What happened

Biotech heavyweight Amgen (NASDAQ:AMGN) saw its shares gain a healthy 12.2% over the course of August, according to data from S&P Global Market Intelligence. What triggered this double-digit move higher?

On Aug. 9, the U.S. District Court for the District of New Jersey upheld the two patents protecting the anti-inflammatory medicine Enbrel from biosimilar competition until 2029. Novartis' (NYSE:NVS) Sandoz division is attempting to invalidate the patents in order to launch its Enbrel biosimilar, known as Erelzi. Erelzi was approved three years ago by the Food and Drug Administration (FDA), but it has yet to launch because it infringes on those two key patents.  

A researcher in a lab coat pointing to a section of DNA.

Image Source: Getty Images.

So what

Enbrel has long been Amgen's best-selling medicine. So it's not surprising that investors cheered this verdict last month. Now, Novartis does reportedly plan on challenging the court's ruling, but as things stand now, Amgen appears to have the upper hand in this long-running legal battle. That's key because it means Amgen's biggest cash cow should remain a key contributor to the biotech's top line for years to come.   

Now what

In addition to this major legal win, Amgen also acquired Celgene's anti-inflammatory medicine Otezla for a whopping $13.4 billion last month, and it recently reported encouraging trial results for the novel anti-cancer treatment AMG 510 as well. With all these positive developments, Amgen has significantly improved its long-term outlook over the past few weeks. In fact, the biotech is expected to post a noteworthy 9.9% increase in annual sales next year, thanks largely to this Otezla acquisition. That being the case, this blue-chip biotech stock arguably comes across as an outstanding buy right now.