A UBS analyst on Monday boosted his price target on Amgen Inc., saying the launch of the company's osteoporosis drug denosumab should drive the stock's value.
UBS analyst Maged Shenouda boosted his outlook to "Buy" from "Neutral" and now expects shares to reach $70 apiece over the next 12 months, up from prior expectations of $63 apiece.
In August, a Food and Drug Administration panel voted unanimously in favor of denosumab as a treatment for postmenopausal osteoporosis, which can cause brittle, fracturing bones. Still, the panel voted against using the drug to prevent osteoporosis in postmenopausal women as well as patients with breast and prostate cancer.
The company is also seeking approval for the drug as an osteoporosis treatment for patients undergoing cancer therapy.
Analysts have been saying the drug has blockbuster potential and could drive revenue for the company.
Shenouda expects the company to launch the drug in 2010, with annual sales peaking at $2.5 billion in 2013.
Meanwhile, he said the company's base business seems to be stabilizing, while the company is likely to benefit from a "conclusive" resolution to the current health care reform efforts in Congress.
"Our view is that reform will increase access to a significant portion of the estimated 47 million uninsured, and will have little impact on pricing pressure and cost containment on most biotech products," Shenouda said.
Shares of Amgen rose 59 cents to $60.01 in morning trading.
(This version CORRECTS Corrects rating move from reaffirm.)
Source: AP News