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Amgen Stock Up in a Year on Pipeline & Biosimilar Progress

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Shares of Amgen Inc. AMGN have risen 24% in the past year against no movement registered by the industry during this period.

Here we discuss the key reasons for the same.

Pipeline & Regulatory Successes:  In 2019, Amgen made rapid progress with its pipeline and line extensions. Key FDA approvals for new drugs were that of Evenity in April for osteoporosis in postmenopausal women at increased risk for fracture and CGRP antibody Aimovig/erenumab for prevention of migraine in late 2018. Amgen also gained approval for several line extensions this year for drugs like Nplate and Blincyto.

Meanwhile, early clinical data on a key candidate, AMG-510, Amgen’s KRAS inhibitor for solid tumor, showed encouraging anti-tumor activity in patients with locally-advanced or metastatic KRASG12C mutant solid tumors like non-small cell lung cancer (NSCLC), colorectal cancer (CRC) and appendiceal cancer. AMG-510 is part of Amgen’s intriguing lineup of early and mid-stage programs, which can contribute to growth in the long term

Accretive Acquisition of Celgene’s Otezla: We are pleased with Amgen’s efforts to drive growth and boost its pipeline through deals and acquisitions. The trend continued in 2019. In November, Amgen acquired global commercial rights to Celgene’s (now a part of Bristol-Myers) blockbuster psoriasis drug, Otezla. The acquisition is expected to significantly strengthen its inflammation portfolio and boost long-term growth.

In October, Amgen announced a strategic alliance with China’s leading pharma company BeiGene to expand its oncology footprint in the country

Significant Progress in Biosimilars Portfolio/Pipeline: Amgen also delivered on its biosimilars pipeline. Amgen achieved several important milestones with its biosimilars portfolio in 2018/2019 including its first two launches in EU — Amjevita (biosimilar of AbbVie’s [ABBV] Humira) and Kanjinti (biosimilar of Roche’s Herceptin) as well as United States —  Kanjinti and Mvasi (biosimilar of Roche’s Avastin). Its biosimilars business is already annualizing at approximately $700 million in sales.

In the United States, Amjevita is expected to be launched in 2023. A biosimilar version of Johnson and Johnson/Merck’s MRK Remicade (ABP 710) was approved by the FDA in December 2019 while it is under review in the EU. A biosimilar of Alexion’s Soliris (ABP 959) is in late state development. Amgen expects to launch additional biosimilars in 2020 across multiple geographies. Amgen has a collaboration agreement with Allergan AGN for the worldwide development and commercialization of four oncology antibody biosimilars including Kanjinti and Mvasi. Amgen has also tied up with Daiichi Sankyo for the commercialization of nine biosimilars in Japan.

Conclusion

Amgen has its share of challenges in the form of biosimilar erosion of its legacy products, lower sales of key drugs like Repatha and pipeline setbacks. However, higher sales of growth products like Prolia, Xgeva, Blincyto and others, increasing contribution from recently launched products including Aimovig and Evenity and biosimilars, international expansion, cost savings and pipeline progress should keep the stock afloat in 2020.

Amgen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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