Market-moving financial pundit Jim Cramer complained last week that he couldn't understand why shares of drug maker Amgen Inc. were trading more like a "boring pharmaceutical" than a cutting-edge biotech.


Yet Cramer neglected to mention that the Thousand Oaks-based Amgen, with a $79 billion market capitalization, has been in uncharted waters for a biotech for several years.


As revenue mushrooms and its product line diversifies beyond three billion-dollar blockbuster drugs, the 25-year-old company has more the look of a mid-cap pharmaceutical company than a typical biotech, few of which have market caps above $25 billion.


While shares continued to climb several days after reporting a better-than-expected second quarter on July 20 closing at $69.61 on July 26 Amgen still is off its 52-week high of $86.92.


Sales of Amgen's newest injected drugs to fight anemia, infections and inflammation showed double-digit, year-over-year sales gains in the quarter, Cramer notes. Its first cancer drug, which U.S. regulators put on a fast-track approval schedule, could launch by the end of this year. Amgen's balance sheet is healthy, and while still not paying a dividend, the company regularly deploys its cash to repurchase stock $876 million worth in the second quarter alone.


Revenue jumped 14 percent to $3.6 billion in the second quarter. Amgen reported year-over-year growth of 26 percent to more than $1 billion for its second-generation red-blood-cell builder Aranesp, and 19 percent to $701 million for white-blood-cell booster Neulasta. Older versions of each drug, Epogen and Neupogen respectively, showed slight declines.


The company's rheumatoid-arthritis and psoriasis drug Enbrel grew at a somewhat anemic 13 percent to $724 million, slowed by new competition and marketing restrictions in place since the U.S. Food & Drug Administration nixed an overly aggressive TV spot last year.


Discounting a $1.1 billion charge related to its April acquisition of Abgenix Inc., Amgen earned $1.01 a share on its quarterly sales of $3.6 billion. Not counting the impact of new reporting requirements on expensing stock options, the company more optimistically predicted it could earn $3.75 to $3.85 a share on revenues of $14 billion to $14.3 billion for the year. Revenues in 2005 were $12.4 billion.


Wall Street analysts note that while Amgen beat expectations for the quarter and upped its guidance, the company does have challenges in moving quickly and aggressively enough to maintain expected growth rates and ward off competitive products.


Analyst Joel Sendek at Lazard Capital Markets, which has a 12-month price target of $87 for Amgen's stock, believes that biogeneric competitors could start chipping away at overseas market share for Aranesp, Neulasta and Neupogen as early as next year but not be a major concern for a few years. Sendek is not alone in his view that the stock is undervalued or has room for growth about two thirds of 21 analysts who follow the company have the equivalent of a "buy" recommendation on shares.


"We believe investors are overestimating (Roche Holding Ltd.'s) Cera's potential threat to Amgen's anemia franchise," said analyst Eric Schmidt at Cowen and Co.


The company also has worked hard to expand the patient base for its drugs through post-approval studies. Aranesp, for example, now can be marketed for more convenient every-three-week use, and clinicians are working to prove that controlling anemia helps heart patients fight their main condition, which is opening up a whole new market for the drug beyond its core kidney disease and cancer target groups.


To spark investor interest, management has gone into significantly more detail than in the past about its experimental drugs. Next on deck is the colon-cancer drug panitumumab, also known as Vectibix, which is expected to receive an FDA green light by late September. That drug will face competition out of the gate from ImClone Systems Inc.'s more established Erbitux (the drug that famously vexed Martha Stewart), but Amgen is expected to trumpet clinical trial data that appears to give an edge to Vectibix.


Another potential blockbuster, an experimental osteoporosis drug called denosumab, is on track in its mid-stage trials.

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