Amgen’s Strategic Momentum Fuels a Buy Now at $285: Pipeline Breakthroughs and Margin Strength Signal a New Growth Era
40min read Amgen’s first-quarter 2025 results reveal a company at a pivotal juncture, where disciplined execution, robust pipeline advancements, and margin resilience are converging to create a compelling investment thesis. With its stock trading at $285 per share—a 25% discount to its peers on a forward P/E basis—Amgen presents a rare opportunity to capture 20%+ upside as it transitions into a high-growth biopharma leader. Let’s dissect the catalysts driving this inflection point.
Pipeline Dominance: From Rare Diseases to Cardiovascular Breakthroughs
Amgen’s Q1 performance underscores its ability to deliver on high-margin therapeutic areas, where competition is limited and pricing power is strong. Two recent milestones exemplify this strategic focus:
UPLIZNA’s FDA Approval for IgG4-RD: The April 2025 approval marks Amgen’s entry into the $1.2 billion global rare disease market, a category where TEZSPIRE and TAVNEOS are already outperforming. With a PDUFA date for UPLIZNA’s expansion into generalized myasthenia gravis (gMG) looming in December 2025, this drug could add $300 million+ in annual sales by 2027.
Repatha’s CV Outcomes Data (VESALIUS-CV): Expected in late 2025, this trial aims to solidify Repatha’s position as a first-line therapy for high-risk cardiovascular patients. If positive, it could propel Repatha’s sales beyond $3 billion annually, leveraging Amgen’s 60% share of the PCSK9 inhibitor market.
Meanwhile, MariTide (maridebart cafraglutide)—a once-monthly obesity treatment—could be a blockbuster. Phase 3 data (MARITIME-1/-2) expected in H2 2025 could position it to rival Wegovy, especially with its potential for longer dosing intervals. With the global obesity drug market projected to hit $20 billion by 2030, MariTide’s approval could add $1.5 billion in peak sales.
Margin Resilience: Outperforming Biosimilar Headwinds
Amgen’s Q1 non-GAAP operating margin expanded 2.5 percentage points to 45.7%, a stark rebuttal to fears of margin erosion from biosimilar competition. This discipline is critical as Prolia and XGEVA face biosimilar entries in H2 2025, which could erode their combined sales by $1.2 billion annually. How is Amgen countering this?
- Cost Optimization: Capital expenditures were held to $2.3 billion annually, and debt was reduced by $2.8 billion in Q1 alone, signaling fiscal prudence.
- Strategic Divestitures: The $800 million Otezla intangible asset impairment reflects a shift away from lower-margin assets, freeing capital for high-growth programs.
The result? Non-GAAP EPS rose 24% YoY to $4.90, outpacing peers. Even with biosimilar pressures, Amgen’s 2025 EPS guidance ($20.00–$21.20) implies a 14% 2-year CAGR, well-supported by oncology (BLINCYTO’s 52% sales surge) and rare disease (TEZSPIRE’s 65% growth).
Undervalued Innovation: A 14x P/E Multiple for 14% Growth?
At $285 per share, Amgen trades at just 13.4x its 2025 non-GAAP EPS guidance, even as key products like IMDELLTRA and MariTide could drive high teens revenue growth through 2027. Compare this to:
- Roche: 17x P/E with slower growth.
- Biogen: 14x P/E but with pipeline risks.
The disconnect is stark. Amgen’s $34.3–$35.7 billion 2025 revenue guidance—bolstered by oncology launches (IMDELLTRA in Japan, WEZLANA’s U.S. biosimilar dominance)—suggests the stock is primed for a fair value of $340–$360, implying 20%+ upside.
Risks vs. Catalysts: A Balanced Play with Near-Term Triggers
Risks:
- Pricing Pressures: Enbrel’s 10% sales decline due to 340B program mix highlights reliance on legacy products.
- R&D Costs: Late-stage trials for MariTide and IMDELLTRA could strain cash flow.
Catalysts (2025):
- June ASCO: IMDELLTRA’s Phase 3 data in second-line small-cell lung cancer (SCLC) could secure a first-line indication, expanding its addressable market.
- October PDUFA Date: TEZSPIRE’s nasal polyps approval could add $200 million in annual sales.
- December UPLIZNA gMG PDUFA: A win here solidifies its rare disease franchise.
Conclusion: Buy AMGN Now—The Upside Is Clear
Amgen is no longer a “me-too” biopharma. Its pipeline depth, margin discipline, and undervalued multiple make it a buy now at $285. With $8.8 billion in cash, a $2.3 billion share repurchase plan, and catalysts throughout 2025, this stock is poised to deliver 20%+ returns as it cements its leadership in oncology, rare diseases, and cardiovascular innovation.
The question isn’t whether Amgen will grow—it’s why investors are underestimating its potential. The answer lies in its Q1 execution and the catalysts ahead. Act now.
