UBS Downgrades Amgen On 'Waiting Game,' Removes Brodalumab From Model

In a report published Thursday, UBS analyst Matthew Roden downgraded the rating on

from Buy to Neutral, while lowering the price target from $185 to $165. The analyst believes that the loss of Brodalumab has put pressure on the company's base business. "Although we continue to expect Amgen to beat numbers in 2015, including at 2Q results, we also think the loss of bro-mab puts more emphasis on the base business to continue to deliver upside," Roden explained. The analyst believes that the base business could deliver upside, while mentioning that biosimilar competition does not appear to be a cause for concern. While there is increased uncertainty regarding the extent of impact of such competition, the analyst expects the uncertainty to be resolved in 2015. "We think that uncertainty creates a waiting game that may limit upside potential in the stock this year," Roden elaborated. The FDA approval for Repatha is still expected on or before the August 27 PDUFA, "with a label that is broader than the FDA Advisory Committee recommended," according to the UBS report. However, the analyst believes that this would offer limited upside to the stock because the bulls are already expecting a broader label.