Healthcare · Biotech
Amgen (AMGN)
The diversified large-cap biotech where earnings still anchor value: FY2025 revenue of $36,751M, Prolia at 12.0% of sales and FCF of $8.1B.
Selborne Research · · Equity Research Profile
Educational analysis for professional use. This profile is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
Snapshot
- FY2025 Revenue
- $36,751M
- Prolia (Largest Product)
- $4,414M (12.0%)
- GAAP Net Income
- $7,711M
- Free Cash Flow
- $8.1B
- R&D
- $7,272M
- Cash Runway
- N/A (FCF-positive)
Business Overview
Amgen is the biotech where earnings-based valuation still works, because no single product dominates. FY2025 revenue was $36,751M, GAAP net income $7,711M and free cash flow $8.1B. The largest product, the osteoporosis drug Prolia, brought in $4,414M, or 12.0% of revenue. Cash and equivalents were $9.1B at year-end 2025.
That 12.0% is the lowest lead-product share among the six companies in the concentration guide (Vertex's cystic fibrosis drugs 92.9%, Moderna's COVID vaccines 93.1%, Gilead's HIV drugs 70.5%, Regeneron's Dupixent profit share 36.5%, BioMarin's VOXZOGO 28.8%). Losing one product hurts Amgen the way it hurts a large pharma company. Free cash flow is positive, so runway maths do not apply.
How the Numbers Read
R&D was $7,272M in FY2025, funding both biosimilars (copies of other companies' off-patent biologic drugs) and new drugs, paid for by the established product base. The largest programme named in the FY2025 results is MariTide (maridebart cafraglutide, AMG 133), with Phase 3 studies in obesity and type 2 diabetes under way in 2026.
Passing Phase II is the biggest hurdle in drug development: 28.9% of programmes moved from Phase II to Phase III in the BIO 2011-2020 study the model uses (see the phase success guide). Analyst peak-sales estimates for MariTide (~$2.1-3.7B by 2030) are unfiled assumptions, and they diverge widely because the obesity market is crowded.
Valuation Framework
Start with earnings on the diversified base ($7,711M FY2025 GAAP net income), then add a risk-adjusted NPV (rNPV) for disclosed pipeline programmes (MariTide and others) at the model's 10.0% discount rate, with the probability of approval in the cash flows. With only 12.0% on Prolia, reported earnings carry more of the value than at Vertex or Gilead.
Amgen's revenue is mostly its own product sales, unlike Regeneron's Dupixent profit share (see the partnership guide).
What to Watch in the Financials
Prolia's share (12.0%). Far below the high-concentration range; watch whether any one line nears 25-30% as new launches scale.
MariTide Phase 3 readouts. The obesity and type 2 diabetes studies are the largest swing in pipeline value. Enter peak sales as clearly labelled estimates.
Free cash flow ($8.1B) against R&D ($7,272M). Product cash covers pipeline spend, so earnings and pipeline progress, not liquidity, carry the valuation.
Key Risks
Obesity pipeline attrition. MariTide's Phase 3 programme carries clinical risk; model it with explicit phase probabilities.
Biosimilar competition. Some of Amgen's own mature products face copies from other companies as their patents expire.
A clinical-stage company's two programmes are valued year by year and its cash rolled forward to first sales, beside a franchise owner valued through its patent cliff.
- 15 sections, the clinical stage ladder to cash runway, multi-programme rNPV and a patent cliff
- 41 pages
- a two-programme clinical-stage company with its runway and dilution, a concentrated franchise owner and a diversified profitable company
- 3 worked companies
- profitable franchise owners and a cash-burner, on filed concentration, cash and burn
- 6-company screen
The Excel model is the primer's rNPV engine live across 13 sheets: a phase-by-phase PoS chain on BIO 2011-2020 rates, from Phase I to Approved; three worked companies, each switchable between clinical and commercial mode and valued year by year over 20 years, with later-phase R&D weighted by the odds of reaching it; a valuation summary with franchise floors; a runway calculator that rolls real cash forward, shows when it runs out if the lead fails, and prices the dilution from the raise; concentration and patent-cliff views; and a sensitivity grid. Change PoS, peak sales, R&D or the discount rate and the value moves.
See what's in the Biotech Sector Primer →£25 PDF · £59 with the Excel model · £159 for all three Healthcare industries
Learn the Concepts
Understand the valuation frameworks and metrics used in this analysis.
Clinical Trial Success Rates by Phase
FDA phase definitions and BIO/Informa success rates: 52.0% to 28.9% to 57.8% to 90.6%, cumulative 7.9% LOA from Phase I; the later Citeline 2014–2023 data give 6.7%.
Biotech Partnership Economics
Biotech profit-share partnerships: Regeneron Dupixent $5.2B profit share versus Sanofi $17.8B global sales, the 3.4x booking trap, and rNPV on the economic share alone.
rNPV for Clinical-Stage Biotech
Single-asset rNPV for clinical biotech: PoS-weighted cash flows at 10.0–10.5% discount, a Phase II worked example at 15.1% PoS, equity equals rNPV plus net cash.