Amgen Inc.: Affordability Meets Growth in the Biotech Sector

Amgen Inc. (AMGN) has emerged as one of the most attractive affordable stocks in the biotech sector, offering a compelling combination of affordability, strong earnings performance, and a robust pipeline. This article delves into the factors that make Amgen a compelling investment opportunity in the current market landscape.

Amgen's affordability is evident in its valuation multiples. With a trailing PE of 35.02 and a forward PE of 13.28, the company is relatively less expensive than other biotechs like Vertex, which has a forward PE of 24.15. Additionally, Amgen's P/S ratio of 4.52 is lower than Vertex's 11.13, further highlighting its affordability. Although Amgen's PEG ratio of 2.65 suggests that some growth is priced in, its current price of $307.61 is at a 52-week low, presenting a potential entry point for investors.



Amgen's recent earnings and financial performance indicators further bolster its investment appeal. In Q3 2024, the company reported a 23% year-over-year increase in total revenues, driven by a 24% growth in product sales. Amgen's GAAP EPS increased 62% to $5.22, while non-GAAP EPS grew 13% to $5.58. The company's free cash flow reached $3.3 billion, up from $2.5 billion in the same quarter last year. These strong earnings results demonstrate Amgen's ability to deliver sustainable growth and profitability.



Amgen's commitment to R&D and innovation plays a crucial role in its pipeline and affordability in the long term. The company invested $5.4 billion in R&D in 2023, fueling a strong pipeline with 16 late-stage assets. Innovative therapies like MariTide for obesity and Repatha for cholesterol contribute to Amgen's growth prospects and affordability. Amgen's R&D expenditure as a percentage of revenue (17%) is higher than peers like Pfizer (10%) and Lilly (13%), underscoring its long-term focus on innovation.

Strategic acquisitions, such as Horizon Therapeutics, have also enhanced Amgen's product portfolio and affordability. The acquisition contributed $1.2 billion in sales in Q3 2024, driven by early-in-lifecycle medicines like TEPEZZA and KRYSTEXXA. This acquisition aligns with Amgen's focus on delivering innovative therapies across its core therapeutic areas, further bolstering its affordability and growth prospects.

In conclusion, Amgen Inc. (AMGN) offers an attractive combination of affordability, strong earnings performance, and a robust pipeline. Its competitive valuation multiples, recent earnings results, commitment to R&D, and strategic acquisitions make it one of the best affordable stocks to buy right now. As Amgen continues to invest in innovation and expand its product portfolio, it is poised to deliver long-term growth and value for investors.