Amgen Faces Challenges Amid Market and Regulatory Uncertainties

Amgen’s AMGN stock has experienced a decline of 10.4% in the past three months, largely driven by overall macroeconomic uncertainty. The market has been volatile since early April, when President Trump introduced substantial tariffs, prompting retaliatory measures from China.

Trade Tensions and Economic Impact

Recently, a deal between China and the United States alleviated some trade tensions, leading to a rebound in the stock market. However, the suspension of these tariffs is temporary, creating continued uncertainty about future economic conditions. While pharmaceuticals were exempted in the first round of tariffs, they may not escape future rounds, especially given Trump’s objective to bring pharmaceutical manufacturing back to the U.S.

AMGN’s Strengths and Weaknesses

To understand how to approach AMGN stock in this uncertain environment, consider the company’s strengths and challenges. Amgen’s revenues grew by 9% year-over-year in the first quarter of 2025, driven by rising patient demand for its medicines. However, the company faces declining revenues from oncology biosimilars and older products like Enbrel. Competitive pressures and pricing headwinds are affecting many offerings, including key brands like Otezla and Lumakras. Thankfully, revenues from older drugs like Prolia, Repatha, and Blincyto, as well as newer medications like Tavneos and Tezspire, are driving overall growth.

Pipeline Developments

Amgen has made significant investments in mergers and acquisitions over the past decade, expanding its product portfolio and pipeline. The company is developing MariTide, a GIPR/GLP-1 receptor drug, designed for convenient monthly dosing. This sets it apart from Eli Lilly’s and Novo Nordisk’s weekly injection drugs.

Clinical trials have suggested that MariTide can offer sustained weight loss and improve cardiometabolic health. Notably, Amgen has initiated two phase III studies on MariTide in obesity, with more expected to launch throughout 2025.

Emerging Products and Sales Performance

Amgen successfully launched several new biosimilar products that achieved notable sales in early 2025. Wezlana, the first biosimilar of Johnson & Johnson’s Stelara, generated $150 million in sales during its first quarter. Amgen also introduced Pavblu, a biosimilar version of Regeneron’s Eylea, with first-quarter sales of $99 million. In total, Amgen’s biosimilars generated $735 million in the first quarter, marking a 35% increase year-over-year.

Upcoming Challenges for Key Products

Despite these successes, Amgen faces challenges with key drugs Prolia and Xgeva, as patents for their RANKL antibodies expired in February 2025 in the U.S. and will expire in November 2025 in some European markets. Sales are expected to dip significantly in the latter half of 2025 due to this patent erosion.

Sales of Amgen’s rare disease drugs, particularly Tepezza, are also showing signs of slowdown. Moreover, upcoming changes in the Medicare Part D program could negatively impact the sales of drugs like Enbrel and Otezla starting in 2026 and 2027, respectively.

The combination of pricing pressures and competitive challenges creates uncertainty around AMGN’s revenue from certain key products.

Amgen Stock Outperforms Industry Amid Rising Earnings Estimates

Amgen’s Stock Performance Versus Industry

Amgen’s stock has increased by 7.3% this year, while the industry has seen a decline of 3.1%. The company has outperformed both the sector and the S&P 500 index, as illustrated in the chart below.

AMGN Stock Outperforms Industry, Sector & S&P 500

Image Source: Zacks Investment Research

Valuation of Amgen Stock

From a valuation perspective, Amgen appears reasonably priced. Its shares currently trade at a price/earnings ratio of 13.12 forward earnings, which is lower than the industry average of 14.74. Additionally, the stock is below its five-year mean of 13.80.

AMGN’s Earnings Estimate Movement

Image Source: Zacks Investment Research

Future Earnings Projections

The Zacks Consensus Estimate for earnings has increased from $20.59 to $20.79 per share for 2025 over the past 30 days. For 2026, estimates rose from $21.19 to $21.23 per share in the same period.

Investment Outlook for Amgen Stock

Considering the factors above, Amgen is well-positioned for long-term revenue growth. This growth is supported by strong demand for key drugs—Repatha, Evenity, and Prolia—as well as promising contributions from newer medicines such as Tezspire, Tavneos, and Imdelltra. Despite initial data from the MariTide studies falling short of expectations, there remains potential for MariTide to significantly impact Amgen’s fortunes.

Given these aspects, Amgen’s rising estimates, reasonable valuation, and solid stock price appreciation offer compelling reasons for current investors to retain their positions. The stock holds a Zacks Rank of #3 (Hold).

This article originally published on Zacks Investment Research (zacks.com).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.