraed its neutral rating on Amgen’s stock.

Overall, according to MarketBeat, Amgen has a consensus rating of Hold based on multiple analysts projections.