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Buyor Sell Amgen Stock Aheadof Its Earnings

Should Investors Buy or Sell Amgen Stock Ahead of Its Q2 2025 Earnings?

As Amgen Inc. (NASDAQ: AMGN), one of the world's leading biotechnology companies, gears up to report its second-quarter earnings for 2025, investors are closely watching the stock's trajectory. Amgen, headquartered in Thousand Oaks, California, has long been a powerhouse in the biopharma sector, with a portfolio spanning treatments for cancer, cardiovascular diseases, inflammation, and bone health. The company's earnings release, expected in early August 2025, comes at a pivotal time amid evolving market dynamics, including patent expirations, pipeline advancements, and macroeconomic pressures. In this analysis, we'll delve into Amgen's recent performance, key growth drivers, potential risks, and whether the stock presents a buying opportunity or warrants caution ahead of the report.

Amgen's stock has shown resilience in recent quarters, but it's not without volatility. Over the past year, shares have traded in a range influenced by broader market sentiment, healthcare sector trends, and company-specific developments. As of early August 2025, Amgen's market capitalization hovers around $170 billion, reflecting its status as a blue-chip biotech name. The stock has gained approximately 15% year-to-date, outperforming the S&P 500's 10% rise, driven by positive sentiment around its diversified portfolio and strategic acquisitions. However, it lags behind some high-flying peers in the biotech space, such as Eli Lilly or Novo Nordisk, which have benefited from the obesity drug boom.

Looking back at Amgen's financials, the company reported robust results in Q1 2025, with revenues reaching about $7.5 billion, marking a 5% year-over-year increase. This growth was fueled by strong sales of flagship products like Enbrel (for rheumatoid arthritis), Prolia (for osteoporosis), and Otezla (acquired through the 2019 Celgene deal). Enbrel alone contributed over $1 billion in quarterly sales, though it faces ongoing pressure from biosimilar competition. Prolia, on the other hand, continues to shine with double-digit growth, benefiting from an aging global population and increased awareness of bone health issues. Amgen's oncology segment, including drugs like Kyprolis and Blincyto, also showed steady performance, underscoring the company's ability to navigate a competitive landscape.

A major catalyst for Amgen has been its 2023 acquisition of Horizon Therapeutics for $28 billion, which bolstered its rare disease portfolio. Horizon's Tepezza, a treatment for thyroid eye disease, has been a standout performer, generating over $800 million in annual revenue and expanding Amgen's footprint in immunology and inflammation. This deal, while initially met with regulatory scrutiny, has paid dividends by diversifying revenue streams away from mature products facing patent cliffs. Analysts project that Tepezza could drive mid-teens growth in the coming years, especially as Amgen invests in label expansions and international markets.

Turning to the pipeline, Amgen's research and development efforts remain a cornerstone of its long-term value proposition. The company is advancing several promising candidates, including MariTide (formerly AMG 133), a novel obesity drug that's generated buzz for its potential to rival market leaders like Wegovy and Zepbound. Early-phase data from 2024 trials showed impressive weight loss efficacy with a favorable side-effect profile, positioning it as a potential blockbuster. Amgen plans to release more Phase 2 results later in 2025, which could significantly impact stock sentiment. Additionally, in oncology, Amgen is progressing with tarlatamab, a bispecific T-cell engager for small cell lung cancer, which received FDA approval in May 2024 and is expected to ramp up sales contributions. The pipeline also includes biosimilars and next-generation therapies in areas like cardiovascular health, where Amgen's Repatha (for cholesterol management) continues to grow despite competition.

However, not all is smooth sailing. Amgen faces headwinds from patent expirations on key drugs. For instance, Neulasta, a supportive care drug for cancer patients, has seen sales erode due to generics, dropping from a peak of $4 billion annually to under $1 billion. Similarly, Enbrel's patents are under threat in various markets, with biosimilars already chipping away at market share. Regulatory and pricing pressures add another layer of complexity; the Inflation Reduction Act in the U.S. has introduced drug price negotiations, potentially capping revenues for Medicare-covered products. Amgen's involvement in ongoing litigation, including antitrust suits related to its business practices, could also introduce volatility.

