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Amgen Downgraded After Top Products See Sales Slip In Q3

Amgen Downgraded After Top Products See Sales Slip In Q3
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Argus downgraded shares of Amgen, Inc. (NASDAQ: AMGN), citing concerns about the secular slowdown in the sales of the company's top three products — namely Enbrel, Neulasta and Aranesp — which together accounted for 55 percent of the total revenues.

As such, the firm downgraded shares of Amgen from Buy to Hold.

Analyst David Toungsees the declines as secular, rather than cyclical, given that these drugs have lost patent protection and face competition from biosimilars. On the other hand, the analyst noted that company's most promising new drugs account for just 14 percent of revenues, which he feels is inadequate to offset the declines of the top three brands.

See also: Attention Biotech Investors: Here Are November PDUFA Catalysts On The Horizon

Argus indicated that the bottom line beat Amgen managed to record in the third quarter came from cost cuts rather than higher sales. On that note, the management said it would manage expenses carefully in 2018, which is a pointer that growth in R&D and marketing activities will trail the revenue growth, the firm added.


"We would consider a more constructive stance on AMGN on signs of stronger contributions from the company's new drug pipeline or from its biosimilars portfolio," the firm said.

"We note, however, that Amgen may not generate commercial revenue from biosimilars until 2019 due to regulatory and legal hurdles."

Latest Ratings for AMGN

Jan 2019CitigroupMaintainsNeutralNeutral
Dec 2018Morgan StanleyMaintainsOverweightOverweight
Nov 2018CitigroupMaintainsNeutralNeutral

View More Analyst Ratings for AMGN
View the Latest Analyst Ratings

Posted-In: Argus David ToungAnalyst Color Biotech Downgrades Analyst Ratings General Best of Benzinga


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