Pharmaceutical manufacturer Amgen (NASDAQ: AMGN) has been on a strong and steady growth trajectory for a long time. Its share prices have risen by 70% over the past five years, showing no signs of slowing down. With a new weight loss drug currently in phase 2 trials, Amgen could be poised to skyrocket. But who is Amgen anyway, and is now the right time to invest?
Who Is Amgen?
Amgen was founded in 1980 as Applied Molecular Genetics, with a focus on recombinant DNA. It went public in 1983 and almost immediately started winning awards and accolades for its groundbreaking work. Today, Amgen manufactures an impressive range of drugs for numerous medical conditions, from Enbrel for arthritis to Otezla for plaque psoriasis. But it’s the company’s new weight loss drug, MariTide, that has investors most excited.
The weight loss market is absolutely massive, and it’s currently dominated by just two drugs: Ozempic and Wegovy. MariTide would not only bring competition to the table, but it has a couple of extra benefits for patients. Specifically, the medication would only require monthly, rather than weekly, injections. It also looks like it may be easier to keep the weight off after discontinuing the medication. MariTide is still in clinical trials, but it could be an enormous game changer after approval.
Zooming Out
Of course, Amgen is competing in a crowded pharmaceutical field. It’s also carrying a lot of debt, which worries some analysts. However, even outside of MariTide, Amgen continues to innovate. It recently got FDA approval for Imdelltra, a new therapy for advanced small-cell lung cancer. Some analysts believe that this drug alone could be worth up to $2 billion in peak revenue.
Despite its debt, Amgen is doing a good job of generating free cash flow. It’s projected to trim as much as $10 billion from its debt over the next five years. Amgen is currently trading at 15 times estimated future profits, making it a reasonable buy and hold prospect. It’s not likely to generate massive short-term payouts, but over the long run it has the real potential to be a steady growth stock.
Neither Lisa Fritscher nor Stocks.News have positions in this company.
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Lisa Fritscher
Contributing Writer
Lisa Fritscher has been a contributing writer for App.Stock.News since 2024. Lisa has been interested in investing since winning The Stock Market Game in high school. In more than a decade as a professional writer, she has written consumer-facing financial information and advice articles for a wide variety of publications. She has a Bachelor of Arts in Psychology from the University of South Flori...