Amgen, Inc. (AMGN)’s Future Is Brighter Than You Might Think

The result? deCode found genetic risk factors for dozens of diseases that have spurred a modern-day gold rush into population genetics. One such highly targeted therapy developed with genetic analysis was Herceptin from Roche Holding Ltd. (ADR) (PINK:RHHBY), which generated $6.4 billion in 2012 sales. Essentially, deCODE took the first step in developing one of the Holy Grails of health care: individualized medicine.

Now all of those innovative analysis techniques belong to Amgen, which hopes to use it to take some of the guesswork out of biologics development. Don’t get me wrong — all companies developing biologics today understand the importance of genetics. Amgen has just made one of the more aggressive moves to ensure it remains a top focus.

Biologics manufacturing
Gaining approval for a biologic involves a bit more paperwork than a small molecule. Even biosimilars — the generic versions of a biologic — take longer to get a regulatory nod than small-molecule generics do. What’s the holdup? Biologics are approved on data submitted from trials and manufacturing facilities.

Biomanufacturing facilities can cost a pretty penny, too. Genzyme recently built a facility for $175 million, or $22,000 per liter of bioreactor. Investments in that neighborhood keep smaller companies from crowding the industry, prices high, and generic competition low. Nonetheless, permanent investments in biomanufacturing are a great way to gauge the growth of any pipeline.

Amgen recently announced plans to build the world’s newest biomanufacturing facility in Singapore that will cost $200 million, likely pegging it near $20,000 per liter of bioreactor as well. The facility will be used exclusively for monoclonal antibodies, which are quickly outgrowing the company’s current production capacity.

Amgen’s best-selling antibodies — Vectibix, Prolia, and XGEVA — brought in $1.58 billion in sales last year and are expected to breach $3 billion in the next few years. The facility will also come in handy for its newly planned portfolio of six biosimilars, which the company believes represent a multibillion-dollar opportunity.

Foolish bottom line
Investors looking to buy into the future of biotechnology would be making a grave mistake by glossing over Amgen. The company may be considered part of the “old guard,” but it hasn’t lost its ability to innovate or its focus on the future of medicine.

The article Amgen’s Future Is Brighter Than You Might Think originally appeared on and is written by Maxx Chatsko.

Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio or follow him on Twitter, @BlacknGoldFool, to keep up with his writing on energy, bioprocessing, and emerging technologies.The Motley Fool recommends Gilead Sciences (NASDAQ:GILD).

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