Yahoo Finance Inside Amgen’s Key Growth Drivers in 2016
Amgen's Valuation Drivers in 2016: The Inside Story
Oncology drugs
The positive data from the Aspire and Endeavor trials has strengthened Kyprolis’ position in the US MM (multiple myeloma) market for Amgen (AMGN). The company plans to use this Endeavor data to negotiate favorable reimbursement terms from European regulators. With the commercial success of Kyprolis, the ongoing market penetration of Blincyto is expected to boost Amgen’s revenues and profit margins in 2016.
Kyprolis’s performance
Wall Street analysts have projected that Kyprolis’ revenues will reach about $766.9 million in 2016, which would be a YoY (year-over-year) growth of about 49.8%. Kyprolis has benefitted substantially from the addition of its Endeavor data to its label in January 2015, which stressed on the superior efficacy of the drug as compared to Velcade in MM. The drug is now being increasingly considered as a backbone therapy for MM.
Kyprolis has maintained its dominance in the third line MM space, despite tough competition from Celgene’s (CELG) Pomalyst. The company also expects to witness strong growth in second-line MM therapy market in the US. While competition in the MM segment has intensified due to the launch of Johnson & Johnson’s (JNJ) Darzalex (through subsidiary Janssen Biotech), it’s mostly been concentrated in the fourth-line therapy segment in the US. Kyprolis also faces competition from Novartis’ (NVS) Farydak.
The post-launch initial response for Kyprolis in international markets has also been encouraging. (For more on the factors boosting Kyprolis’ sales in 2016, please refer to “What Could Drive Amgen’s Kyprolis Sales in 2016?“)
Blincyto performance
Amgen’s novel oncology drug, Blincyto, is also actively penetrating US and European markets. The drug has been approved by the FDA (US Food and Drug Administration) and European Commission for adult patients with Philadelphia chromosome-negative, relapsed or refractory B-cell precursor acute lymphoblastic leukemia, or ALL.
In 1Q16, Amgen filed sBLA (supplemental biologics license application) for including data related to the efficacy of Blincyto for treating younger patients with ALL. On May 03, 2016, the FDA accepted this sBLA for priority review.
Notably, Amgen has about 4.4% exposure in the Health Care Select Sector SPDR Fund (XLV).
Now let’s explore Amgen’s Neupogen, Neulasta, and Xgeva.
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