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U.S. Equity Research News
Zhang Starts Amgen (AMGN) at MARKET PERFORM
August 7, 2009
Jason Zhang, PhD, senior research analyst covering Biotechnology, has today launched coverage of Amgen (AMGN) with a MARKET PERFORM rating.
From Zhang's note: "We think the story of Amgen hinges on two questions: 1) How big is Prolia (denosumab, commonly known as D-mab) and how fast it will grow? 2) Can the base business (ESA, G-CSF, Enbrel) reverse its decline? We believe D mab can reach $2.4 billion in combined sales in the osteoporosis and oncology markets by 2012, making it one of the most interesting new biological drugs. With regard to the ESA and G-CSF franchises, we think additional regulatory actions (REMS program in the US for Aranesp, upcoming bundling legislation for Epogen) and biosimilar competition (ESA and G-CSF in Europe) will pressure some products on volume and others on price, leading to flat sales or modest revenue declines. Another important product, Enbrel, will also be under pressure from the entry of new competitors. We expect AMGN shares to trade at or above our price target given the potentially positive catalysts in 2H09, such as a likely positive FDA advisory meeting on August 13 and FDA approval in osteoporosis and treatment-induced bone loss in October. However, we expect the shares to pull back as we see a continued weakness in its core base business and modest initial osteoporosis sales for D-mab."
To receive a full copy of the report or for more information, please contact your BMO Capital Markets representative.
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