Amgen, Inc. (AMGN): What’s Its Next Catalyst?

Amgen, Inc. (NASDAQ:AMGN) stock has been on a bit of a roller coaster lately. Shares are up 23% year to date, but 8% off the high set earlier this month before the company reported first-quarter earnings.

It wasn’t pretty
Adjusted earnings per share was up 22% year over year, but the long-term health of a biotech company is always going to be measured in revenue growth rather than earnings growth, which is subject to additional factors.

Earnings in the first quarter were boosted by a tax benefit, which isn’t exactly sustainable as a long-term growth strategy. The earnings-per-share growth was also aided by a buyback that created fewer shares outstanding, which I guess could be duplicated over and over again, but it’s certainly not organic growth.

The top line wasn’t pretty. Revenue was up just 5% year over year. That’s not horrible, but it doesn’t exactly justify the double-digit growth in the price of Amgen, Inc. (NASDAQ:AMGN) stock in just four months.

Anemia drug Aranesp was the big loser, down 10% year over year, and the flat sales of top-selling white-blood-cell booster Nuelasta dragged down the growth posted by bone drugs Xgeva and Prolia, which posted gains of 46% and 61%, respectively.

Enbrel, which the company sells with Pfizer Inc. (NYSE:PFE), also posted a nice gain of 11%. It’s now tied with Neulasta as Amgen, Inc. (NASDAQ:AMGN)’s top-selling drug. It’s amazing that a drug can continue to post double-digit gains nearly 15 years after it was first approved, especially with so many anti-inflammatory drugs approved for treating rheumatoid arthritis and other related indications Enbrel is approved for. AbbVie Inc (NYSE:ABBV)‘s Humira was approved four years later and has surpassed it in sales, but both franchises, as well as Johnson & Johnson (NYSE:JNJ)‘s Remicade, have developed into multibillion-dollar blockbusters. Humira topped $9 billion last year.

Still a biotech
While the price of Amgen, Inc. (NASDAQ:AMGN) stock will mostly be dictated by its current offerings, its pipeline still has some influence. With revenue around $18 billion annually, the addition of another blockbuster would drive sales up about 5%. That’s true organic growth.