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Why Amgen (AMGN) Stock Rallied After Q4 Earnings Release?
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Biotech major, Amgen, Inc.’s (AMGN - Free Report) shares have risen12.1% since it reported better-than-expected fourth quarter results on Feb 2.
The increase also compares favorably with the 6.3% rise registered by the Zacks classified Biomed/Genetics industry in the period.
Q4 Earnings Discussion
Both earnings and sales beat expectations in the quarter. While earnings per share rose 11% year over year, sales increased 3.9% driven by higher product sales.
Total product revenue rose 6% as strong performance of Enbrel and Prolia as well as newer drugs like Repatha and Kyprolis was offset by lower sales of established brands like Epogen, Neulasta and Neupogen.
Other Growth Catalysts
Positive results from the Repatha cardiovascular outcomes trial and Parsabiv’s FDA approval - both announced in February - also pushed up the share price.
Positive Data from Repatha Outcomes Study
Concurrent with the earnings release, Amgen announced that its PCSK9 inhibitor, Repatha met the primary composite endpoint as well as the key secondary endpoints in a phase III cardiovascular outcomes study (FOURIER). The highly awaited top-line data from the study showed that Repatha was effective in reducing the risk of cardiovascular events (like cardiovascular death, non-fatal myocardial infarction (MI), non-fatal stroke and others) in patients with clinically evident atherosclerotic cardiovascular disease. Importantly, there was no new safety finding in the trial. However, not much detail was given as the company will present detailed data from the study at the 2017 American College of Cardiology conference to be held in March.
Uptake of Repatha, which gained FDA approval in Aug 2015, has not been very encouraging so far. The commercial success of Repatha depends on the outcomes data, which looks good so far.
Note that 2017 is proving to be a good year for Repatha. In Jan 2017, Amgen announced that the U.S. District Court in Delaware granted it permanent injunction against infringement by Sanofi (SNY - Free Report) and Regeneron Pharmaceuticals, Inc. (REGN - Free Report) for two patents owned by Amgen for Repatha. The decision bans Sanofi and Regeneron from selling Praluent during the term of the two patents, which describe and claim monoclonal antibodies of PCSK9. Regeneron and Sanofi, however, appealed against the ruling in a higher court. The appeals court granted their request to stay (suspend) the permanent injunction, pending the outcome of the appeal. Praluent’s ban could in turn drive sales of Repatha.
Parsabiv Approval
In Feb, the FDA has approved Amgen’s Parsabiv (etelcalcetide) for the treatment of secondary hyperparathyroidism (sHPT) in adult patients with chronic kidney disease (CKD) on hemodialysis. Parsabiv is the first therapy in 12 years to be approved for this condition. Parsabiv was approved in the EU in November last year.
Conclusion
While Amgen faces its own share of headwinds such as biosimilar competition and slowdown in mature products, contribution from new product launches should be meaningful and provide a boost. Amgen’s growth products – Prolia, Xgeva, Vectibix, Nplate and Sensipar – are all performing well. Sales of other newer products like Kyprolis, Repatha and Blincyto are expected to pick up if approved for further label expansions.
The company’s restructuring plan should streamline it and increase cost efficiency. Amgen is also progressing with its pipeline, given quite a few regulatory and data updates scheduled for the coming quarters. Amgen also has several biosimilars in its pipelineincluding three oncology antibody biosimilar medicinesbeing developed in partnership with Allergan plc .
In fact, Amgen’s shares surpassed that of the industry in the past one yearas well. Amgen’s shares rose 23.8% in the past one year, comparing favorably with a decline of 0.8% for the Zacks classified Biomed/Genetics industry.
More Stock News: 8 Companies Verge on Apple-Like Run
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Why Amgen (AMGN) Stock Rallied After Q4 Earnings Release?
Biotech major, Amgen, Inc.’s (AMGN - Free Report) shares have risen12.1% since it reported better-than-expected fourth quarter results on Feb 2.
The increase also compares favorably with the 6.3% rise registered by the Zacks classified Biomed/Genetics industry in the period.
Q4 Earnings Discussion
Both earnings and sales beat expectations in the quarter. While earnings per share rose 11% year over year, sales increased 3.9% driven by higher product sales.
Total product revenue rose 6% as strong performance of Enbrel and Prolia as well as newer drugs like Repatha and Kyprolis was offset by lower sales of established brands like Epogen, Neulasta and Neupogen.
Other Growth Catalysts
Positive results from the Repatha cardiovascular outcomes trial and Parsabiv’s FDA approval - both announced in February - also pushed up the share price.
Positive Data from Repatha Outcomes Study
Concurrent with the earnings release, Amgen announced that its PCSK9 inhibitor, Repatha met the primary composite endpoint as well as the key secondary endpoints in a phase III cardiovascular outcomes study (FOURIER). The highly awaited top-line data from the study showed that Repatha was effective in reducing the risk of cardiovascular events (like cardiovascular death, non-fatal myocardial infarction (MI), non-fatal stroke and others) in patients with clinically evident atherosclerotic cardiovascular disease. Importantly, there was no new safety finding in the trial. However, not much detail was given as the company will present detailed data from the study at the 2017 American College of Cardiology conference to be held in March.
Uptake of Repatha, which gained FDA approval in Aug 2015, has not been very encouraging so far. The commercial success of Repatha depends on the outcomes data, which looks good so far.
Note that 2017 is proving to be a good year for Repatha. In Jan 2017, Amgen announced that the U.S. District Court in Delaware granted it permanent injunction against infringement by Sanofi (SNY - Free Report) and Regeneron Pharmaceuticals, Inc. (REGN - Free Report) for two patents owned by Amgen for Repatha. The decision bans Sanofi and Regeneron from selling Praluent during the term of the two patents, which describe and claim monoclonal antibodies of PCSK9. Regeneron and Sanofi, however, appealed against the ruling in a higher court. The appeals court granted their request to stay (suspend) the permanent injunction, pending the outcome of the appeal. Praluent’s ban could in turn drive sales of Repatha.
Parsabiv Approval
In Feb, the FDA has approved Amgen’s Parsabiv (etelcalcetide) for the treatment of secondary hyperparathyroidism (sHPT) in adult patients with chronic kidney disease (CKD) on hemodialysis. Parsabiv is the first therapy in 12 years to be approved for this condition. Parsabiv was approved in the EU in November last year.
Conclusion
While Amgen faces its own share of headwinds such as biosimilar competition and slowdown in mature products, contribution from new product launches should be meaningful and provide a boost. Amgen’s growth products – Prolia, Xgeva, Vectibix, Nplate and Sensipar – are all performing well. Sales of other newer products like Kyprolis, Repatha and Blincyto are expected to pick up if approved for further label expansions.
The company’s restructuring plan should streamline it and increase cost efficiency. Amgen is also progressing with its pipeline, given quite a few regulatory and data updates scheduled for the coming quarters. Amgen also has several biosimilars in its pipelineincluding three oncology antibody biosimilar medicinesbeing developed in partnership with Allergan plc .
In fact, Amgen’s shares surpassed that of the industry in the past one yearas well. Amgen’s shares rose 23.8% in the past one year, comparing favorably with a decline of 0.8% for the Zacks classified Biomed/Genetics industry.
Amgen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>