Stock price when the opinion was issued
It's been tough in healthcare, but Amgen is good. They spent a few years ago $28 billion to buy Horizon Therapeutics to deepen their bench in biotech, including blood cancer drugs. Trades at a low multiple and pays over a 3% dividend. Plus they have a potential GLP-1 drug.
AMGN is a large, safe, blue chip healthcare company trading at a low valuation of 13X earnings, with a 3.29% dividend that has shown growth. Cash flow is high and stable and the company has shown good historical earnings growth. Cons are that earnings growth is slowing, the sector is vulnerable to possibly-negative government changes (price controls) and lots of competition on some of its newer products. We would like to see a better future pipeline of products. Amgen's reliance on legacy drugs, like Prolia, and biosimilars to drive growth is likely to create an overhang as these products lose exclusivity over the coming years. Its last quarter was decent, with results ahead of expectations. We would consider it a decent, safe buy in the healthcare sector.
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Is working on its injectable GLP-1 drug, Maritide. The market didn't like its drug data (phase 2 clinical trials) last Monday, and sold shares hard: 20% avg. weight loss for obesity only, and 17% weight loss for obestity and diabetes. Also, Maritiude made users puke if they took high doses, though this is reduced if doses start small and then are increased. Still, the market was not impressed. Also, there exist 2 GLP-1 shots by competitors already. Thirdly, American prefer taking a pill daily (Eli Lilly) than an injection weekly (Amgen). He feels that the market misunderstood the trial results, and does not justify the stock's decline. LLY remains his favourite in GLP-1, but Amgen stock is cheap.
Our PAST TOP PICK with AMGN is progressing well. To remain disciplined, we recommend trailing up the stop (from $260) to $294 at this time.