Amgen Inc. (AMGN)

Some of their drugs offer more growth and they could enter the weight-loss drug race.

They have 10 blockbuster drugs, but their growth is slower than some peers. They had some drug trial misses recently, and EPS growth is around 3-5%. But given its drug diversity, AMGN is the safer of the large biotechs. Have a good oncology drug pipeline. Good to own, but not explosive growth ahead.

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.

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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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.

Phase 2 drug in the GLP-1 space -- not as mature as LLY's drug, but you don't pay as much for this company either. Trades ~14x earnings, compared to 50x for LLY. And that's more his style of investing.

Diversity is good in the bio pharma space. It is a fully diversified large cap and he would have it as a core holding.

A dividend play for 2025 at 3.65%. Not sexy, but consistently generates earnings, free cash flow, and each year grows its dividend. Offers growth wealth generation over time.

He still believes in their key drug, Repatha. His concern lies with their weight-loss drug and their disappointing results.

Today's downgraded doesn't bother him. These calls go back and forth often. Their weight-loss drug could add $10 billion revenues. A good time to own this.

They just bought Horizon Therapeutics, a growth engine, and have a weight-loss drug in phase 2 trials that is promising facing a huge market. They trade at a decent PE and enjoy good growth from their core drugs.

He prefers Amgen, because their weight-loss drug is under trial and not priced into the stock yet. And it trades at a lower PE than these peers.

Trades at a healthy 15x earnings and 66% gross margin (56% in the sector). It pays a 3% dividend. They just bought Horizon Therapeutics which adds growth. Their early-stage obesity drug shows great promise in a $100 billion potential market.