On September 22, Amgen Inc. (NASDAQ:AMGN) announced positive topline Phase 3 results for dazodalibep in systemic Sjögren’s disease. The trial met its primary endpoint, demonstrating statistically significant and clinically meaningful improvements in systemic disease activity. Following the announcement, Citi reaffirmed a Neutral rating and $405 price target on Amgen.
While Citi noted that the results reduce clinical risk for a “potentially underappreciated I&I asset,” the firm highlighted that critical details were omitted from the release. Until full data are presented, Citi argues that the magnitude of efficacy and overall competitive profile “remain open questions.”
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Bull Case: De-Risking Pipeline Assets to Drive Long-Term Commercial Growth
The primary bullish thesis rests on Amgen Inc.’s ability to de-risk its Inflammation & Immunology (I&I) pipeline, creating new commercial drivers to augment its core portfolio. In Q2 2026, Amgen demonstrated robust operational execution, with total revenues climbing 10% year-over-year to $10.1 billion. This was anchored by six key growth drivers expanding 26%, including TEZSPIRE (+42% to $486M) and UPLIZNA (+90% to $335M), alongside commercial powerhouses like Repatha (+37% to $953M).
Furthermore, AMGN’s strong cash generation, generating $3.5 billion in Q2 free cash flow, provides substantial liquidity to fund R&D and Phase 3 advancements. If full data confirm strong efficacy for dazodalibep, the asset could address a major unmet market with no approved disease-modifying therapies, bolstering revenue growth alongside novel oncology assets like IMDELLTRA (+115% to $288M).
Bear Case: Unanswered Efficacy Data and Looming Biosimilar Headwinds
Conversely, the bear case centers on execution risk and accelerating biosimilar erosion in legacy products. Citi’s cautious stance underlines the risk that dazodalibep’s ultimate commercial market share could be limited if detailed data fail to show superiority against competing therapies. Without full clinical granularity, investors cannot evaluate how the drug will stack up commercially.
This pipeline uncertainty comes at a delicate time. In Q2 2026, mature therapies faced sharp declines from biosimilar entry: Prolia sales fell 32% to $759 million, and XGEVA dropped 34% to $352 million. Additionally, pricing pressures impacted Enbrel (-4% to $580M) due to Medicare Part D price setting. If dazodalibep underwhelms in efficacy or faces delays, Amgen may struggle to replace the substantial cash flows lost from its legacy franchises.
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Conclusion
The Phase 3 trial victory for dazodalibep confirms pipeline progress in a high-need autoimmune indication. However, as Citi noted, the true commercial potential remains an open question until comprehensive data are disclosed. With Q2 2026 top-line growth of 10% offset by steep biosimilar declines in Prolia and XGEVA, Amgen Inc.’s investment case hinges on whether its next-generation pipeline can execute swiftly enough to replace legacy headwinds.
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