Morningstar

Amgen Undervalued After In-Line 1st Quarter

The wide-moat drugmaker's cash pile can support acquisitions to bolster growth in the face of biosimilar and branded pressure.

Securities In This Article
Amgen Inc
(AMGN)

We’re maintaining our $198 per share fair value estimate and wide moat rating for

Amgen is juggling several different types of uncertainties in 2018, from generic and biosimilar competition to drug reimbursement negotiations and business development strategy. Headwinds include the timing of U.S. Neulasta competition (we anticipate the second half of 2018, from Mylan), and U.S. Sensipar generic competition (we assume mid-2018). In the long run, however, Amgen has an interesting mix of drug candidates in less traditional areas of focus (cardiology, bone health) as well as oncology (one of the few drug developers who is testing both bispecific and CAR-T cell therapy approaches). While these programs continue to pass through clinical studies, Amgen will need support from continued growth of Prolia as well as a strong sales ramp for cholesterol-lowering drug Repatha (which has a new cardiovascular outcomes label in the U.S.) and migraine drug Aimovig (poised to launch following FDA approval in May).

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About the Author

Karen Andersen, CFA

Strategist
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Karen Andersen, CFA, is a sector director, AM Healthcare, for Morningstar*. In addition to leading the sector team, she covers biopharma firms in the US and Europe, focusing mostly on large-cap firms with foundations in biologic or gene-based medicines.

Before joining Morningstar in 2005, Andersen received a master’s degree in business administration from the Jones Graduate School of Business at Rice University, where she served as senior healthcare analyst for the M.A. Wright Fund and earned the distinction of Jones Scholar. She also holds the Chartered Financial Analyst® designation.

She ranked first in the biotechnology industry, and had the highest score overall, in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

Andersen holds a bachelor’s degree in biochemistry from Rice University, where she graduated magna cum laude. She is also a member of Phi Beta Kappa. She has scientific research experience in academia at both Rice University and the University of Queensland in Australia. She also worked in the healthcare industry, both at genetic testing firm Integrated Genetics (now part of LabCorp) and as a research assistant at Lexicon Genetics (now Lexicon Pharmaceuticals).

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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