(By Balachander) UBS Securities lifted its price target on shares of Amgen Inc. (NASDAQ:AMGN) to $71.00 from $69.00, while maintaining "Neutral" rating on the stock.
UBS is of the view that a lack of visibility into organic revenue drivers/pipeline development tempers its enthusiasm for AMGN shares. That said, the risk/reward is likely positive ahead of the Sensipar ph3 EVOLVE data, as well as the potential for operating the business with improving margins.
The brokerage has updated its AMGN model following quarterly results to reflect what it believes are product trends going forward. UBS increased its 2012 Neulasta and Enbrel estimates to $3,936m and $4,166m following increased demand as well as meaningful price increases for Enbrel.
UBS also raised its Xgeva estimate to $769m (from $697m) and lowering its Prolia estimate to $497m following 1Q results.
"We are below consensus revenue expectations for 2014-15 (-2% in FY14E, -4% in FY15E) despite a bullish outlook on the Xgeva franchise. Central to our bearish view is that expected competition from Teva and Sandoz biosimilars (and possibly others) will impact Amgen's $5bn+ G-CSF franchise," UBS wrote. "We note last year's settlement with Teva, as well as ongoing trials for Sandoz's Neupogen and Neulasta competitors, which we believe could enter the market as early as 2014."
AMGN shares, which have been trading in the 52-week range of $47.66 to $71.05, added 1.15% to trade at $71.00 on Thursday.