What to Watch at Biogen, Amgen, and Omeros This Morning

Biogen, Amgen, and Omeros could all loom large in health care headlines this morning. Here's why.

Jan 29, 2014 at 9:33AM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good morning, fellow Foolish investors! Let's take a look at three stocks -- Biogen Idec (NASDAQ:BIIB), Amgen (NASDAQ:AMGN), and Omeros (NASDAQ:OMER) -- which could loom large in health care headlines this morning.

Biogen's revenue climbs by 26% in 2013 on strong MS franchise sales
First and foremost, Biogen just reported its fourth quarter and full year earnings this morning. For fiscal 2013, Biogen's revenue rose 26% year-over-year to $6.9 billion, while its GAAP adjusted diluted earnings per share rose 36% to $7.81 per share. Both its fourth quarter and full year earnings exceeded Wall Street estimates.

Sales of Avonex, Biogen's top selling multiple sclerosis (MS) treatment, rose 3% year-over-year to $3.0 billion in 2013. Sales of Tysabri, its MS and Crohn's disease treatment, surged 34% to $1.5 billion thanks to the acquisition of its complete rights from Elan (now part of Perrigo) during the second quarter of 2013.

Biogen's oral MS drug Tecfidera, pegged as a future blockbuster with peak sales estimates of $3.3 billion, finished its first year on the market with sales of $876 million.

Although Biogen's main products were firing on all cylinders, its earnings outlook for the coming year was a bit light. Biogen expects to earn $11.00 to $11.20 per share for fiscal 2014, missing the consensus estimate of $11.63. Revenue is expected to rise 22% to 25%.

Investors are reacting that conservative outlook -- shares of Biogen are down more than 2% in pre-market trading at the time of this writing.

Amgen's evolocumab meets its co-primary endpoints during a phase 3 trial
Yesterday, Amgen announced that a Phase 3 trial of evolocumab (also known as AMG-145) in combination with a statin therapy for high cholesterol had met its co-primary endpoints.

The study, known as LAPLACE-2, tested the safety, tolerability, and efficacy of evolocumab combined with a statin therapy compared to a placebo and ezetimibe in 1,896 patients with high cholesterol levels. The positive results indicate that evolocumab shows considerable promise as a treatment for patients who do not respond to high doses of statins alone.

Evolocumab belongs to a new class of drugs known as PCSK9 inhibitors, which are believed to be the next generation of cholesterol drugs. PCSK9 inhibitors work differently from statins, which inhibit the production of a liver enzyme known as HMG-CoA.

While statins inhibit the production of "bad" LDL cholesterol by inhibiting that enzyme, it inadvertently stimulates the production of another enzyme, PCSK9, which degrades the performance of the LDL receptors responsible for maintaining LDL levels. Evolocumab directly inhibits the production of PCSK9 instead.

To date, no PCSK9 inhibitors have been approved, but alirocumab, a similar product from Sanofi and Regeneron, is racing against evolocumab to reach the market first.

If approved, analysts expect evolocumab to generate peak sales of $4 billion -- which would go a long way toward diversifying Amgen's portfolio away from its top drug Enbrel, which generated $4.2 billion in sales last year.

Omeros poised to surge on positive phase 2a results for OMS824
Last but not last, Omeros just reported positive results from a phase 2a clinical trial of OMS824, an inhibitor of PDE10, an enzyme implicated in brain diseases such as Huntington's disease and schizophrenia. Shares of Omeros are surging by the double-digits in pre-market trading as a result.

The OMS824 trial consisted of 33 patients, and the results showed that the drug was well tolerated with limited adverse effects. The company has stated the trial results indicate that OMS824 has a bright future as both a monotherapy and as an adjunctive therapy in combination with approved antipsychotics. Full efficacy data could not be drawn yet, due to the small size of the trial, but Omeros stated that the data suggests the continuing development of the drug for schizophrenia and other neuropsychiatric conditions.

Analysts believe that OMS824 has peak sales potential of $1 billion -- which would be a huge boost for Omeros, which has no marketed products and only reported $6 million in revenue in 2012.

Investors should remember that OMS824 isn't the company's most advanced drug candidate. Omeros has already sent in a new drug application and a market authorization application for OMS302, a treatment for ophthalmological procedures. It has also completed a phase 3 trial for OMS103HP, a treatment for arthroscopy and menisectomy procedures.

However, neither OMS302 nor OMS103HP matches the blockbuster potential of OMS824 -- the two drugs combined have peak sales potential of just over $1 billion.

Another top stock to watch
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

 

Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers