Amgen stock toppled to a year-low Wednesday after first-quarter competition snagged a key blockbuster drug and two new products lagged expectations.
During the first quarter, sales of migraine prevention drug Aimovig and cholesterol-lowering Repatha missed analyst estimates by 27% and 12%, respectively, Leerink analyst Geoffrey Porges said. Further, sales of blockbuster drug Neulasta dipped 12% and Sensipar sales fell 57%.
“On a whole, these results are negative for a company entering a period of multiple challenges to those legacy products and increasing dependence on the recent launches to carry the company’s top line until the early-stage pipeline matures,” Porges said in a report to clients.
Amgen Earnings Beat — But There’s A Caveat
Total sales of $5.56 billion were flat and met estimates, while adjusted Amgen earnings rose 2.6% to $3.56 per share, ahead of expectations. But Porges noted that the biotech recently bought back $3 billion in shares, boosting earnings by 2%.
Meanwhile, older products are beginning to see some erosion.
Sales of Neulasta, a bone-marrow stimulating drug, dipped 12% to $1.02 billion. That topped expectations. But Sensipar plunged 57% to $213 million in sales. Sensipar treats a complication of chronic kidney disease and high levels of calcium in the blood. It also missed views by 37%.
“Amgen’s products also benefited from changes in accounting estimates, including about $100 million of additional Enbrel sales, and these one-time items helped Amgen avoid a top-line consensus miss,” Porges said.
Migraine Drugs Struggle To Gain Traction
Notably, sales of Repatha climbed 15% to $141 million, and Aimovig brought in $59 million in sales. Both drugs are in competitive markets. Repatha rivals Regeneron Pharmaceuticals‘ (REGN) and Sanofi‘s (SNY) Praluent. Aimovig competes against drugs from Teva Pharmaceutical (TEVA) and Eli Lilly (LLY).
“Focus remains on disappointing metrics from key growth products Aimovig and Repatha, which both saw misses vs. the Street and quarter-over-quarter declines,” RBC Capital Markets analyst Kennen MacKay said in his note to clients.
Mizuho Securities analyst Salim Syed noted Amgen had previously warned Repatha could be pressured in the first quarter. Amgen recently lowered the net price on Repatha in an effort to expand patient access.
But the Aimovig miss is more concerning for the entire class of migraine prevention drugs, he said. Aimovig, Teva’s Ajovy and Lilly’s Emgality all work to block a substance called CGRP in the brain to prevent migraines.
“Investors (are) struggling to see major growth from the CGRP class right now,” Syed said in his note.
What’s Next For Amgen Stock?
The next key catalyst for Amgen stock will come from a clinical study of its cancer treatment, AMG 510. The drug aims to block a protein called KRAS involved in several solid tumors — notable among them is pancreatic cancer.
“AMG 510 is, in our view, the crown jewel of Amgen’s early-stage pipeline with first-in-human (effectiveness) dose-escalation data approaching at (the American Society for Clinical Oncology annual meeting),” RBC’s MacKay said.
He kept his sector perform and 192 price target on Amgen stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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