Amgen Price Target Trimmed After Major Product Sales Disappoint In Q3

BMO Capital's Ian Somaiya decreased his price target for Amgen, Inc. AMGN from $198 to $192 while maintaining his Market Perform rating in an analyst note Thursday.

The company reported $5.43 billion in third-quarter sales Wednesday after the market close, which came in below BMO Capital's estimate of $5.50 billion and also below the Wall Street's consensus of $5.49 billion.

Most major products fell short of Wall Street's expectations. Repatha sales were roughly flat versus the second quarter, so Somaiya decreased peak sales from $4.82 billion to $3.79 billion. Enbrel sales of $1.36 billion came in line with expectations while Neulasta sales of $1.12 billion managed to beat the consensus estimates.

Amgen reported earnings per share of $3.27, which was above BMO Capital's estimate of $3.17 and above Wall Street's consensus of $3.10. EPS was better than expected due to increased Ibrance royalties and $100 million in interest income from venture business.

The Puerto Rico manufacturing plant risk is under control, but a risk for 2018 remains unless power and water supply normalize, said Somaiya. Currently, the plant is dependent on power generators and almost all the staff has returned to work.

Somaiya said that the Market Perform rating reflects the lack of near-term catalysts. He expects headwinds for Enbrel and Neulasta going forward.