It could be worse for Amgen Inc. (AMGN), it really could, look, they could be Gilead Sciences Inc. (GILD), which is facing serious problems right now thanks to a weak drug pipeline, as  you can see by the chart below. By contrast, Amgen's revenue is only stalling; it is not declining. And Amgen also has nearly $39 billion in cash and equivalents; the company can fix things by making an acquisition. 

GILD Revenue Estimates for Current Fiscal Year Chart

GILD Revenue Estimates for Current Fiscal Year data by YCharts

Amgen's Weakening Product Line

Amgen nonetheless doesn't have a whole lot of time to fix things. The company's problems started when its shares fell on March 17 following the release of data from its drug Repatha. The data showed a reduction in LDL cholesterol levels, but did not reduce the death rate. Things continued to spiral lower after the company reported first-quarter results on April 26, which missed analysts' revenue estimates while the company provided in-line revenue guidance.

The bad news didn't stop there. Amgen said that sales of its lead drug Neulasta, which stimulates the growth of white blood cells, grew only 2 percent to $1.210 billion. And revenue from Enbrel, which treats several chronic diseases including arthritis, fell 15 percent to $1.181 billion. The rest of the drugs in Amgen's portfolio individually generated less than $550 million apiece, leading to revenue that fell to $5.464 billion from $5.527 billion year over year. ( See also: Amgen cholesterol drug cuts heart attack, stroke risk but shares fall.)

The company noted that Enbrel, one of the company's longtime profit producers, faced increasing competition during the quarter and slow growth in the Rheumatology and Dermatology segment. Neulasta benefited from favorable changes in account estimates and net selling price, which were offset by lower unit demand. 

The disappointment train continues with Amgen's latest news, this morning when the company announced that Evenity, for postmenopausal women with Osteoporosis, is not expected to receive U.S. approval in 2017. 

Amgen has struggled so far in 2017, underperforming the sector as measured by the Nasdaq Biotech ETF (IBB ) and the SPDR S&P Biotech ETF (XBI), and the S&P 500. 

AMGN Chart

AMGN data by YCharts

The story for Amgen doesn't look that dissimilar to some of its larger biotech and pharmaceutical cousins, which also have faced slowing growth.

 

AMGN Revenue (TTM) Chart

AMGN Revenue (TTM) data by YCharts

It creates a conundrum for company's like Amgen: do they invest heavily in their pipeline and try to develop there way out of slowing growth, or do they look to acquire a smaller company further along in the development phase.

The mounting pressures come not only from stalling revenue growth but stalling EPS growth, which has been struggling over the past two years. 

AMGN Annual Actual EPS Chart

AMGN Annual Actual EPS data by YCharts

For the most part, the market seems to be pricing in these expectations, based on forward earnings multiples. 

AMGN PE Ratio (Forward) Chart

AMGN PE Ratio (Forward) data by YCharts

One can see that analysts are not expecting the big growth seen in the past at Amgen to continue. 

AMGN EPS Estimates for Current Fiscal Year Chart

AMGN EPS Estimates for Current Fiscal Year data by YCharts

Revenue growth is projected to stall as well. 

AMGN Revenue Estimates for Current Fiscal Year Chart

AMGN Revenue Estimates for Current Fiscal Year data by YCharts

There is a silver lining though to this story, but not immediately for Amgen. One company benefiting from today's disappointing Amgen news is Radius Health (RDUS), which was up nearly 9 percent. The company currently has a drug for the treatment of postmenopausal women with osteoporosis at high risk for fracture, an injection treatment called Tymlos. Meanwhile, the company also has a treatment of postmenopausal women with osteoporosis in a transdermal patch currently in development. The pop in Radius shares price is likely two-fold; one, it is a takeover target and two, less competition in the market.

It would be no surprise if one suitor for Radius, eventually, might be Amgen.

Michael Kramer is the Founder and Portfolio Manager of Mott Capital Management, LLC a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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