Amgen Treated Like a Normal Drug Stock

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Amgen (AMGN-NASDAQ) posted EPS of $0.90, but $0.71 on GAAP EPS.  Revenues were $3.73 Billion versus $3.7 Billion estimates.  Revenues are projected for $15.4 to $16 Billion for 2007 and adjusted EPS put for 2007 at $4.30 to $4.50.  Estimates for the quarter were $0.94 to $0.95 depending on your consensus, but 2007 estimates are $4.43.

The stock closed down 0.4% at $74.85 and is down almost 2% around $73.50 in the initial reaction.  At the mid-point this is only a 17 P/E for 2007, so investors aren’t willing to pay up for Amgen’s earnings based on Congressional scares and potential patent issues in 2008 and beyond.  The valuation isn’t the issue here, because this ons has been cheaper than many Big Pharma stocks for a while.   Its market cap is $87 Billion.

Amgen is no longer treated like a biotech, it’s treated like a plain Jane drug stock.  That might not be fair, but the market sets the rules.

Jon C. Ogg
January 25, 2007