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Investing in Innovative Human Therapeutics Called Biotech
Posted on February 27, 2012 at 06:13 AM EST
I’ve got a low-risk high-reward buy long stock pick this week on biotech giant Amgen. I’m still thinking the market needs a much needed correction but it seems is not full-on short sell time just yet. Then again, maybe it happens this week. In any event there’s always some quality stocks with potential upside appreciation to trade and or invest in any market. Lets hope Amgen is one of those this week going forward. As a possible consolation, billionaire hedge fund manager George Soros bought into AMGN during the last quarter. In case Amgen or the market does reverse significantly, use the best risk tool available to you called stop-loss. You can always buy it back at lower prices if it does head lower.
Zacks Investment Research reports that Amgen is a step closer to acquiring Micromet, Inc. with the companies announcing the early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976. Amgen and Micromet said that the waiting period was terminated on February 14, a few days before the scheduled date of Feb 17.
Amgen had announced its intention to acquire biotech company, Micromet, at the time of releasing its fourth quarter results in January 2012. The companies signed a definitive merger agreement under which Amgen will acquire Micromet for $11 per share in cash or approximately $1.16 billion. The deal has been approved by the Boards of both companies and is scheduled to close later this quarter. The tender offer will remain open until midnight at the end of March 1, 2012, unless the offer is extended.
With this acquisition, Amgen is looking to expand its oncology portfolio. The company will not only gain access to Micromet’s pipeline, it will also acquire Micromet’s proprietary BiTE (Bispecific T cell Engager) antibody technology. The lead candidate at Micromet is blinatumomab, a BiTE antibody, currently in phase II development for acute lymphoblastic leukemia. The candidate is also being developed for the treatment of non-Hodgkin's lymphoma and has the potential to be developed for other hematologic malignancies. Solitomab, another candidate in Micromet’s pipeline, is in phase I studies for patients with advanced solid tumors.
Zacks Investment Research Has an Outperform on Amgen
Zacks currently has an Outperform recommendation on Amgen, which carries a Zacks #2 Rank (short-term “Buy” rating). The company’s guidance for 2012 was better-than-expected. Amgen is guiding towards earnings in the range of $5.90 - $6.15 per share on revenues of $16.1 - $16.5 billion. We are bullish on Prolia/Xgeva and we expect the company to utilize its cash towards share buybacks and acquisitions/deals that will help boost its pipeline and drive long-term growth.
Invest2Success Has a Buy Long Recommendation on Amgen
Buy Long Amgen – Ticker AMGN
Buy Entry: 65.78 to 68.12
Take Profit Areas: 74.49 to 76.18, 78.89 to 80.69, 82.90 to 85.01
Or Hold Long-Term - 2.10% Dividend Yield
Amgen Inc., a biotechnology medicines company, discovers, develops, manufactures, and markets human therapeutics based on advances in cellular and molecular biology for grievous illnesses primarily in the United States, Europe, and Canada. The company markets recombinant protein therapeutics in supportive cancer care, nephrology, and inflammation. Its principal products include Aranesp and EPOGEN erythropoietic-stimulating agents that stimulate the production of red blood cells; Neulasta and NEUPOGEN to stimulate the production of neutrophils, which is a type of white blood cell that helps the body to fight infections; and Enbrel, an inhibitor of tumor necrosis factor that plays a role in the bodys response to inflammatory diseases. The company also markets other products comprising Sensipar/Mimpara, a small molecule calcimimetic that lowers serum calcium levels; Vectibix, a monoclonal antibody that binds specifically to the epidermal growth factor receptor; and Nplate, a thrombopoietin (TPO) receptor agonist that mimics endogenous TPO, the primary driver of platelet production. In addition, it provides Denosumab, a human monoclonal antibody that targets RANKL, an essential regulator of osteoclasts. Further, the company offers product candidates in mid-to-late stage development in a variety of therapeutic areas, including oncology, hematology, inflammation, bone, nephrology, cardiovascular, and general medicine consisting of neurology. It markets its products to healthcare providers, including physicians or their clinics, dialysis centers, hospitals, and pharmacies; consumers; and wholesale distributors of pharmaceutical products. The company has various collaborative arrangements with Pfizer Inc.; GlaxoSmithKline plc; Takeda Pharmaceutical Company Limited; Daiichi Sankyo Company, Limited; Array BioPharma Inc.; Kyowa Hakko Kirin Co. Ltd.; and Cytokinetics, Inc. Amgen Inc. was founded in 1980 and is headquartered in Thousand Oaks, California.
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