Amgen Stock Drops 9.6% Amid Regulatory Setbacks

Amgen's stock price plummeted by 9.6% this week following two major setbacks for the company. First, the UK's medicines regulator suspended new-patient use of Amgen's rare-disease drug Tavneos on September 1 due to unreliable data from its original trial. The agency plans to formally revoke UK marketing authorization by March 2027.

Then, Novartis and Ionis Pharmaceuticals reported that an experimental heart drug missed its key goal in a late-stage trial, which negatively impacted Amgen's stock price as well. Amgen competes with Repatha, its cholesterol drug, in similar cardiovascular disease territory.

The company's strong Q2 results, however, remain unchanged by this week's events. Revenue rose 9.5% to $10.05 billion, beating consensus estimates by roughly 7%, and adjusted earnings per share of $6.29 topped forecasts by about 12%. CEO Bob Bradway attributed the strong results to the breadth and depth of Amgen's portfolio.

The Tavneos regulatory situation is a major near-term catalyst for Amgen. If Amgen can successfully appeal the decisions using real-world evidence, the stock's sharp pullback may prove overdone relative to the underlying business.