Amgen in Collaboration With Humana for Patients' Benefit
- By Alberto Abaterusso
Amgen ( AMGN ) has informed the market through a news release published on its website that it will collaborate with Humana ( HUM ) to uncover opportunities for the improvement of patient health outcomes and for the improvement of the health care system's efficiency.
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The intrinsic value of AMGN
This will be done by researchers who will compare and observe data collected on patients through wearable technologies with data available from real world sources.
The collaboration has also been set up to collect additional data on the most serious conditions through clinical trials in which the patients will be enrolled.
These serious conditions will also include illnesses such as cardiovascular disease, neurological disorders as well as osteoporosis, inflammatory diseases and even the life-threatening ones like cancer.
The Amgen-Humana partnership agreement covers only six projects that are either underway or are being planned, but under the terms of this partnership agreement Amgen expects to collaborate with Humana on more projects.
The companies will also have a deep focus into specific therapeutic areas, which will, for example, include the determination of osteoporotic fractures' burden or the understanding of wearable technology's impact on the adherence to medical therapies for inflammatory diseases.
Amgen is trading at $167.81 per share with a market capitalization of $122.45 billion and an enterprise value of $118.28 billion. The company has a price-book (P/B) ratio of 3.86, a price-earnings (P/E) ratio of 15.28 and a price-sales (P/S) ratio of 5.42.
The forward P/E ratio for Amgen is 13.66 that, when multiplied by earnings per share (EPS) of $12.57 as forecasted by analysts for full fiscal 2017, yields to a value of $171.41 per share. The analysts' average target price is $187.21 per share, which represents an 11.6% upside from the current market value of this health care stock. The recommendation rating is 2.4 out of 5.
Amgen distributes an annual dividend of $4.60 to its shareholders through quarterly payments of $1.15 for a dividend yield of 2.68%.
Humana is trading at $247.02 per share with a market capitalization of $35.79 billion and an enterprise value of $24.63 billion. The company has a P/B ratio of 3.27, a P/S ratio of 0.69, a P/E ratio of 20.23 and a forward P/E ratio of 21.93. When the latter is multiplied by the average EPS of $11.55, as forecasted by analysts for full fiscal 2017, it yields to a value of $253.29. The analysts' average target price is $259.06 per share, and the recommendation rating is 1.9 out of 5.
Humana distributes an annual dividend of $1.38 to its shareholders for a dividend yield of 0.56%.
Disclosure: I have no positions in any stock mentioned in this article.
This article first appeared on GuruFocus.
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The intrinsic value of AMGN
