Morningstar

Amgen Shares Unfairly Nicked?

We continue to see the company's broad portfolio and newer drugs as providing a wide economic moat and a buffer to biosimilar threats to the older Enbrel and Neulasta franchises.

Securities In This Article
Amgen Inc
(AMGN)

We think Repatha has $4 billion in peak sales potential, but we don’t model a significant ramp in sales until 2018. We think stronger uptake will follow guideline and prescribing label changes (which should push payers to open access), as well as new risk-sharing contracts with payers (which will likely imply a lower net price). Our pricing estimates for Repatha fit well with the value assessment of the drug and the potential impact of risk-sharing contracts. Amgen estimates the value of Repatha at $7,700-$15,000 per year depending a patient’s risk level, and based on data presented at the meeting, Repatha net prices today appear to already be below $10,000. Following this data, Amgen hopes that payers will expand access and reduce the hurdles that have been preventing the majority of patients with prescriptions from initiating therapy, and it plans to offer an option that would provide a refund if a patient has a stroke or heart attack while taking Repatha (this is only expected to lower net pricing if the drug does not perform as it has in clinical trials).

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About the Author

Karen Andersen, CFA

Strategist
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Karen Andersen, CFA, is a sector director, AM Healthcare, for Morningstar*. In addition to leading the sector team, she covers biopharma firms in the US and Europe, focusing mostly on large-cap firms with foundations in biologic or gene-based medicines.

Before joining Morningstar in 2005, Andersen received a master’s degree in business administration from the Jones Graduate School of Business at Rice University, where she served as senior healthcare analyst for the M.A. Wright Fund and earned the distinction of Jones Scholar. She also holds the Chartered Financial Analyst® designation.

She ranked first in the biotechnology industry, and had the highest score overall, in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

Andersen holds a bachelor’s degree in biochemistry from Rice University, where she graduated magna cum laude. She is also a member of Phi Beta Kappa. She has scientific research experience in academia at both Rice University and the University of Queensland in Australia. She also worked in the healthcare industry, both at genetic testing firm Integrated Genetics (now part of LabCorp) and as a research assistant at Lexicon Genetics (now Lexicon Pharmaceuticals).

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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