Why You Shouldn't Overlook Amgen, Inc.

Amgen, Inc.'s (NASDAQ: AMGN) recent results were generally in line with expectations but still should be of major interest to investors.

Feb 9, 2014 at 11:00PM

Fourth-quarter results released by Amgen (NASDAQ:AMGN) were roughly in line with Wall Street estimates. So, while shares didn't react particularly strongly (and have pretty much tracked the wider Nasdaq index since their release), there were a number of positives in the results that investors should be happy to hear about.

Fourth quarter 2013
Indeed, total revenues in the fourth quarter increased by 13% to just over $5 billion, with product sales growing by 11%. This was despite the end of the Enbrel profit share, making the top-line figures arguably more impressive than at first glance. Furthermore, adjusted earnings per share grew by 30% to $1.82 in the fourth quarter, although a lower tax rate and the inclusion of Onyx Pharmaceuticals (which was acquired in October) help to sweeten this figure somewhat, while increased research and development expenses pinned back earnings growth to an extent.

Product sales growth
Key products that contributed to fourth-quarter sales growth included combined Neulasta and Neupogen sales, which increased by 8%, and Xgeva sales, which increased by 33% in the fourth quarter (versus the fourth quarter of 2012) as a result of higher unit demand. This makes Xgeva the seventh best-selling drug in Amgen's stable.

Interestingly, most of the drugs that experienced significantly higher sales volumes in the quarter were a result of higher demand, as opposed to higher prices. This could be good news for Amgen's medium- to long-term outlook, as it isn't generating higher sales simply from raising prices. Therefore, it could be argued that the current levels of sales growth could be more sustainable than if they had been a result of simply increasing prices.

The pipeline
Looking ahead, Amgen has multiple projected milestones for its late-stage pipeline in 2014. Phase 3 data from Evolocumab, whose lead indication is Dyslipidemia, is expected in Q1 2014, while a U.S. filing for chronic heart-failure drug, Ivabradine, is expected this side of July. In all, there are six different drugs for which phase 3 data is due to be received in 2014, with a phase 2 trial also set to be completed for Blinatumomab, whose lead indication is relapsed/refractory acute lymphoblastic leukaemia, in the first half of the year, too.

An exciting sector?
Amgen's results paint an exciting picture for drug development in 2014, with the company having a relatively strong pipeline -- especially in later-stage assets. As sector peer Alexion (NASDAQ:ALXN) reported in its fourth-quarter update, the biotechnology space seems to be gathering momentum in 2014.

Indeed, Alexion is seeking further marketing approvals, particularly for its Soliris drug, which was originally approved in 2007 for the treatment of a life-threatening condition called paroxysmal nocturnal hemoglobinuria. These additional approvals (which include the use of Soliris as an orphan treatment for the prevention of delayed graft function -- granted just last month) caused Alexion to increase its own sales guidance for 2014.

In addition, sector peer Biogen (NASDAQ:BIIB) has received European Commission aproval for its new multiple sclerosis drug, Tecfidera, and will launch the product in H1 2014. The potential in Europe for the drug seems vast, since it has become the most prescribed pill for the treatment of multiple sclerosis in the U.S. since Biogen gained approval for it in 2013.

Amgen in 2014
Overall, Amgen delivered an impressive set of fourth-quarter results, where it posted double-digit sales and profit growth. This, allied to the relative strength of its product pipeline and multiple regulatory milestones expected this year, means that 2014 could be another exciting year for investors.

Two game-changing biotechs
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In The Motley Fool's brand-new free report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that Big Pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.

Peter Stephens and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information