A Member of Pat McKeough’s Inner Circle recently asked for his advice on Amgen, a leading biotechnology company with a portfolio spanning oncology, cardiovascular disease, inflammation, bone health, nephrology, and neuroscience which generates approximately $36 billion in annual revenues.
Pat likes the strong financial performance with plenty of diversified revenue growth, defensive characteristics, and transformative pipeline optionality. However, Pat notes that regulatory and pricing pressures continue to intensify, with government drug price negotiations threatening future revenue and profit margins.
Amgen Inc. (Symbol AMGN on New York; www.amgen.com) is a medical biotechnology firm.
The company got its start in 1980, helping to launch the biotechnology industry. Biotechnology uses biological processes and living organisms to develop technologies and therapies for a variety of applications, particularly in health.
Over the past 40 years, Amgen is now one of the world’s leading biotechnology companies, with 49 products, delivery devices and product candidates.
Amgen has a presence in more than 100 countries, although the U.S. accounted for 72.8% of its sales in 2024. The rest of the world contributed 27.2%.
The company focuses on areas of high, unmet medical needs. Its largest product by sales is Prolia, which accounted for 13.7% of 2024 sales. Prolia is used mostly to treat postmenopausal women with osteoporosis and at higher risk of bone fractures. It also increases bone mass in men with osteoporosis.
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Amgen’s second bestseller is ENBREL, which accounted for 10.4% of 2024 sales. It treats rheumatoid arthritis.
The company currently has 37 drug candidates under development. Perhaps the most important of these is MariTide (Maridebart cafraglutide), an obesity drug. Maritide has the potential to deliver longer-lasting weight loss with less frequent doses than current market leaders such as Wegovy (made by Novo Nordisk) and Zepbound (Eli Lilly).
Amgen’s other candidates include IMDELLTRA (lung cancer), BLINCYTO (leukemia) and TEPEZZA (thyroid eye disease).
Some of the company’s competitors rely heavily on one or two products. But Amgen’s diversification means it holds a portfolio of no less than 14 blockbuster products. Blockbusters are defined as products with over $1 billion in annual sales.
In 2024, the company made record sales for 21 of its products, with 10 delivering double-digit sales growth. They include Repatha, TEZSPIRE (asthma), EVENITY (osteoporosis), and TAVENOS (vasculitis).
What’s more, the company continues to lead with its investment in research and development (R&D). In 2024, it invested a record $6.0 billion in R&D, up 25.0% from $4.8 billion in 2023. That, in turn, was up 9.1% from $4.4 billion in 2022.
Amgen’s revenue has increased steadily since the pandemic, thanks to the strong performance of its newer products and the acquisition of biopharmaceutical company Horizon Therapeutics in October 2023. Revenue climbed 10.9%, from $25.42 billion in 2020 to $28.19 billion in 2023. Revenue then jumped 18.6% to $33.42 billion in 2024.
Earnings before one-time items fell 15.8%, from $9.48 billion, or $16.18 a share, in 2020 to $7.98 billion, or $14.00 a share, in 2021. That reflects a change in the company’s accounting policies. In 2022, earnings jumped 20.0%, to $9.57 billion, or $17.69 a share, on higher revenue and lower operating expenses. Earnings rose 4.8% in 2023, to $10.03 billion, or $18.65 a share, as higher costs only partly offset revenue growth. In 2024, earnings rose 7.0% to $10.73 billion, or $19.84 a share, as revenue continue to improve.
Meanwhile, in the three months ended September 30, 2025, Amgen’s revenue jumped 12.4%, to $9.56 billion from $8.50 billion a year earlier. Excluding one-time items, Amgen earned $5.64 a share, in the latest quarter. That was up 13.2% from $5.58.
Amgen’s outlook is positive despite tariffs and political pressure
Going forward, the company faces near-term challenges. Its global operations rely on manufacturing facilities outside the U.S. This makes it vulnerable to the Trump administration’s tariffs. Meanwhile, the U.S. government is negotiating with pharmaceutical companies to cut drug prices within the Medicare program. This, too, could hurt revenue growth.
Nonetheless, Amgen’s long-term outlook is positive, given its many blockbuster products and their strong sales growth. In addition, the company’s substantial R&D has given it numerous potential best-in-class medicines. These include medicines for obesity and obesity-related conditions, cancer, and heart disease.
The stock trades at an attractive 14.9 times the $21.93 a share that Amgen should earn in 2026. It will raise its quarterly dividend by 5.9% with the March 2026 payment, to $2.52 a share from $2.38. The stock yields 3.0%.
Recommendation in Pat’s Inner Circle: Amgen Inc. is okay to hold.
