Amgen’s Story Gets Better And Better

| About: Amgen Inc. (AMGN)

It has been almost two weeks since I wrote about Amgen (NASDAQ:AMGN) being a bargain. Since then, the story has only improved for Amgen and its shareholders.

Since the first posting, Amgen has agreed to acquire two privately held bio-tech companies using cash. On the 4th of June, Amgen agreed to buy Santa Clara based Ilypsa for $420 million in cash. The acquisition adds Ilypsa’s main product, Ily101, which is designed to treat hyperphosphatemia in chronic kidney disease in patients on hemodialysis to Amgen’s already strong pipeline.

In addition, Amgen also acquired Cambridge,Mass based Alantos Pharmaceuticals for $300 million in cash. The acquisition adds ALS 2-0426 (Phase II), a type 2 diabetes drug to Amgen’s pipeline. As an Amgen shareholder, I do not see any problems in these two acquisitions. It is obvious the company is diversifying from its anemia drugs just in case the impact on sales is greater than expected.

Speaking of its Anemia drugs, news came out of the American Society of Clinical Oncology [ASCO] meeting to what many (except analysts) have known, the debate over Anemia drug safety is overblown. According to Dr. Charles Bennett, hematologist-oncologist at Northwestern University, when the drug is used on label, there are no hidden safety signals. Although Dr. Jeffrey Crawford, professor of oncology at Duke University Medical Center, acknowledges risks for certain patients, he feels “confident” with the current guidelines of use.

In addition to these events, Amgen stated that it's in-line with projected 2007 earnings of 4.30/share. This of course is subject to change in August if the Centers for Medicare and Medicaid Services [CMS] decides to impose huge limits on anemia treatment coverage.

Finally, the “Gurus” are buying Amgen. David Dreman, Bill Miller, Richard Pzena and Brian Rogers now have a position in Amgen. This gives me an added confidence that my analysis is somewhat in line with those that I admire, especially David Dreman whose philosophy I follow. I guess I am a good student.