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Alberto Abaterusso
Alberto Abaterusso
Articles (1382) 

Europe Approves Expanded Label for Amgen Drug

The European Commission gives approval to a drug that is used to treat cardiovascular disease

May 17, 2018 | About:

The European Commission approved Amgen's (NASDAQ:AMGN) Repatha for the treatment of adults who are diagnosed with a type of cardiovascular disease.

The drug acts as a low-density lipoprotein cholesterol (LDL-C) levels reducer among adults who are diagnosed with an atherosclerotic cardiovascular disease. Since the inflammation of the vessels starts the atherosclerotic process, it is believed that reducing the level of this group of lipoproteins also reduces the likelihood of the development of the disease.

Severe atherosclerosis is a disease in which the inner layer of an artery narrows because of plaque accumulation. It can lead to coronary artery disease, stroke, peripheral artery disease and kidney problems.

The new indication of Amgen’s Repatha as an LDL-C levels reducer is supported by data. The Fournier study enrolled 27,564 patients and showed that an optimized statin/Repatha combined therapy achieved reductions of 27% in risk of heart attack, 21% in risk of stroke and  22% in risk of coronary revascularization. Those risk percentages were estimated in about 26 months and 12 days after the beginning of treatment period.

Repatha is one of Amgen’s key products. Its sales increased 151% year-over-year to $123 million in the first quarter of 2018. From its portfolio of products, Amgen made sales of $5.3 billion in the quarter, which represented a 3% increase compared to 2017.

Amgen is trading at $173.8 per share, with a market capitalization of $115 billion. It also has a price-book ratio of 7.44 versus an industry median of 4.51, a price-earnings ratio of 55.88 versus an industry median of 29.83 and a price-sales ratio of 5.51.

The forward price-earnings ratio for Amgen is 12.85 versus an industry median of 24.45. For fiscal years 2018 and 2019, analysts forecast an earnings per share of $13.66 and $14.16.

The company distributes to shareholders an annual dividend of $5.28 per share through quarterly payments of $1.32 per share. The current dividend yield is 2.75% versus the S&P 500's current dividend yield of 1.84%. The forward dividend yield is 3.06% versus an industry median of 1.09%.

The healthcare stock lost 2% so far this year. It is trading at a market value, which is $21.64 above the 52-week low price of $152.16 per share and $27.43 far from the 52-week high of $201.23 per share. Amgen’s share price is well beyond the Peter Lynch Earnings Line (P/E = 15) and the Price at Med P/E without NRI (P/E = 23.76).

The average target price for Amgen is $194.33 per share and the recommendation rating is 2.3 out of 5.

(Disclosure: I have no positions in Amgen.)

About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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