Motley Fool: Amgen hopes new drugs drive success
Amgen (Nasdaq: AMGN) is a biotech blue chip stock “on the cusp of a new product cycle,” according to company management. If all its pieces fall into place, the company should break a long dry spell with several new drug launches.
Indeed, Amgen is projected to deliver data on or file new drug applications for 10 late-stage products by 2016. Its powerful Repatha cholesterol drug has been recommended for Food and Drug Administration approval. Its talimogene laherparepvec, or “T-Vec,” drug is particularly interesting, as it’s an immunotherapeutic product for metastatic melanoma, with an approval possibly leading to numerous T-Vec drug combinations being tested.
Amgen also sports some recently approved drugs, such as Blincyto, which treats patients with a rare form of acute lymphoblastic leukemia. This is exciting because Blincyto is an immunotherapy product in a category of therapies expected to grow briskly. The FDA also approved Amgen’s Corlanor to treat people with chronic heart failure. Meanwhile, Amgen reported some promising data for drugs treating colorectal cancer and migraines.
A rosy future isn’t guaranteed, since Amgen faces competition on many fronts. Still, it offers many reasons to be hopeful, along with a dividend that recently yielded 2.1 percent and a forward-looking price-to-earnings (P/E) ratio in the mid-teens. Amgen’s stock should be of interest to long-term investors.
Ask the Fool
Q: What are some clever ticker symbols? – J.R., Salisbury, Maryland
A: There are many. For example, there’s 3M (MMM); Yum! Brands (YUM), the parent of KFC, Taco Bell and Pizza Hut; Brinker International (EAT), the parent of Chili’s; explosives specialist Dynamic Materials (BOOM); Molson Coors Brewing (TAP); Asia Tigers Fund (GRR); Gibraltar Industries (ROCK); National Beverage (FIZZ); Sotheby’s (BID); Olympic Steel (ZEUS); and amusement park company Cedar Fair (FUN).
Before eyewear maker Oakley was bought out, it traded under the symbol OO. (Think about it, if you don’t get it at first.) Also interesting: Oil and gas company Denbury Resources has an alarming ticker: DNR. Southwest Airlines’ is LUV.
My dumbest investment
One of my dumbest investments was a young company called Intuitive Surgical. A Motley Fool writer wrote a great article about it, and it left me with such a good impression that I purchased 3,000 shares at about $17 each (yes, that’s about $50,000).
For the next two years, I watched the price fluctuate between $17 and about $12. I eventually got so tired of watching that deadbeat that the first time I got a little pop (to around $18), I sold the entire position. Well, the stock has been trading around $485 per share recently, so you do the math. I definitely left a lot on the table.
By the way, less than a year later, Fool co-founder David Gardner was recommending the stock to his newsletter subscribers at about 2.5 times my sale price. Unfortunately, I found it difficult to buy back something I just sold, so I never added the stock back to my portfolio … D’oh! – R., online
The Fool responds: You would have made more than a million dollars had you hung on, but selling was the right thing to do if you no longer had faith in the company. Intuitive Surgical (Nasdaq: ISRG), which makes and sells robotic surgical equipment, has been volatile, but long-term believers are counting on more and more hospitals buying its machines over the coming years. (The Motley Fool owns shares of Intuitive Surgical and has recommended it.)