Amgen should Perform Well
over the Long-term

In the recent issue of Value Line’s Market Focus, newsletter, analysts explain the key attributes of Dow Jones index member Amgen (AMGN). The company is a giant in the biotechnology medicines industry. It discovers, develops, manufactures, and markets treatments for serious ailments, using living cells to make them (biotechnology) rather than combining chemicals in a conventional factory. The stock has a market capitalization of about $130 billion and the organization employs 22,000 individuals, notes Richard Gallagher, Associate Director, Value Line Research.

“The biotech medicines company registered solid results in the second quarter. Revenues advanced 5.2%, to $6.52 billion and earnings pushed higher to $4.38 a share, thanks to increased product sales for certain established therapies, including Prolia (osteoporosis) and Repatha (high cholesterol). The biosimilars business performed well as a result of strength in MVASI (metatatic colorectal cancer) and Kanjinti (metastatic breast cancer). All told, demand was solid at home and abroad owing to Amgen’s effective sales teams and distribution partnerships.

The company has a few expansion initiatives that are worth noting. New product launches, most notably LUMAKRAS, a lung cancer drug, offer promise. Amgen’s drug BLINCYTO received regulatory approval in Europe to expand utilization to include pediatric leukemia conditions in another promising growth opportunity. Finally, the creation of the biosimilars unit is proving to be a smart move as it has allowed the company to offer several compelling drugs at more cost-effective price points.

As for the equity, we think it continues to hold some appeal. The company’s stellar balance sheet (Amgen gets our premier rating for Financial Strength: A++) ought to help it withstand any near-term pressures. According to our analysis and proprietary measures, the issue should perform well over the long term. What’s more, income-seeking investors may be drawn to the high-quality stock’s secure payout and above-average dividend yield (3.3%), which is comfortably higher than the Value Line median. We view Amgen as a strong choice for conservative and income-oriented accounts.”

Editor’s Note: Value Line’s Market Focus newsletter provides unbiased insights on investments, the markets and the global economy. Value Line offers a broad array of investment research services. For details visit www.valueline.com.