Amgen is entering a pivotal period the as it moves beyond its Enbrel franchise and repositions around obesity, rare disease and next-generation oncology. While Enbrel has entered a period of decline due to Medicare pricing reform, management has demonstrated credible execution in replacing that cash flow with a higher-quality pipeline. Early success from the Imdelltra launch in lung cancer , Horizon rare-disease portfolio and accelerating confidence behind the MariTide obesity program are reshaping Amgen from a defensive dividend payer into a growth story. With improving revenue mix and multiple pipeline catalysts ahead, Amgen presents an increasingly compelling risk-reward profile for investors willing to take on clinical execution risk. Trade timing and outlook AMGN recently broke above its long-standing $310 resistance level and successfully retested that zone as support, signaling renewed institutional demand. The stock has begun to outperform the S & P 500 on a relative basis, suggesting improving conviction to our $360 target. Fundamentals Amgen’s fundamentals remain strong relative to the broader industry, providing a stable foundation beneath its higher-risk growth initiatives: Forward P/E ratio: ~15x vs. industry median ~14x Net margin: ~19% vs. industry median ~16% Free cash flow generation: +$10 billion supporting both dividends and debt reduction Balance sheet: ~$6 billion in debt retired in 2025 following the Horizon acquisition While near-term growth rates lag smaller biotech peers, Amgen’s profitability, scale and cash generation offer downside protection as the pipeline matures. Bullish thesis MariTide reframes long-term growth: MariTide in Phase 3 trials with potential monthly or quarterly dosing — addressing one of the largest pain points of existing GLP-1 therapies. Rare disease portfolio delivering leverage: The Horizon acquisition is beginning to justify its strategic rationale. Tepezza returned to double-digit growth (+15% year over year in Q3), while Krystexxa remains a durable, high-margin franchise. Oncology execution underappreciated: Imdelltra’s rapid launch trajectory up 33% sequentially remains highly effective in specialty oncology markets. Biosimilars provide a meaningful growth: Amgen’s biosimilar portfolio grew over 50% year over year and is annualizing near $3 billion in revenue. Key risks Margin compression: Research and development expenses surged 31% year over year as Amgen funds late-stage trials; sustained cost pressure could weigh on earnings through 2026. Legacy erosion pace: Enbrel’s ~30% year-over-year revenue decline resets expectations, but slower-than-expected stabilization would pressure near-term cash flow optics. Options trade To express a bullish view while maintaining defined risk, I prefer buying a Feb $330/$365 call vertical @ $10.17 debit. This entails: Buying AMGN Feb $330 call @ $12.93 Selling AMGN Feb $365 call @ $2.76 Trade characteristics Maximum risk: $1,017 if AMGN is below $330 at expiration Maximum reward: $2,483 if AMGN is at or above $365 at expiration Breakeven: ~$340.17 View this Trade on OptionsPlay for Updated Prices Amgen is evolving into an upside play on obesity, rare disease, and oncology growth engines. MariTide introduces meaningful binary upside, but investors are partially protected for that risk through strong cash flows. With an improving technical picture AMGN offers an attractive, asymmetric risk to reward using this defined risk options strategy. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
