Citi: Amgen's (AMGN.US) diversified business growth offsets decline in denosumab product revenue; pipeline execution will determine future prospects

Citi: Amgen's (AMGN.US) diversified business growth offsets decline in denosumab product revenue; pipeline execution will determine future prospects On Tuesday, November 3, after the U.S. market close, Amgen (AMGN.US) reported its third-quarter 2026 results. The report showed third-quarter revenue of $10.365 billion, up 8% year over year, above the market expectation of approximately $10.05 billion$10.07 billion. On profitability, non-GAAP earnings per share were $6.45, up 14% year over year, above the expected $5.77$5.79; the non-GAAP operating margin was 47.3%, up 0.2 percentage points year over year; free cash flow was $3.7 billion (versus $4.2 billion in the prior-year period). Product sales in the quarter were $9.883 billion, up 8% year over year. The six key growth products combined grew 27% year over year and accounted for more than 70% of product sales, with Repatha, EVENITY, TEZSPIRE, UPLIZNA, BLINCYTO and IMDELLTRA all achieving double-digit growth, and a total of 17 products exceeding $1 billion in annualized third-quarter sales scale. In a research note published after Amgen's results, Citi pointed out that Repatha (revenue $1.1 billion; $46 million above expectations; up 37% year over year) remains the clearest growth highlight, thanks to continued penetration in cardiology and primary care. At the same time, Evenity (revenue $751 million; $24 million above expectations), Uplizna (revenue $451 million; $71 million above expectations) and Imdelltra (revenue $406 million; $79 million above expectations) also provided additional growth momentum for the company. Tepezza (revenue $526 million; $66 million below expectations; down 6% year over year) was adversely affected by inventory destocking. Prolia (revenue $632 million; $48 million below expectations) and Xgeva (revenue $288 million; $39 million below expectations) continued to see revenue decline after biosimilar launches, hurt by lower volumes and net selling prices (down 45% and 47% year over year, respectively). However, the company's product portfolio remains sufficiently diversified to absorb short-term pressure. Amgen also raised its full-year 2026 guidance, lifting total revenue expectations to $38.9 billion$39.7 billion (from $38.2 billion$39.4 billion) and non-GAAP earnings per share expectations to $22.90$23.70 (from $22.30$23.50). Citi believes that Amgen's upward revision of full-year guidance further strengthens market confidence in its commercialization execution capability, but its forward valuation multiple increasingly depends on whether the R&D pipeline can deliver on expectations. In fact, despite good momentum in Repatha, the oncology business and the rare disease business, uncertainty related to Lp(a) and the blank period before the release of MariTide Phase III clinical data still keep the firm cautious. Citi maintains a "Neutral" rating on Amgen with a target price of $405. Citi said: 1) The diversification of the product portfolio continues to absorb the impact of declining denosumab product revenue, with Repatha and the rare disease business being the main growth drivers. 2) The core growth engines remain solid, with Repatha, Evenity, Tezspire, Uplizna, Blincyto and Imdelltra all delivering strong sales performance. 3) Compared with quarterly execution, dazodalibep, olpasiran and MariTide have a greater impact on the company's forward valuation multiple. It is reported that Amgen reported three positive Phase III results in the third quarter. Dazodalibep met the primary endpoint in the Phase III OASIS-301 study in systemic Sjgren's syndrome, with the monthly dosing group improving by 5.6 points and the quarterly dosing group by 5.2 points from baseline (placebo-adjusted improvements of 1.8 points and 1.4 points, respectively), and also met key secondary endpoints such as patient-reported dry mouth; a second Phase III study in symptomatic patients is expected to read out within the year, and management emphasized that the two populations were enrolled separately and that "it is difficult to directly extrapolate from the 301 study to the 303 study." TEZSPIRE met both primary endpoints of histological remission and dysphagia symptoms in a Phase III study in eosinophilic esophagitis, with efficacy maintained through 52 weeks. Daxdilimab met the primary endpoint in both dose groups in a Phase II study in discoid lupus erythematosus and will advance to Phase III. In the weight-loss area, MariTide's MARITIDE Phase III program completed enrollment in two sleep apnea studies and in a cardiovascular outcomes study during the quarter, and initiated the first of three Phase III studies in type 2 diabetes; the company said MariTide has the potential to become the first monthly-dosed weight-loss therapy requiring only 4 to 6 injections per year, and is conducting research on a home-use autoinjector pen.