Hey guys! I’ve been exploring the biotech and pharma space lately and came across an analyst report on Amgen (AMGN). The company looks solid: insane free cash flow, great assets, and still paying a healthy dividend.
The company’s valuation also looks good, I mean, it seems reasonable for a biotech company of this size. I'm probably don't have permission to share this, so think I didn't, but the company I bought the report for (Hartmann Research) expects this return over 10 years: *4.1% (EPS growth) + 2.5% (dividends) + 1% (valuation) = 7.6% per year.*
But what caught me off guard is that four of their five biggest blockbusters are facing patent expirations between now and the end of the year, and together they accounted for about 25% of their total revenue last year.
|Medicine|2024|Patent Expiration|
|:-|:-|:-|
||
|Enbrel®|3,411|2037|
|Neulasta®|443|2015|
|Prolia®|4,500|2025|
|Aranesp®|1,381|2024|
|Xgeva®|2,289|2025|
So now I’m wondering: is it reasonable to believe that their pipeline is strong enough to offset this revenue shortfall, or will their current assets be able to sustain that revenue? I’d love to hear from anyone here who follows them closely or has an opinion on how biotech companies typically navigate this type of transition.
(The phase 3 pipeline is too big to copy and paste each line here in a table, since it is not allowed to share screenshots, but you can find [here](https://wwwext.amgen.com/-/media/Themes/CorporateAffairs/amgen-com/amgen-com/downloads/investors/2024-annual-report-letter-and-10k.pdf) in page 37.)