Amgen, Inc. (AMGN) went public on June 17, 1983, for $18 per share. Since its initial public offering (IPO), the stock has split five times. If you had invested $1,000 at the time of Amgen's IPO, your investment would have grown to be worth $780,692 as of April 17, 2020, without reinvesting dividends. This is an annual rate of 19.81%.
The History of Amgen
Amgen began as AMGen, which stood for Applied Molecular Genetics, in 1980. In the early years, the company attempted a wide variety of scientific breakthroughs, such as organisms that could extract oil from shale, cloning the light source of fireflies, making specialty chemicals, and growing chickens faster.
By 1983, the company began to focus on treating and curing diseases. By finding and cloning the erythropoietin gene, the company created its foundational product, Epogen. Epogen was approved by the Food and Drug Administration (FDA) in 1989 to treat low red blood cell counts caused by kidney disease. In 1985, the research that enabled the company's second very successful product, Neupogen, was complete. In 1991, the FDA approved the use of Neupogen to support cancer patients' immune systems.
Amgen has made several key acquisitions. In 2002, the company acquired Immunex, the developer of Enbrel, which is used to treat five major diseases. Amgen also acquired a manufacturing plant in Rhode Island and quickly met the demand for Enbrel. In 2011, the company acquired the developers of talimogene laherparepvec, BioVex, which is used to treat melanoma tumors. In 2012, Amgen acquired deCODE Genetics, a leader in human genetics. Then in 2015, it bought Dezima Pharma and Catherex. In 2019, the company made two additional acquisitions: Nuevolution, a pharmaceutical company focused on cancer and anti-inflammatory drugs, and Otezla, an arthritis drug made by Celgene.
As of 2019, eight products make up the vast majority of revenue for Amgen.
Enbrel is the company's biggest seller, with sales of $5.2 billion in 2019; 30% of Amgen's revenues. The drug treats severe arthritis and other inflammatory diseases. Neulasta is the second biggest seller, with $3.2 billion in revenue; 19% of total revenue. The drug is used as a white blood cell stimulant. Enbrel and Neulasta make up approximately half of Amgen's sales.
Xgeva and Prolia are both used as therapies for osteoporosis and bone protection, and both account for 27% of Amgen's revenues. Aranesp is used to treat low red blood cell counts caused by chronic kidney disease and makes up 10% of revenues. Epogen caters to dialysis patients, used to treat anemia caused by CKD and is 5% of revenues. Kyprolis is a cancer treating drug that accounts for 6% of revenues. Both Sensipar and Mimpara help with the management of parathyroid hormones, phosphorus, and calcium, and are the smallest contributors to Amgen at 3.2% of revenues.
Dividends and Splits
Amgen began paying its quarterly dividend in 2011 and has increased it annually ever since. Due to the late start for the company's dividend, it would not have increased an investor's return significantly. Dividends are paid quarterly and started at $0.28 in 2011 and as of March 2020, are $1.60.
By investing $1,000 during Amgen’s IPO, you would have held 55.55 shares. Adjusted for the five stock splits (four two-for-one and one three-for-one), you would hold 2,666.66 shares today, not accounting for dividend reinvestment.
Amgen continues to serve patients by using biotechnology and science to create treatments that can cure diseases, save lives, prolong life expectancies, and improve a patient's quality of life. Amgen continues to look for strategic acquisitions and to improve its manufacturing capabilities, which could boost margins.
As of 2020, the company has 20 products in its phase three pipeline. By remaining on the cutting edge of biotechnology and science, Amgen can continue to develop treatments for major diseases that have few available treatments. This allows the company to serve a niche with little competition and also charge a premium for its products.
From chronic heart failure to asthma, lung cancer, and episodic migraines, Amgen continues to pioneer treatments for cases where treatment is either ineffective in significantly prolonging the life of the patient or where previous treatments do not provide patients with a proper quality of life.