Amgen set to lose 40% of revenue from patent cliff

[anonymous]

Layoffs baby and a golden parachute for Bob Bradway!

http://seekingalpha.com/article/3960839-40-percent-amgen-sales-due-fall-patent-cliff

Assessing Patent Cliff Risk at Amgen

I now present a table of Amgen products with the respective 2015 Q4 Revenue Growth Rate, FDA Approval Date and US Patent Expiry Date for each product.

Product Growth FDA Approval Expires
Kyprolis 63% 2013 2025
Xgeva 10% 2010 2025
Vectibix 2% 2006 2020
Nplate 15% 2008 2022
Neulasta -2% 2002 2015
Neupogen -4% 1991 2013
Enbrel 8% 1998 2029
Prolia 21% 2010 2025
Epogen -37% 1989 2015
Aranesp 4% 2001 2024
Sensipar 21% 2004 2016
The patents on 4 products have expired or are about to expire: Neulasta, Neupogen, Epogen and Sensipar. I will call this group of products the "Patent Cliffers." I will compare the Quarterly Sales Performance of the Patent Cliffers to Quarterly Sales Performance of Amgen's other products that generally have a robust patent expiry period ranging from 2020-2025 and beyond.



The above forecast comes with several caveats:

1. EU patents expire a lot sooner in most cases, although 80% of Amgen's sales are in the US
   

1. The forecast is framed very much with patent expiry risk in mind and does not consider other major risks like bio-similars, competitive products or pricing pressure.
   

1. The forecast does not consider Amgen products which have less than $100 million of quarterly sales. These "small-sale" generators may well become major contributors in the coming years.
   

1. The forecast does not consider potential sales of products and treatments in the pipeline that may be about to gain FDA approval and launch on to the market in a number of years.
   

The forecast nonetheless gives us an idea of what Amgen must achieve in the coming years to maintain sales at $20 billion per annum that in turn underpin the Free Cash Flows, Earnings, Dividend and ultimately the current price of the stock.

 

[anonymous]

Uh oh.