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Here's Why Amgen Stock Rose 10.5% in February

By Brian Feroldi - Mar 3, 2017 at 10:20AM

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It was an event-filled month for the biotech giant. Here's a look at the key headlines that drove its share price higher.

What happened

In response to the company reporting a series of positive developments, shares of biotech giant Amgen (AMGN -0.18%) gained 10.5% in February, according to data from S&P Global Market Intelligence.

Pill bottles and stack of money

Image source: Getty Images.

So what

Here's a review of the key events that caused shares to rally:

  • Amgen started the month on a positive note by announcing that its FOURIER trial showed that using Repatha -- the company's new cholesterol-lowering drug -- "significantly" reduced the risk of cardiovascular events in patients with clinically evident atherosclerotic cardiovascular disease.
  • The company reported that its fourth-quarter revenue grew by 8% and that non-GAAP EPS increased by 11%. Both of these figures compared favorably to market watchers' expectations.
  • Amgen announced that the Food and Drug Administration (FDA) approved Parsabiv as a treatment for secondary hyperparathyroidism in adult patients with chronic kidney disease on hemodialysis.
  • The company announced that it successfully submitted a supplemental Biologics License Application to the FDA for Blincyto, the company's treatment for acute lymphoblastic leukemia. Management believes that this additional data support a label expansion claim for the drug. 
  • Amgen announced that the European Commission has approved a new single-dose delivery option of Repatha. This new product combines an automated mini-doser with a pre-filled cartridge, providing patients with a hands-free way to inject themselves.
  • Amgen announced positive results its Phase 3 ENDEAVOR trial, which was a head-to-head study testing its multiple myeloma drug Kyprolis versus Takeda's Velcade. The data showed that using Kyrplois led to a statistically significant improvement in overall survival.

Given the slew of positive updates, it is easy to understand why shares rallied.

Now what

For 2017, management is guiding for revenue to land between $22.3 billion and $23.1 billion, the midpoint of which suggests a 1% decline when compared to 2016. Thankfully, the picture looks a bit brighter on the bottom line. Amgen is guiding for non-GAAP EPS in 2017 to land between $11.80 and $12.60. By contrast, non-GAAP EPS in 2016 was $11.65, so the midpoint of this range represents a 5% jump. Given Amgen's long history of providing conservative guidance, it is possible that management is sandbagging a bit. If true, then buying shares today could prove to be a profitable move.

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Stocks Mentioned

Amgen Inc. Stock Quote
Amgen Inc.
$246.29 (-0.18%) $0.44
Takeda Pharmaceutical Company Limited Stock Quote
Takeda Pharmaceutical Company Limited
$27.86 (-1.61%) $0.46

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