Amgen has attractive, high-growth assets

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Why the fund upped its stake in Amgen

Activist investor Dan Loeb’s fund, Third Point Partners LP, added to its position in Amgen, Inc. (AMGN) in the third quarter. The fund believes that the company trades at a discount compared to its peers despite a “compelling mix of long‐duration, high‐margin mature products, and a number of exciting high growth assets.”

In this article we’ll discuss Amgen’s principal products and its pipeline.

Amgen pipeline

Amgen’s principal products

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The biotech giant’s principal products include oncology treatments, Neupogen and Neulasta, anemia drugs, Epogen and Aranesp, rheumatoid arthritis treatment, Enbrel, osteoporosis blockbusters, Xgeva and Prolia, and secondary hyperparathyroidism therapy, consisting of Sensipar and Mimpara. Amgen also added blood cancer drug Kyprolis to its portfolio via its $10.4 billion buyout of Onyx Pharmaceuticals last year.

The principal products represented 92% of Amgen’s worldwide product sales for the first half of 2014. Total product sales in 3Q14 rose 4% year-over-year, mainly driven by Kyprolis, Prolia, Neulasta, and Xgeva.

Highlights of Amgen’s product pipeline

Amgen noted in its annual report that it “plans to have pivotal data on 10 innovative molecules in its later stage pipeline by 2016 and to advance a portfolio of six biosimilar molecules that have the potential to begin launching in 2017.”

Chief among Amgen’s pipeline assets, as shown in the above presentation slide, is its innovative late-stage product, Evolocumab. Amgen shares went up at the end of August after the company announced it had submitted a Biologics License Application to the U.S. Food and Drug Administration, or FDA, for its high-cholesterol treatment, Evolocumab.

According to a release, Evolocumab is an investigational fully human monoclonal antibody that inhibits proprotein convertase subtilisin, or kexin type 9 (or PCSK9), a protein that reduces the liver’s ability to remove low-density lipoprotein cholesterol, or bad cholesterol, from the blood.

Reports note that Amgen is leading the race against Regeneron Pharmaceuticals Inc (REGN) and its French partner Sanofi SA (SAN), plus Pfizer Inc. (PFE), and Eli Lilly and Co (LLY) in developing the PCSK9 inhibitor. Analysts expect multibillion-dollar sales from these drugs.

The FDA recently awarded priority-review status to Amgen’s investigational cancer immunotherapy, Blinatumomab. Amgen also saw positive data from a phase III study on its biosimilar candidate, ABP 501.

More on Third Point’s investment thesis on Amgen can be found in the next part of this series.

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