If you're looking for a top healthcare company to invest in, you may want to consider looking at one that has multiple fast-growing products in its portfolio. By seeking out diversified growth stocks, you can minimize your risk and reduce significant volatility. If a company has a diverse product mix, it has many ways to grow its operations without being too dependent on a single asset.
Amgen (NASDAQ: AMGN) is coming off a strong quarterly performance in which multiple drugs generated double-digit growth. And even better, its growth prospects could get even better in the future.
Amgen has many fast-growing drugs in its portfolio
On Aug. 6, Amgen reported strong second-quarter results for the period ending June 30. Product sales came in at just over $8 billion and rose by 20% year over year. The diversity of the company's portfolio is striking, led by the osteoporosis medication, Prolia, which not only generated $1.2 billion in revenue but grew at a solid clip of 13% year over year.
In total, 12 drugs from Amgen's stable generated double-digit revenue growth.
Other than Prolia, these five drugs stand out for generating sales of at least $200 million while growing at least 10% year over year (not including new drugs that didn't contribute revenue in the prior-year period):
| Product | Revenue | Year-Over-Year Growth Rate |
|---|---|---|
| Repatha | $532 million | 25% |
| Evenity | $391 million | 39% |
| Nplate | $346 million | 12% |
| Blincyto | $264 million | 28% |
| Tezspire | $234 million | 76% |
Data source: Company filings.
Additionally, Amgen has been using acquisitions to help grow and expand its pipeline over the years. In 2022, it acquired ChemoCentryx for $3.7 billion and last year it closed its mammoth $27.8 billion acquisition of Horizon Therapeutics, which gave it access to a promising treatment in Tepezza, which treats thyroid eye disease.
At its peak, Street analysts expect the Horizon acquisition to generate close to $4 billion in annual sales. Last quarter, Tepezza's sales totaled $479 million, and is quickly becoming one of the company's top selling drugs.
A bigger growth catalyst could be coming for Amgen
As good as Amgen's growth numbers are, they could look even better in the future. That's because the company is working on developing a promising weight loss treatment in MariTide. The anti-obesity market could be worth a staggering $100 billion and while Eli Lilly and Novo Nordisk dominate it today, Amgen could become a serious competitor in the future.
Currently, MariTide is still in phase 2 trials, and that means it could be multiple years before it potentially hits the market. However, what's encouraging about this candidate is that patients may only need to take it on a monthly basis, unlike treatments such as Wegovy and Zepbound that need to be taken weekly. Importantly, the clinical trial data suggests that patients keep the weight off even after they stop taking the drug, unlike other weight loss medications.
While MariTide is still in the early stages of its development, it holds a lot of promise. If patients can take it less often while not having to worry about regaining weight after stopping the treatment, this could become one of the better weight-loss candidates on the market.
Is Amgen stock a no-brainer buy?
Shares of Amgen are trading at more than 50 times their trailing earnings but only 17 times based on analyst estimates of future profits. The stock's price-to-earnings growth ratio is above 2, which suggests that it may be expensive, even when factoring in its future growth prospects. But if MariTide obtains approval, those growth prospects would be in line for a huge upgrade.
Amgen's business looks good, but its valuation may be a tad high, which is why it may not be a slam-dunk buy right now. It can make for a good investment and its 2.8% dividend yield sweetens the deal for long-term investors. But the stock's gains are likely going to be dependent on how successful MariTide proves to be. If it's a winner, the healthcare stock could potentially double in value within five years. If it falters, however, then there could be the risk of a sell-off.
There's some risk with Amgen due to the hype and excitement around weight loss treatments. But if you're comfortable with that, then this may be a stock worth adding to your portfolio today.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Amgen and Novo Nordisk. The Motley Fool has a disclosure policy.
