Amgen Shares Unfairly Nicked?
We continue to see the company's broad portfolio and newer drugs as providing a wide economic moat and a buffer to biosimilar threats to the older Enbrel and Neulasta franchises.
We think Repatha has $4 billion in peak sales potential, but we don’t model a significant ramp in sales until 2018. We think stronger uptake will follow guideline and prescribing label changes (which should push payers to open access), as well as new risk-sharing contracts with payers (which will likely imply a lower net price). Our pricing estimates for Repatha fit well with the value assessment of the drug and the potential impact of risk-sharing contracts. Amgen estimates the value of Repatha at $7,700-$15,000 per year depending a patient’s risk level, and based on data presented at the meeting, Repatha net prices today appear to already be below $10,000. Following this data, Amgen hopes that payers will expand access and reduce the hurdles that have been preventing the majority of patients with prescriptions from initiating therapy, and it plans to offer an option that would provide a refund if a patient has a stroke or heart attack while taking Repatha (this is only expected to lower net pricing if the drug does not perform as it has in clinical trials).
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