Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

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.

These 3 Stocks Could be Tomorrow's High-YieldersEnbrel, 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.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.