Shares of Amgen (AMGN) are falling in after-hours trading after the biotech giant announced that a drug trial had failed and it had to recall one of its drugs due to visible particulates.
Steve Remich Amgen said that it had recalled prefilled syringes of Aranesp, its anemia drug, from overseas distributors. At the same time, Amgen said that its drug Kyprolis failed to meet the primary endpoint of its so-call FOCUS trial in patients with multiple myeloma, a cancer of plasma cells.
Piper Jaffray’s Joshua Schimmer doesn’t understand the fuss:
Investors hand-wringing over the missed endpoint and what it might mean for EU reimbursement or the increase in renal AE relative to the label miss the forest for the trees, in our view. These are small incremental factors since ASPIRE will drive the program forward and a missed trial is a missed trial; the Street expected the top line result. There is a risk in over-interpreting the implications of a missed trial.
Our global Kyprolis revenue estimate in 2020 is only $1B and yet we still see AMGN being able to comfortably deliver a 10%+ EPS CAGR through the end of the decade. Success of ASPIRE means our estimate may prove conservative, but the point is that Kyprolis is not a key driver of AMGN’s long-term outlook. Rather, its growing pipeline which includes evolocumab for LDL, romosozumab for osteoporosis, blinatumomab for ALL, AMG416 for hyperparathyroidism, T-vec for melanoma, AMG334 for migraine etc represent cumulatively multiple billions of dollars of upside to consensus.
Shares of Amgen have dropped 2.3% to $124.39 at 4:30 p.m. in after-hours trading. It gained 0.8% during normal trading hours.
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