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Argus Sees A String Of Catalysts Ahead For Amgen, Raises Price Target

Amgen, Inc. AMGN has solid growth prospects, backed by potential sales of established drugs as well as the launch of new drugs, Argus’s Jacob Kilstein said in a report. He maintained a Buy rating on the company, while raising the price target from $185 to $195.

Amgen’s shares have gained 12 percent over the past quarter, versus a 6 percent gain in the S&P 500. “We expect the launch of new drugs, successful Phase 3 study results, expanded indications for existing products, and stronger sales and margin growth to be catalysts for the shares,” analyst Jacob Kilstein wrote.

Bright Prospects

While the sales of established drugs have continued to grow at a healthy pace, Amgen has launched Repatha for high cholesterol and Kyprolis for multiple myeloma, which are “promising,” Kilstein mentioned.

Repatha was launched in 1Q and recorded sales of $27 million in 2Q, above the consensus estimate of $25 million. Management estimates the potential market at 25 million patients, and expects the drug to “eventually become Amgen’s eighth billion-dollar product,” the Argus report noted.

Amgen has received European approval for Kyprolis and is awaiting Canadian approval. Kyprolis sales grew 45 percent y/y in 2Q to $142 million. “We believe that the product could eventually achieve $1 billion in annual sales,” the analyst commented.

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DateFirmActionFromTo
Jul 2016CitigroupMaintainsNeutral
Jul 2016JefferiesMaintainsBuy
Jul 2016Morgan StanleyMaintainsOverweight

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