COMPANY PROFILE - Amgen
Business Sector : Pharmaceutical
Operating Geography : United States, North America, Global
About Amgen : Amgen Inc. is an American biopharmaceutical MNC founded in 1980. It was formerly known as Applied Molecular Genetics(1980-1983) till its initial public offering in 1983. Amgen has acquired more than 16 companies since its existence. Its headquarters are located in Thousand Oaks, California, US. As per recent data, it has at least 12 approved drugs or therapeutic of biologicals for 17 conditions. It has its presence in approximately 100 countries with almost 19,200 employees as of Dec 2016.
Amgen Revenue : 22.99 Billion US $ – FY Dec 2016
Competitive Analysis of Amgen
|1. Regularly innovating and developing new products |
2. Biology-first approach
3. World’s largest independent biotechnology firm
|1. Huge Cost incurred for research and development of new products
2. Sales of some most popular products are falling
|1. There are still many life threatening diseases exist with no cure which can be developed |
2. Expansion to developing nations
|1. Sales affected due to third party payers including government and US legislation
2. Protection provided by patents is limited and can be challenged by competitors
Detailed SWOT Analysis of Amgen
1. Regularly innovating and developing new products: The company focuses on the the development of innovative medicines to address important unmet needs in patients with serious illness. These needs guide the company to relocate the resources across Amgen’s best internal as well as the external programs accessible to them within 6 core therapeutic areas they deal with. Different approach aim to increase the likelihood of success and also reduce the development timeliness and lower cost of developing the newly developed medicines availability to patients.
2. Biology – First Approach: Amgen has pursued the ideology of “biology-first” approach for discovery of the drugs. So, in a way it strives hard to choose a drug target based on a deep understanding of biology of disease. After that, it selects the drug modality, or structural template which is best possible solution for the target. This helps in creating the differentiate Amgen from other competitors in the market.
3. World’s largest independent biotechnology firm: The firm focuses on new medicine based on advancement in cellular and molecular biology. Also, it markets recombinant protein therauptics in care for cancer, in nephrology, as well as in inflammation too. Amgen also develops treatment for kidney disease, arthritis, other bone related and serious diseases. As per latest financial reports, total assets was close to 77626 million dollars.
1. Huge cost incurred for research and development of new products: Amgen categorizes all its research and development activities into three categories Discovery research and translational science, later stage clinical program, marketed products. And as per 2016 data, all three stages costed around 1039, 1054 and 1747 million dollars. So, total cost amounts to be 3840 million dollars. Although, many Amgen products are benefitted from the subsidy by the federal research subsidies but these can not overcome the overall cost incurred.
2. Sale of some most popular products are falling: As per financial report of 2016, the sale of major products are seen to be declining. Products names and details are as follows – Neulasta sales decreased by 3% for fourth quarter and 1% for whole financial year, Epogen sales decreased by 8% for fourth quarter and 31% in the complete financial year, Neupogen sales decreased by 34% for fourth quarter and 27% for whole financial year. These products were once high selling and being in demand products. But, these are decreasing in demand which is a big concern for the company.
1. There are still many life threatening diseases exist with no cure which can be developed: There are many diseases for which cure is not available. Various kinds of diseases are spreading due to human deeds which includes population increase, pollution etc. Those diseases include Asthama, Diabetes, Ebola virus, HIV – for these diseases, no any cure is available so that the patient can be 100% safe. Although, it is possible that some of them can be stopped/paused In their preliminary stage. Being one of top pharmaceutical company Amgen can surely look for opportunities by developing the live saving medicines.
2. Expansion to developing countries: currently Amgen is having business mostly in North America and south America, Europe and China when we talk about bulk. But still Asian African countries are not yet tapped. This can be seen as plethora of opportunity as these two continents have larger population and will require more cure for diseases than those places where population is low. So, seeing this, Amgen needs to establish its branches or subsidiaries in these countries. This will help in getting better margins as well as catering to more number of population in these developing nations.
The unpublished sections of the entire SWOT analysis is available in the 'Complete Report' on purchase.
|1. Risk of war like situation due to North Korea |
2. Pricing regulation mechanism
|1. Non-GAAP financial measures|
|1. Aging Baby Boomer population in US |
2. Lifestyle changes
|1. Single-use technology
2. Advancing biomanufacturing process
|1. Legal wars against competitors||1. Amgen’s 2020 Environmental sustainability Plan|
Detailed PESTLE Analysis of Amgen
1. Risk of war like situation due to North Korea: Recently, tension between the North Korea has increased. And as a result war like situation has come up which will definitely affect the working of Amgen. Political instability in those countries where war may occur lead to fluctuation in sales. US has better opportunity for biotechnology industry but due to war, situation may not be in favour of Amgen as subsidies provided by the government might be affected.
2. Pricing Regulation Mechanism: As Amgen works for cure of diseases which are are severe for human beings, government often regulate the prices of medicines. So, the margin is compromised due to this. The healthcare sector need lots of investment due to research and development of the cures. So, in return if Amgen does not get proper margin then business may suffer decrease in revenues.
1. Non-GAAP financial measures: Amgen needs to show both GAAP as well as non-GAAP financial details in each quarter and YOY basis. This provides investors a better option to analyse the details from a different angle. This helps in enhancing the understanding of investors regarding financial performance and prospects for the future of the company’s contemporary business activities. So, better comparison exists for the use of investors. And FCF show better details about the liquidity of the company adding to further insights.
1. Aging Baby Boomer population in US: The aging Baby Boomer population in US is one of main social factor which is going to drive the healthcare industry in US. It is estimated that by 2030 the population above the age of 55 will constitute around 31% of total population in US. This will result into major heath care issue to that section of population as that age range leads to more diseases. So, Amgen is looking into further development of medicines which will care for the diseases of the old people. It will help in treating the chronic as well as the rare diseases.
2. Lifestyle changes: The centre for disease control and prevention has listed heart disease, stroke, cancer etc as most common diseases even in current scenario in US. As per survey data, almost half of the population is affected by one or more chronic conditions. Unhealthy food, lack of exercise and smoking etc had led to these kind of dieases. So, biotechnology companies like Amgen have introduced several drugs to help in tacking these conditions and diseases.
The unpublished sections of the entire PESTLE / PESTEL analysis is available in the 'Complete Report' on purchase.
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Amgen SWOT and PESTLE analysis has been conducted by Harsh Vaibhav and reviewed by senior analysts from Barakaat Consulting.
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