The Amgen stock price suffered a harsh reversal in the fourth quarter of 2024 as its weight loss drug failed to excite. After peaking at $341 in July, the stock plunged by over 25% to the current $260. So, is Amgen a good healthcare stock to buy in 2025?
Amgen stock plunged after weight loss disappointments
The main reason why the Amgen share price crashed is that MariTide, its experimental weight loss drug failed to outperform those of Eli Lilly and Novo Nordisk. Data released in October showed that the drug helped patients lose 20% of their weight in the first year. The number needed to be at least 25% for it to compete with its top rivals.
The weight loss industry has become one of the most profitable and popular sectors in healthcare. It will help Eli Lilly become a $1 trillion company in 2025.
Its performance has pushed more companies to innovate and develop better drugs to compete with those of Novo and Lilly.
However, a company like Amgen will do well even without a presence in the weight loss industry. Besides, there are signs that the sector is starting to slow as evidenced by the Novo Nordisk stock, which has crashed by over 40% from its highest level in 2024.
Also, Amgen’s weight loss drug had little chance to gain market share because of Lilly’s and Novo’s dominance. Data shows that Lilly’s Zepbound has about 40% share in the US. Combined, the two firms control about 68% of the market, and it will be very difficult for other drugs to gain market share.
Amgen business is doing well but faces risks
Amgen is in a difficult situation. While its business is doing well, it faces substantial risks related to its patent expiry. It needed its weight-loss drug to replenish its patent-expiry drugs.
The most recent financial results showed that Amgen’s revenues rose by 23% in the third quarter, with ten drugs having at least double-digit sales. The success was mainly due to drugs like Tezspire, Blincyto, Evenity, and Tavneos.
The company’s sales growth was mainly due to its $28 billion acquisition of Horizon Therapeutics. Excluding this buyout, Amgen would have had about 8% revenue growth, which was an equally good one.
Repatha and Evenity sales jumped by 40% and 30% during the quarter, while Blincyto jumped by 49%. Tezspire’s revenue rose by 67%, while Tavneos sales doubled because of higher volume.
Analysts expect Amgen to continue developing its weight loss drug or even make a major acquisition this year. Many smaller companies are developing similar products, and some of the most potential companies to buy include Viking Therapeutics and Structure Therapeutics.
Wall Street analysts are upbeat about the Amgen stock price and its business despite the many challenges. The expectation is that its revenue for 2024 will be $33 billion, followed by $34.36 billion in the next financial year.
The Amgen stock price forecast is $322, higher than the current $260, pointing to more gains ahead.
Amgen stock price analysis
The daily chart shows that the AMGN share price peaked at $341 in 2024 and then plunged to $255 last year. It has formed a death cross chart pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. This is one of the most bearish patterns in the market.
The stock has also moved below the 50% retracement point. On the other hand, it has found support at $255, which coincides with the 61.8% retracement and the lowest swing in April 2024. It also fell below the key support at $276, its highest level in 2022.
There are signs that the stock has formed a falling wedge chart pattern, a popular bullish reversal sign. Therefore, a contrarian case can be made of the stock. If this happens, the next point to watch will be at $276, which is about 6% above the current level. It could also rebound to the psychological point at $300.
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