Biotechnology titan and Rule Maker company Amgen (NASDAQ:AMGN) posted another quarter of double-digit sales and earnings growth. If it keeps up this type of performance, the stock price may actually follow someday.

First-quarter results released yesterday after market close demonstrated that Amgen's drugs for stimulating white and red blood cell production are alive and well. The compound names have also grown, as Amgen has been able to expand the patent expiration horizon on its original Neupogen (white blood cells) and Epogen (red blood cells) by introducing similar yet improved versions -- Neulasta and Aranesp, respectively.

Total product sales grew 14% during the quarter, as did sales of Aranesp and the combined results of Neulasta/Neupogen. The market is even larger, as Johnson & Johnson (NYSE:JNJ) sells Procrit, a near-identical compound to Epogen. The next best-selling drug, Enbrel, for treatment of inflammation such as arthritis, also saw solid results in the United States and Canada. Pharmaceutical firm Wyeth (NYSE:WYE) has the rights to Enbrel everywhere else.

Historically, Amgen has posted some impressive growth: Total sales have advanced almost 28% annually, with earnings and cash flow of 25% each year over the past five years. Expansion has slowed slightly, but Amgen is still growing close to 20% annually. Additionally, free cash flow generation tends to exceed net income, leaving room for billions in stock buybacks every year.

For some reason, Amgen's shares trade at a very reasonable multiple to earnings, and an even lower free cash flow multiple. To justify where the stock is trading, Amgen only needs to grow cash flow 10% for five years, then spend the next decade slowing to the growth rate in the overall economy. That doesn't seem like an overly high hurdle, given the company's track record and close to a decade more of patent protection on the newest blood cell drugs.

There are definitely risks to consider; the market is trying to discern how easy it will be for competitors to produce and market "biosimilar" drugs, which doesn't happen very often in today's market environment. Also, FDA label changes related to dosing recommendations on Aranesp could be affecting near-term demand. Finally, the biotechnology industry is fierce. The competition includes hundreds of smaller players and other giants such as Genentech (NYSE:DNA) and Biogen Idec (NASDAQ:BIIB), not to mention pharma titans such as J&J and Merck (NYSE:MRK).  

These concerns are valid, but the first two could prove short-lived. And while the competition is cutthroat, the market will always be wide open for life-enhancing drugs. Plus, a favorable share price level and a robust product pipeline could help offset any adverse developments down the road.       

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Johnson & Johnson is an Income Investor recommendation. Biogen Idec is a Stock Advisor selection.

Fool contributor Ryan Fuhrmann is long shares of Amgen and J&J, but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.