Thursday May 24, 2012
by David Fried, editor The Buyback Letter
We bought biotech giant Amgen (AMGN) a couple of times back in 2009; now it has floated to the top of our filters and radar again.
Amgen discovers, develops, manufactures and delivers human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize biotech’s promise by bringing safe, effective medicines from lab to manufacturing plant to patient.
Amgen therapeutics have helped millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, bone disease and other serious illnesses.
Amgen has a deep and broad pipeline of potential new medicines, and has strong partners -- such as Wyeth, Pfizer and Johnson & Johnson -- for some of its products.
Ups and downs with some of its drugs made the news lately, including good news about the experimental drug rilotumamab, which showed promising results for patients with gastric cancer.
Amgen had previously set the drug aside after an earlier disappointing study, but a look at fresh data revived interest.
These types of results are an example of a significant shift taking place in how drugs are discovered and who they’ll work best for.
It’s called “personalized medicine,” which involves determining whether a patient is genetically susceptible to a particular disease or would be especially responsive to certain treatments. These therapies have increased fivefold since 2006, with more than 72 available now.
This approach is becoming more important for drugmakers to reduce the time and cost of testing therapies and increase the chances of success.
First-quarter earnings per share were $1.59, 20.5% above the year-ago period. A lower tax rate, lower share count and higher revenues contributed to the year-over-year increase in earnings. Total revenue increased 9.2% to $4,048 million.
For 2012, the company expects earnings in the range of $5.90-$6.15 per share on revenues of $16.1-$16.5 billion.
During the first quarter of 2012, Amgen repurchased some $1.4 billion in stock. In the last 12 months, management has reduced shares outstanding by 6%.
Learn more about this financial newsletter at David Fried's The Buyback Letter.