Saturday, September 27, 2014

Amgen: Stronger Drug Portfolio with Acquisition

Various biotech industries have witnessed a rally in their stock prices, and many investors did reap the benefit. This positive thinking around pharma and biotech industries will continue to grow as the need of innovative medicine are expanding for unmet demands. Industries in this domain are more focused on the R&D, to create new drugs and meet the demands in the future. Various pharmaceutical industries are constantly upgrading their drug portfolio with acquisition, for a larger share of the market.

Amgen(AMGN) is one such company that is focused on providing medicinal solution to patient suffering from chronic diseases. To strengthen its portfolio the company recently acquired Onyx (ONXX). Onys, is one of the leading biotech pharmaceutical industry, focused on its drug portfolio that can be called as future drugs. These drugs can be used for un-curable disease like cancer which sounds like an enigma to various scientists. This is one main reason why companies like Onyx have a promising future with it prime focus on life saving drugs for treatment of cancer, this now provides steroids to Amgen's growth. With this acquisition, Amgen now has a stronger drug portfolio to provide medicine for patients suffering from cancer diseases. The market for this future drug is phenomenal, considering the growth of patients suffering from these diseases.

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"Amgen's acquisition of Onyx fits perfectly with our commitment to advancing medicines for cancer patients around the world," said Robert A. Bradway, chairman and chief executive officer of Amgen. "We look forward to working together with the talented staff at Onyx to make the most of our exciting oncology portfolio and pipeline."

Quarter overview

Amgen recently released its second quarter results for the fiscal 2014, and recorded growth in all corners. Consolidated revenue increased by 11% year over year, to record $5,180 million as compared to $4,679 in the same quarter last year. The company's operating expense was decreased to $2,861 million as compared to $2,895 in the same term last year, down by 1%, this again is good sign and will have a positive impact on the bottom line. Operating Income and net income also recorded a growth of 30% and 26% year over year. EPS also increased by 25% year over year, to $2.37 as against $1.89 in the second quarter of 2013.

The growth driver for the solid second quarter were the result of strong global demand. The company witnessed a strong growth in the international market, increased by 15% year over year. In the same quarter last year the company benefited from Medicaid rebate adjustment of approximately $185 million and in the second quarter of 2014 it was deprived of this rebate, despite this it still recorded a growth. The acquisition in the recent past, had a strong impact on the growth of the company.

Acquisitions bolstering growth and drug portfolio

Earlier Amgen had acquired rights of Roche's filgrastim and pegfilgrastim covering around 100 markets. With this rights acquisition, Amgen further strengthen its drug portfolio for cancer treatments. These drugs are one of the most common drugs prescribed to the cancer patient undergoing chemotherapy. These drugs are marketed in U.S & Europe under the brand name of NeupogenGEN® and Neulasta®, respectively.

"This agreement will enable Amgen to reach more patients around the world with two of our innovative medicines," said Robert A. Bradway, chairman and chief executive officer of Amgen.

As the company is in the third quarter, it recorded one of the biggest acquisitions of the pharmaceutical history, when it completed the acquisition of ONYX. Onyx is one of the leading companies with a future drugs portfolio used in treatment of blood cancer. Onyx 's Kyprolis, is most popular drug used for treatment of blood-cancer. As per the analyst estimates of Bloomberg, the anticipated growth for the sales of this medicine is projected to be $2.4 billion by 2019.

In the recent past, Onyx also got approval for STIVARGA in Japan; this medicine helps in curing metastatic colorectal cancer (mCRC), one of the most common diseases in Japan. Statistics reveal that around 40,000 people in Japan die from mCRC every year. This goes on to illustrate, that this drug will be a block buster in Japan and anticipated share of Onyx can be around 20%, boosting revenue growth. The overall growth of this drug is anticipated to reach $3.0 billion by 2020.

Outlook

Amgen has raised its guidance for the fiscal 2014, the revised guidance of the company for the 2014 is anticipated to be in the range of $19.5 billion to $19.7 billion as against the previous guidance

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