Biotech Milestones preview (3): AMGN

Oil's dip below $52 is extremely bullish for the market. This event allows Fed to ease interest rate this year given more moderate inflation outlook. The money is rotated fast out of the oil and commodity market into tech and biotech names. The market may continue to remain strong if this sharp drop in the energy price is sustained. I want you to buy AMGN ahead of earning on 25th of January. The company is heading into the earning with low expectation and negative sentiment stemming from Roche litigation to defend the EPO franchise. The risk to award ratio is favorable and I see near term strength in the stock. Let us assess what to do just before the earning; till then stay long on AMGN. I believe 2007 will be the year for this stock to finally outshine.

AMGN

Description.
Large Cap biotech that develops proteins, monoclonal antibodies (MAbs) and small molecule drugs in areas including nephrology, cancer, and inflammation. Principle marketed therapeutics are Epogen and Aranesp (anemia), Neupogen and Neulasta (neutropenia), and Enbrel (rheumatoid arthritis and psoriasis). Key late stage pipeline compounds include: Denosumab (AMG-162), a fully human MAb to NF Kappa B (RANK) Ligand, in phase III for treatment and prevention of osteoporosis, non-metastatic prostate androgen ablation, and phase II for breast cancer related bone metastases and rheumatoid arthritis (RA); Vectibix (panitumumab, ABX-EGF), a fully human MAb to epidermal growth factor receptor (EGFr), for 3rd line colorectal cancer (CRC) and phase III with Avastin + chemo for 1st line CRC; AMG-706 kinase/angiogenesis inhibitor in phase II for gastrointestinal stromal tumor (GIST); AMG-531, a novel thrombopoietic in phase III for idiopathic thrombocytopenic purpura ITP; AMG 108, a MAb to IL-1r for inflammatory diseases; AMG 714, an anti-IL15 Ab for rheumatoid arthritis.

Milestone event.
Feb 20, 2007: FDA action for Roche's CERA for CKD anemia
1Q07: Vectibix PACCE (Pmab + Avastin + chemo in colon cancer) RR (January) and PFS data 1H07: Denosumab interim 2-year phase III results in PMO
1Q07: AMG 706 phase II metastatic thyroid cancer data
Mid-07: AMG-531 phase III pre- and post-splenectomy ITP data
2H07: Kepivance phase III oral mucositis data in solid tumors

My Take.
Premiere biotech company that is trading at a ridiculously low PE multiple. Massive stock buyback and more efficient manufacturing abroad will improve earning leverage despite the increased R&D expense. Highly attractive emerging pipeline in oncology area. Be patient and you will be rewarded. Strong buy with target price at $100.

The current stocks in that I cover are: Filthy Rich Tech ideas (comprised of Openwave, Avid Technology, Tivo, IBM, and Research in Motion), Filthy Rich Biotech ideas (comprised of Amgen, Celgene, Genzyme, Isis pharmaceuticals, Alnylam pharmaceutical, and Protein Design Lab), Filthy Rich Financial ideas (JP Morgan and Goldman Sachs), Filthy Rich China ideas (Focus Media Holding and Ctrip.com), Filthy Rich Transportation ideas ( American Airline and Southwest Airline), and Filthy Rich Specialty Retail ideas (Peet's coffee)

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