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In response to the company reporting a series of positive developments, shares of biotech giant Amgen (NASDAQ: AMGN) gained 10.5% in February, according to data fromS&P Global Market Intelligence.
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Here's a review of the key events that caused shares to rally:
- Amgen started the month on a positive note by announcing that its FOURIER trial showed that using Repatha-- the company's new cholesterol-lowering drug -- "significantly" reduced the risk of cardiovascular events in patients with clinically evident atherosclerotic cardiovascular disease.
- The company reported that its fourth-quarter revenue grew by 8% and that non-GAAP EPS increased by 11%. Both of these figures compared favorably to market watchers' expectations.
- Amgen announced that the Food and Drug Administration (FDA) approved Parsabiv as a treatment for secondary hyperparathyroidism in adult patients with chronic kidney disease on hemodialysis.
- The company announced that it successfullysubmitted a supplemental Biologics License Application to the FDA for Blincyto, the company's treatment for acute lymphoblastic leukemia. Management believes that this additional datasupport a label expansion claim for the drug.
- Amgen announced that the European Commission has approved a new single-dose delivery option of Repatha. This new product combines an automated mini-doserwith a pre-filled cartridge, providing patients with a hands-free way to inject themselves.
- Amgen announcedpositive results its Phase 3 ENDEAVOR trial, which was a head-to-head study testing its multiple myeloma drug Kyprolis versus Takeda's Velcade. The data showed that using Kyrplois led to a statistically significantimprovement in overall survival.
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Given the slew of positive updates, it is easy to understand why shares rallied.
For 2017, management is guiding for revenue to land between $22.3 billion and $23.1 billion, the midpoint of which suggests a 1% decline when compared to 2016. Thankfully, the picture looks a bit brighter on the bottom line. Amgen is guiding for non-GAAP EPS in 2017 to land between $11.80 and $12.60. By contrast, non-GAAP EPS in 2016 was $11.65, so the midpoint of this range represents a 5% jump. Given Amgen's long history of providing conservativeguidance, it is possible that management is sandbagging a bit. If true, then buying shares today could prove to be a profitable move.
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