QS Research · Michael Burry's Scion Capital analyst template · 2006
AMGEN INC (AMGN)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case 0% · downside -35% · upside +30%
The market is not missing a deep-value bargain: at $460.61 AMGN is only 4.8% below its 52-week high, up 46.0% in a year, and trades at 17.1x TTM EBITDA and 26.5x TTM P/E on TTM EBITDA of $17.09B and net income of $9.39B. Section 13's arithmetic gives 12.0x EBITDA -> $205.1B EV, less $56.41B debt plus $13.19B cash -> $161.9B equity / 540.91M shares = about $299 (-35%); 17.1x -> about $461 (0%); 21.5x -> $367.4B EV -> $324.2B equity -> about $599 (+30%). Revenue is growing (Q3 2026 +8%) but operating income has not scaled (FY2020 $9.14B vs FY2025 $9.08B on $11.33B more revenue), and Prolia/XGEVA/Otezla erosion plus Enbrel price cuts are structural drags. With a base case at today's multiple, downside of -35% and upside of +30%, risk/reward is balanced and not a long; there is no short either because the franchise still generates $9.58B FCF and guidance was just raised. Pass.
Key numbers
- Share price: $460.61
- Market cap: $249.15B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $38.90B
- EV / EBITDA (TTM): 17.1x
- P/E (TTM): 26.5x
- Price / book: 17.36x
The 15 boxes
- ✓ 1. Long-form business notes
Amgen's recorded revenue grew every year in the window, from $25.42B (FY2020) to $36.75B (FY2025), but operating income did not follow: $9.14B (FY2020), $7.90B (FY2023), a $7.26B trough (FY2024), back to $9.08B (FY2025). The October 6, 2023 Horizon acquisition is the one visible structural break in these sources — D&A stepped from $4.07B (FY2023) to $5.59B (FY2024), buybacks went from $6.36B (FY2022) to $0 (FY2023) and $0 (FY2025), and Horizon's equity plans came onto the register. The cash engine still funds the business: operating cash flow $9.96B and capex $1.86B in FY2025. Note the sources contain no segment, product, channel or unit-economics disclosure — the Item 1 text supplied covers only executive officers, code of ethics and equity-plan/exhibit matters.
- ✓ 2. Competitive advantage
Amgen has no durable product-level advantage: its RANKL-antibody patents (Prolia/XGEVA) expired in February 2025 in the U.S. and November 2025 in select European countries, multiple biosimilars have launched, and management expects accelerated sales erosion. The financial record fits that story — revenue rose from $25.42B in FY2020 to $36.75B in FY2025 while operating income went from $9.14B to $9.08B, so growth has come without operating leverage or pricing power. What survives is scale (R&D of $7.3B in FY2025, 23 Phase 3 programs as of February 3, 2026, ~31,500 staff at December 31, 2025, in-house manufacturing supply) and a reputation/supply-reliability claim management asserts but does not quantify, plus a biosimilars business of its own (eight launches since 2018). Competition is named product by product against AbbVie, Novartis, Eli Lilly, J&J, BMS, Pfizer, Regeneron/Sanofi and generic bisphosphonates.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30): total revenues $10,365 million, +8%, with product sales $9,883 million, +8%, driven by volume (U.S. +8%, ROW +10%); nine-month product sales $27,638 million, +7% on 10% volume growth partly offset by lower net selling price. Operating income rose 47% to $3,710 million with cost of sales down to 26.9% of revenues, but the improvement leans on lower acquisition-related amortization and the absence of 2025's Otezla impairment, and net income of $3,864 million (diluted EPS $7.08) includes $1,629 million of other income, net, largely unrealized equity-investment gains (BeOne) that are not operating. Growth came from Repatha, EVENITY, TEZSPIRE, UPLIZNA and IMDELLTRA/IMDYLLTRA while Prolia fell 45%, XGEVA 47% and Otezla 18% on biosimilar and generic competition; management guides the rest of 2026 to volume growth partly offset by net price declines, with further Prolia/XGEVA erosion expected.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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