Patient Amgen Inc. (NASDAQ:AMGN) shareholders have seen the stock quadruple in price over the past decade, plus they've enjoyed one of the fastest-growing dividends in biopharma. Now that the company's launched a new migraine headache drug, investors are wondering if the former highflier can put on another memorable performance.

Amgen has some aging blockbuster injections that are beginning to buckle under competitive pressure that will make a repeat challenging. Let's weigh the arguments for and against the big biotech to see if the stock is a buy now.

Three scientists examining a test tube.

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The case for Amgen Inc.

Biosimilar competition abroad has hammered international sales of the company's former top drug, Enbrel, down to just $55 million in the first quarter. In the U.S., though, Enbrel is on pace to deliver $4.2 billion in sales this year and the company expects it to maintain exclusivity through 2029.

The company's aging inflammation drug won't regain its former glory, but Amgen's bone health franchise is helping to offset the losses. In the first quarter, sales of denosumab, marketed as Xgeva to cancer patients and Prolia to women with osteoporosis, rose 13.5% to an annualized $3.8 billion.

In a few more quarters we should also know if its new migraine headache prevention medicine, Aimovig, can provide some buoyancy for the company's stagnating top line. Marketed in partnership with Novartis (NYSE:NVS), it's the first new preventative treatment for the debilitating headaches in decades. In the U.S. alone, an estimated 10 million Americans qualify for migraine preventatives and they're expected to help drive annual Aimovig sales past $1.2 billion by 2022.

Amgen also has an enormous capacity to fill its pipeline with tomorrow's blockbusters. The company finished March with $32 billion in cash, cash equivalents, and marketable securities, plus strong cash flows mean it could probably take on $33 billion in debt if necessary.

Over the past 12 months Amgen's profitable operations generated a stunning $10.9 billion in free cash flow, a profitability metric that essentially measures profits available to invest, pay off debts, or distribute. Income investors love this stock because it often chooses to distribute those profits in the form of a dividend, which has surged 181% over the past five years. Starting with a forward yield of 2.9% at recent prices, a repeat performance could supercharge your retirement portfolio.

Lab worker examining a sample vial.

Image source: Getty Images.

The case against Amgen Inc.

Perhaps the hardest thing about being an Amgen shareholder over the past couple years has been watching the top line stagnate. It doesn't look like revenue is about to return to growth, either. Management expects total revenue for 2018 to reach, or fall slightly below last year's results, and the average Wall Street analyst following the stock expects a slight contraction again in 2019.

A big potential growth driver, Repatha hit another stumbling block recently. This cholesterol-lowering therapy was expected to deliver several billion annually by now, but it finished the first quarter on pace to reach just $492 million this year and further growth could be difficult. One of the largest pharmacy benefits managers in the U.S., Express Scripts, recently agreed to back a competing drug at Amgen's expense.

The company has plenty of cash to buy new drug candidates, but its late-stage pipeline at the moment is downright barren. Amgen has full ownership of exactly zero novel new drug candidates in phase 3 clinical trials right now.

A buy now?

I wouldn't let go of Amgen shares, but it might not be a great time to add this well-run biotech to your portfolio. Recently, the stock has been trading at 13.5 times this year's earnings estimates, which seems awfully high for a company that saw four of its top seven products lose ground in the first quarter.

Since Amgen's top line appears doomed to flatline, or slip, in the years ahead, boosting efficiency will be the only lever management can pull to raise earnings. With an already-stellar 44% operating margin over the past year, there isn't a lot of room for improvement. I don't think you'll lose money with this stock, but you can probably find better options out there right now.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.