Amgen Gains as Cancer Drug ‘Steals the Show’ From Legacy Woe
(Bloomberg) -- Shares of Amgen Inc. rose as much as 5.2% on Wednesday after early results from an experimental therapy showed promise in colon cancer and drew attention away from earnings and fears about the company’s aging portfolio.
“AMG510 steals the show,” RBC analyst Kennen MacKay wrote in a note to clients while still cautioning investors on the company’s base business. Amgen plans to start a registrational study of the cancer medicine this year.
“The New Amgen -- flat revenue, promising pipeline, nervous investors,” SVB Leerink analyst Geoffrey Porges quipped. Shares are on track to close with biggest gain since December 2018.
RBC, Kennen MacKay
Second-quarter beat and raise “are likely to be overshadowed by the base business (especially Enbrel) driving the beat.”
“Several bright spots do emerge,” MacKay wrote, “but we see Neulasta & Sensipar’s continued declines vs respective biosimilars/generics as well as the lingering Enbrel litigation continuing to overhang share performance despite the strong operational performance in Q2.”
Rates Amgen sector perform.
SVB Leerink, Geoffrey Porges
Second-quarter results “slightly beat consensus” despite a 3% decline in sales.
“Most of the questions on the call concerned the company’s emerging pipeline, mainly their oncology products, where the company upgraded the outcome for one colorectal cancer patient treated with their KRAS G12C inhibitor, AMG 510, from stable disease to response.”
“Amgen’s stock is likely to remain somewhat range-bound near term, as the specter of continued rapid erosion of their growth factor brands, and the legal risk facing Enbrel, act as brakes on investor interest and enthusiasm, despite the pipeline’s potential.”
Reiterates Amgen at market perform.
Cowen, Yaron Werber
Amgen’s “pipeline is progressing with AMG510” Werber said. “The fact that the drug is now also showing initial responses in GI tumors in a handful of initial patients addresses one of the lingering concerns about the data at ASCO where there were no response in GI at that time as patients were on lower doses.”
While Sensipar and Neulasta face competitive concerns. “The biosimilar late-stage franchise is advancing nicely. Overall good results despite headwinds to legacy business.”
Rates Amgen outperform, price target raised to $231 from $229.
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