From a valuation perspective, Amgen trades at a forward price-to-earnings (P/E) ratio of around 15x, which is attractive compared to the biotech sector average of 20x and peers like AbbVie (14x) or Gilead (16x). This suggests the stock may be undervalued relative to its earnings potential, especially if pipeline successes materialize. Using a discounted cash flow model, estimates peg Amgen's intrinsic value at approximately $350 per share, implying a 10-15% upside from current levels around $310. Revenue forecasts for 2025 project $30-32 billion, with earnings per share (EPS) expected at $18-20, driven by cost efficiencies and portfolio optimization. Amgen's strong balance sheet, with over $10 billion in cash reserves and manageable debt from the Horizon deal, provides flexibility for further M&A or share buybacks. The company has consistently returned value to shareholders through dividends, boasting a yield of about 3%, which appeals to income-focused investors.

That said, risks loom large ahead of earnings. Investors should watch for guidance on obesity drug development timelines, as any delays in MariTide could dampen enthusiasm. Macro factors, such as interest rate fluctuations and healthcare policy changes under a potential new U.S. administration, could sway sentiment. If Q2 results show softer-than-expected sales in core products due to biosimilar erosion, the stock might face downward pressure. Conversely, upbeat commentary on pipeline progress or upward revisions to full-year guidance could spark a rally.

So, is Amgen a buy or sell ahead of earnings? Based on current fundamentals, the stock leans toward a "buy" for long-term investors. Its diversified portfolio, promising pipeline, and reasonable valuation offer a compelling risk-reward profile. The Horizon integration has strengthened its moat in rare diseases, and with obesity treatments poised to become a multi-billion-dollar market, Amgen is well-positioned to capture share. However, short-term traders might consider holding off until after the earnings release to gauge management's tone on key challenges. For those with a horizon beyond 2025, accumulating shares on any post-earnings dip could prove rewarding, especially given Amgen's track record of innovation and shareholder returns.

In deeper detail, let's examine Amgen's competitive positioning. In the obesity space, while Eli Lilly and Novo Nordisk dominate with GLP-1 agonists, Amgen's MariTide differentiates itself as a GIP receptor antagonist combined with GLP-1 agonism, potentially offering better tolerability and once-monthly dosing. Phase 1 data indicated up to 14% weight loss in 12 weeks, surpassing some competitors, though larger trials are needed. This could address a market projected to exceed $100 billion by 2030, providing Amgen with a high-growth avenue amid maturing legacy products.

On the oncology front, Amgen's BiTE (bispecific T-cell engager) platform continues to innovate. Tarlatamab's approval marks a breakthrough for small cell lung cancer, a notoriously hard-to-treat indication with poor survival rates. Sales are forecasted to reach $500 million by 2026, bolstered by combination therapy trials with checkpoint inhibitors. Meanwhile, Amgen's biosimilar business, including versions of Avastin and Herceptin, provides a steady revenue stream in a cost-conscious environment, though margins are slimmer than innovative drugs.

Financially, Amgen's operating margins remain healthy at around 35%, supported by R&D spending of about 20% of revenues. The company has targeted $1 billion in cost savings from synergies post-Horizon, which should enhance profitability. Debt levels, while elevated at $60 billion, are manageable with interest coverage ratios above 5x, and Amgen's A-rated credit supports refinancing if needed.

Geographically, Amgen derives roughly 70% of revenues from the U.S., exposing it to domestic policy risks, but international expansion—particularly in Europe and Asia—offers diversification. For instance, Repatha's uptake in China has accelerated, tapping into a growing middle class with cardiovascular concerns.

Potential downsides include clinical trial failures; if MariTide encounters safety issues, it could erase recent gains. Broader biotech sector weakness, driven by funding crunches or regulatory hurdles, might also weigh on Amgen. Inflationary pressures on R&D costs could squeeze margins if not offset by pricing power.

In summary, Amgen stands at an inflection point. With earnings on the horizon, the report will likely highlight progress in high-potential areas like obesity and rare diseases, while addressing legacy product challenges. For value-oriented investors, the stock's defensive qualities—strong cash flows, dividends, and a proven management team—make it a solid hold or buy. Aggressive growth seekers might await more pipeline data, but overall, Amgen's blend of stability and innovation positions it favorably in a dynamic biopharma landscape. As always, individual risk tolerance and market conditions should guide decisions, but the fundamentals suggest optimism outweighs caution. (Word count: 1,248)

Read the Full Forbes Article at:
[ https://www.forbes.com/sites/greatspeculations/2025/08/04/buy-or-sell-amgen-stock-ahead-of-its-earnings/ ]