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Why Is Enbrel So Important for Amgen?

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Enbrel is still a major product for Amgen

YTD, Amgen’s (AMGN) stock has already fallen 9%. Perhaps the pressure on Enbrel (etanercept) is to blame for the negative investor sentiment.

Amgen markets Enbrel in the US and Canada. The rights to market and sell the drug outside of the US and Canada are held by Pfizer (PFE). With the availability of the biosimilar version in Europe, Pfizer is already recording a fall in Enbrel’s revenues. To understand Enbrel’s prospects outside the US and Canada, please refer to Why Pfizer’s Enbrel Faces a Sales Decline. In the US and Canada, Enbrel faces stiff competition from Johnson & Johnson’s (JNJ) Remicade and Stelara, and AbbVie’s (ABBV) Humira. For details on Enbrel’s revenue projections in the US and Canada, please read Competition Might Impact Enbrel’s Growth Prospects in 2016.

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How could Enbrel still grow?

Despite being on the market for over 18 years, Enbrel still holds “general subject matter” patents in the US. To further expand the labels for the drug, Amgen is conducting two phase 3 studies for Enbrel as monotherapy for treating psoriatic arthritis and rheumatoid arthritis remission.

Clearly, Amgen plans to drive Enbrel in 2017 and beyond based on the volume growth. Let’s try to understand Enbrel’s performance in 3Q16 in the next part of the series.

It seems that with its continuous downfall, buying AMGN’s stock at current levels could be a good investment opportunity. If you invest in the iShares Nasdaq Biotechnology ETF (IBB), you can enjoy exposure to Amgen, but in a limited way. Of its total assets, IBB invests 8.1% in Amgen.

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