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Amgen (AMGN) Provides Strong Long-Term Outlook, Shares Up
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Amgen (AMGN - Free Report) announced an attractive outlook for the company’s business through the end of this decade. Amgen estimates its revenues to increase by mid-single-digit percentage points every year till 2030. The adjusted earnings are expected to exhibit a compound annual growth rate in the range of high single-digit to low double-digit percentage points in the same timeframe. The company expects its biosimilar revenues to more than double by 2030 compared with 2021 sales.
The company expects its current portfolio of interesting marketed drugs and novel pipeline candidates with strong potential to drive its revenues during this decade. The biosimilar portfolio is estimated to add significantly to the top line. Loss of exclusivity for one of the leading revenue generators — AbbVie’s (ABBV - Free Report) Humira — in 2023 presents a significant opportunity for Amgen’s biosimilar drug refrencing Humira — Amjevita.
We note that AbbVie has garnered more than $16 billion from the United States in 2021 from the sales of Humira. Several companies can launch their biosimilar products including Amgen’s Amjevita in 2023.
The high-margin novel products along with an efficient capital structure are estimated to improve adjusted margins and earnings significantly till 2030. Moreover, Amgen management plans to return an average of 60% of its adjusted net income to shareholders during this period through dividend payments and share repurchases. Amgen plans to buy back shares worth up to $6 billion in the first quarter of 2022.
Amgen’s strong outlook for the decade seemed attractive to investors. Shares rose 7.8% on Feb 8, following the announcement. So far this year, Amgen’s shares have gained 7.2% against the industry’s decrease of 12.9%.
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Although the company has painted an attractive picture for the long term, the pricing pressure seems to continue and is likely to restrict growth in 2022. The company expects its revenues and adjusted earnings to be in the range of $25.4 billion to $26.5 billion and $17.00 per share to $18.00 per share, respectively. This suggests revenues to be flat at the mid-point of the guided range. The adjusted earnings are expected to be flat to up more than 5% year over year.
Amgen’s pipeline candidates target diverse diseases including lung cancer, cardiovascular diseases and hematology-oncology diseases. These novel candidates are likely to boost the top line going forward, following potential approvals. The company is expected to launch three new drugs in 2022.
Amgen currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector are Vir Biotechnology (VIR - Free Report) and Gamida Cell . While Vir sports a Zacks Rank #1 (Strong Buy), Gamida carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Vir have improved from earnings per share of $4.77 to $6.53 for 2023 over the past 30 days.
Vir delivered an earnings surprise of 12.95%, on average, in the last four quarters.
Gamida’s loss estimates have narrowed from $1.83 to $1.35 for 2022 over the past 30 days.
Gamida delivered an earnings miss of 22.6%, on average, in the last four quarters. Shares of GMDA have gained 21.7% so far this year.
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Amgen (AMGN) Provides Strong Long-Term Outlook, Shares Up
Amgen (AMGN - Free Report) announced an attractive outlook for the company’s business through the end of this decade. Amgen estimates its revenues to increase by mid-single-digit percentage points every year till 2030. The adjusted earnings are expected to exhibit a compound annual growth rate in the range of high single-digit to low double-digit percentage points in the same timeframe. The company expects its biosimilar revenues to more than double by 2030 compared with 2021 sales.
The company expects its current portfolio of interesting marketed drugs and novel pipeline candidates with strong potential to drive its revenues during this decade. The biosimilar portfolio is estimated to add significantly to the top line. Loss of exclusivity for one of the leading revenue generators — AbbVie’s (ABBV - Free Report) Humira — in 2023 presents a significant opportunity for Amgen’s biosimilar drug refrencing Humira — Amjevita.
We note that AbbVie has garnered more than $16 billion from the United States in 2021 from the sales of Humira. Several companies can launch their biosimilar products including Amgen’s Amjevita in 2023.
The high-margin novel products along with an efficient capital structure are estimated to improve adjusted margins and earnings significantly till 2030. Moreover, Amgen management plans to return an average of 60% of its adjusted net income to shareholders during this period through dividend payments and share repurchases. Amgen plans to buy back shares worth up to $6 billion in the first quarter of 2022.
Amgen’s strong outlook for the decade seemed attractive to investors. Shares rose 7.8% on Feb 8, following the announcement. So far this year, Amgen’s shares have gained 7.2% against the industry’s decrease of 12.9%.
Although the company has painted an attractive picture for the long term, the pricing pressure seems to continue and is likely to restrict growth in 2022. The company expects its revenues and adjusted earnings to be in the range of $25.4 billion to $26.5 billion and $17.00 per share to $18.00 per share, respectively. This suggests revenues to be flat at the mid-point of the guided range. The adjusted earnings are expected to be flat to up more than 5% year over year.
Amgen’s pipeline candidates target diverse diseases including lung cancer, cardiovascular diseases and hematology-oncology diseases. These novel candidates are likely to boost the top line going forward, following potential approvals. The company is expected to launch three new drugs in 2022.
Amgen Inc. Price
Amgen Inc. price | Amgen Inc. Quote
Zacks Rank & Stocks to Consider
Amgen currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector are Vir Biotechnology (VIR - Free Report) and Gamida Cell . While Vir sports a Zacks Rank #1 (Strong Buy), Gamida carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Vir have improved from earnings per share of $4.77 to $6.53 for 2023 over the past 30 days.
Vir delivered an earnings surprise of 12.95%, on average, in the last four quarters.
Gamida’s loss estimates have narrowed from $1.83 to $1.35 for 2022 over the past 30 days.
Gamida delivered an earnings miss of 22.6%, on average, in the last four quarters. Shares of GMDA have gained 21.7% so far this year.