Why Amgen (AMGN) Remains a Top Buy in Biotech Amid Strong Earnings and Strategic Momentum

In the biopharma sector, where value and growth often diverge, Amgen (NASDAQ: AMGN) stands out as a rare convergence of both. The company’s Q2 2025 earnings, strategic product portfolio, and institutional backing underscore its position as a top-tier investment. With a 9% year-over-year revenue increase to $9.2 billion and a 92% surge in GAAP earnings per share (EPS) to $2.65, Amgen has demonstrated resilience amid pricing pressures and competitive dynamics [1]. This performance, coupled with a revised full-year revenue guidance of $35–$36 billion, positions the biotech giant as a compelling buy for investors seeking long-term capital appreciation and dividend sustainability.

Robust Earnings and Margin Expansion

Amgen’s Q2 results reflect a disciplined approach to balancing volume growth and pricing. Total product sales rose 9% to $8.77 billion, driven by 13% volume growth, despite a 3% decline in net selling price [1]. The company’s GAAP operating margin expanded by 6.6 percentage points to 30.3%, while non-GAAP operating income hit $4.3 billion, with a margin of 48.9% [1]. This margin expansion is critical in a sector where R&D costs and patent expirations often erode profitability.

Free cash flow generation further strengthens Amgen’s value proposition. The firm generated $1.9 billion in Q2, a testament to its ability to convert revenue into liquidity [1]. This financial flexibility supports dividend sustainability—Amgen has increased its dividend for 15 consecutive years—and funds strategic R&D initiatives.

High-Margin Portfolio Drives Growth

Amgen’s product portfolio is a cornerstone of its growth strategy. Fifteen products delivered double-digit sales growth in Q2, including Repatha® (evolocumab), which surged 31% to $696 million, and EVENITY® (romosozumab-aqqg), up 32% to $518 million [1]. The Rare Disease segment alone contributed $1.4 billion, with UPLIZNA® (ifabotuzumab-olaf) growing 91% year-over-year [2].

In oncology, BLINCYTO® (blinatumomab) and IMDELLTRA® (tarlatamab-dlle) posted 45% and 65% sales growth, respectively [1]. Meanwhile, the biosimilar portfolio expanded 40% to $661 million, diversifying revenue streams. These high-margin offerings (non-GAAP operating margin of ~45% of product sales) [4] ensure that Amgen’s growth is not only robust but also profitable.

Institutional Confidence and Analyst Endorsement

Amgen’s strategic momentum is echoed by institutional investors and analysts. Cutter Capital Management LP increased its holdings by 31.3% in Q1 2025, making Amgen its second-largest position [1]. This aligns with William Blair’s “Outperform” rating, which cites Repatha’s market expansion and Imdeltra’s Phase III gastric cancer trial success as key catalysts [3]. UBS also raised its price target to $326, reflecting confidence in Amgen’s ability to exceed earnings expectations [3].

Strategic Innovation and Future Catalysts

Amgen’s focus on innovation is another growth driver. The company is advancing its obesity pipeline with Meritide in Phase III trials, targeting a market with significant unmet need [4]. Additionally, Imdeltra’s 40% reduction in mortality risk for gastric cancer patients, as presented at ASCO, positions it to redefine treatment standards [4].

R&D investments and AI-driven productivity gains further bolster Amgen’s long-term outlook. CEO Robert Bradway emphasized the company’s commitment to “innovation in cardiovascular and rare diseases,” areas where Amgen holds a competitive edge [5].

Conclusion

Amgen’s combination of strong earnings, margin expansion, and a high-margin product portfolio makes it a rare biotech stock that balances value and growth. With institutional ownership rising, analyst ratings favorable, and a pipeline of innovative therapies, the company is well-positioned to deliver sustained returns. For investors seeking exposure to a biopharma leader navigating the sector’s challenges with agility, Amgen remains a top buy.

Source:
[1] AMGEN REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS [https://www.prnewswire.com/news-releases/amgen-reports-second-quarter-2025-financial-results-302522386.html]
[2] Amgen Inc. (AMGN) Q2 FY2025 earnings call transcript [https://finance.yahoo.com/quote/AMGN/earnings/AMGN-Q2-2025-earnings_call-341083.html]
[3] Amgen stock price target raised to $326 by UBS on expected Q2 beat [https://www.investing.com/news/analyst-ratings/amgen-stock-price-target-raised-to-326-by-ubs-on-expected-q2-beat-93CH-4143378]
[4] Amgen outlines $35B–$36B 2025 revenue target as... [https://seekingalpha.com/news/4479407-amgen-outlines-35b-36b-2025-revenue-target-as-volume-growth-offsets-pricing-pressure]
[5] Earnings call transcript: Amgen beats Q2 2025 earnings expectations [https://www.investing.com/news/transcripts/earnings-call-transcript-amgen-beats-q2-2025-earnings-expectations-93CH-4171634]