Amgen Stock (NASDAQ:AMGN)
After the pharmaceutical giant Amgen (NASDAQ:AMGN) announced its largest-ever acquisition, a deal to purchase the Irish biotech Horizon Therapeutics (NASDAQ:HZNP) for almost $27.8B in cash, Amgen stock traded down for the fourth consecutive session on Tuesday.
Since AstraZeneca (AZN) agreed to pay $39 billion for Alexion Pharmaceuticals, a medication company with a focus comparable to Horizon’s (HZNP), the deal involving rare illness specialist Horizon (HZNP) is the largest pharmaceutical merger and acquisition transaction to have taken place since then.
Tim Anderson, an analyst at Wolfe Research, noted in a report published following the arrangement, “Given the anticipated erosion of Amgen’s base business, it is not unexpected that the company is seeking bigger acquisitions.” The expert continued, “Most of the time, corporations have future voids to fill that undertake larger transactions.”
Amgen has decided to maintain its previous guidance for the years 2022 and 2030 despite the possibility that the acquisition may be finalized during the first half of 2023. This is because the company anticipates that the new addition will improve its revenue and non-GAAP earnings per share beginning in 2024.
On the other hand, the management ruled out balance sheet issues after the purchase by signaling intentions to pay off $10 billion in debt by 2025.
In the meantime, Wells Fargo has reaffirmed its Equal Weight rating on the stock, even though analysts led by Mohit Bansal have stated that the price the company agreed to pay for Horizon (HZNP) stood at the low end of the estimated range for that price. Bansal said that the statement was made even though Wells Fargo has reaffirmed its rating on the stock.
However, given Amgen’s (AMGN) presence in international markets, the team anticipates near-term revenue synergies and estimates long-term value if the business can extend patent protection for Horizon’s (HZNP) best-selling medicine Tepezza with a future subcutaneous version of the infusion.
Featured Image: Megapixl @ Andreistanescu
Author Shariq Khan 
