Should You Invest in Amgen?

PHOTO CREDIT: Amgen

OVERVIEW

Amgen Incorporation is a company based in the United States. The company designs, develops, manufactures, and sells various therapeutic and other biotech products around the world. Some of the company’s focus products are used for bone strength, inflammation, and cardiovascular diseases. The company was founded in 1980.

Why You Should?

  1. Amgen is a good reopening play in an investor’s portfolio. As the pandemic comes to an end, the company saw a drop in demand for their products as people did not visit the doctor’s office at normal intervals and postponed any elective/voluntary procedures and visits. This return will help the company grow its sales.
  2. Amgen, like other biotech and pharmaceutical companies, is an extremely profitable business. The company has a gross profit margin of 75% (calculated by (revenues-cost of goods sold) / revenues). This high-profit margin will benefit the company in the future and will also help the company return money to investors.
  3. Amgen has a strong line of current products and drugs. This will help the company report strong results in the short to mid-term and will also help them research and develop the therapeutics and profits for the future. Some of these drugs include Enbrel, Neulasta, and Prolia.
  4. Amgen also has a strong outlook in terms of new therapeutics. Some of these therapeutics will be used to cure cancer and other diseases. This outlook will help the company’s long-term growth and will also benefit investors who are looking for a long-term investment option in the company.

Why You Should Not?

  1. The company faces tough competition in the biotech and pharmaceutical industry. Some of these competitors include Abbvie, Regeneron, Merck, Eli Lilly, and many others. This competition might hurt the company and its investors in the future.
  2. A negative political environment will also hurt the company. Controlling drug prices and increasing regulation on big pharma companies like Amgen have been popular talking points for both sides of the aisle. This might hurt the company in the event of any additional regulation passes.
  3. The COVID-19 pandemic has negatively impacted the company. As people stayed indoors and stopped visiting the doctor and put off elective procedures, the company saw a drop in new customers. This will company until the markets where it operates are no longer impacted by the pandemic.

MY OPINION

I think that Amgen is a great long-term investment due to its position as a good reopening play, a strong line of current drugs, an extremely profitable business, as well as a strong future outlook. However, tough competition, negative impacts from the pandemic, and a negative political environment might hurt the company and its investors.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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