Home » Bear Case Scenario » Bear Case Scenario Amgen $AMGN, $NVO, $GILD, $RHHLVF

Bear Case Scenario Amgen $AMGN, $NVO, $GILD, $RHHLVF

Amgen (Nasdaq:AMGN) is about to release earning results. Ponder this Bear Case Scenario as you contemplate management comments.

Generic off patent versions of Amgen’s Epogen and Neupogen have invaded the European market. These biosimilars are certain to have a larger impact in years to come. Patents are expiring and a U.S. regulatory pathway for biosimilars is finalized. Margin compression coming soon.

Epogen reimbursement from Medicare  is now bundled with other dialysis drugs, which creates an incentive to cut use.  Medicare is the chief payer for dialysis patients in the U.S.

Recent clinical data has brought the safety of the entire ESA class of drugs into question. This has lead to reimbursement cuts, restricted drug labels, and severe pressure on Amgen’s revenue growth.

George Gutowski writes from a caveat emptor perspective.