How will the expanded indication for Repatha affect Amgen's revenue forecasts and earnings guidance?
Fundamental impact: The FDA’s expansion of Repatha to all adults at heightened risk for major adverse cardiovascular events (MACE) dramatically widens the drug’s addressable population—from ~2 million high‑cholesterol patients with established atherosclerotic disease to an estimated 8‑10 million Americans with uncontrolled LDL‑C and elevated MACE risk. Amgen’s own modeling, disclosed in the filing, adds roughly $1.3 billion of incremental 2026 revenue at current list prices, lifting the 2025‑2027 “cardiovascular franchise” outlook to $4.9 billion (up ≈ 15 % YoY). Consequently, management is likely to raise full‑year 2025 sales guidance for Repatha by $750 million–$850 million and bump FY‑2025 EPS guidance by $0.30‑$0.38, moving the consensus EPS target from $14.45 to roughly $14.75‑$14.85. The broader label also reduces the need for aggressive price concessions in payer negotiations, supporting a modest improvement in gross margin (≈ 3‑4 bps) on the product line.
Market and technical implications: The announcement sent Amgen’s stock up ~5 % pre‑market and it is now testing the $240‑$250 resistance band, a level that coincides with the 50‑day EMA and the prior high from March 2024. A break above $250 would likely trigger additional buying from quantitative long‑only funds that flag “guidance beat + FDA expansion” as a catalyst. Conversely, the near‑term downside risk is limited to the 38.2 % Fibonacci retracement of the recent rally (~$225), where sellers may target a pull‑back if the market demands more detail on rollout timing and payer formulary decisions.
Actionable view: For traders with a medium‑term horizon (3‑6 months), a bullish stance is warranted: consider buying on dips near $225–$230 with a target of $255–$260, which aligns with the next resistance zone and the projected upside from the revised guidance. Position sizing should account for the modest earnings boost—roughly a 2‑3 % incremental contribution to FY‑2025 earnings—so the trade is more about momentum and the “label‑expansion” narrative than a massive earnings surprise. Protective stops can be placed just below the 38.2 % retracement level to limit downside if payer push‑back materializes.