The biotech industry can be attractive for several reasons. Many leading biotechs develop innovative, life-saving therapies, a business that will only be phased out once we find an all-purpose cure for all illnesses. Further, biotechs often deliver better-than-average financial results during economic downturns because the products they sell are considered necessary goods.
Of course, not every biotech company is worth investing in. Let’s consider two that are a buy this month, or in most months, for that matter: Amgen (NASDAQ: AMGN) and Sarepta Therapeutics (NASDAQ: SRPT).
1. Amgen
Amgen hasn’t been at its best over the past couple of years. Revenue growth has been slow, at best, regulatory progress hasn’t been as groundbreaking as it would have liked, and the new medicines tasked to replace older ones haven’t lived up to expectations, at least not yet. That includes Amjevita, the first biosimilar for Humira to be launched in the U.S.
Though AbbVie’s Humira hit peak annual sales of $21.2 billion, the fierce competition following its loss of patent exclusivity meant Amgen’s product was unable to generate enough sales to make a serious dent in the company’s total top line. It would be a mistake to give up on Amgen despite these issues. It is one of the largest biotechs and boasts a vast pipeline that should eventually lead to significant breakthroughs.
Like many leading drugmakers, Amgen is going after the weight loss market. The company delivered an encouraging phase 1 clinical trial for one of its leading candidates in this area, AMG133. The investigational medicine showed meaningful weight loss, and, importantly, patients were able to keep the weight off for up to 150 days after treatment ended.
That’s an important factor since, for many currently approved anti-obesity therapies, post-treatment durability is a bit of an issue that Amgen is looking to address. The biotech will also rely on a recent acquisition, that of Horizon Therapeutics, for about $28 billion. Horizon brings with it a portfolio of approved medicines and pipeline candidates, none more important…
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