Shares of Amgen plunged 10.1% to $393.17 on Tuesday — erasing roughly $24 billion in market value — after a one-two punch: Novartis disclosed that its Phase 3 trial of pelacarsen, a pioneering cardiovascular drug designed to lower a cholesterol-like particle called lipoprotein(a), failed to reduce heart attacks, strokes, or cardiac deaths compared to placebo. Hours later, BMO Capital's Evan Seigerman downgraded Amgen from Outperform to Market Perform, keeping a $450 price target. The collision of class-wide drug doubt and a Wall Street reassessment has investors scrambling.
- A Competitor's Failure Raises the Bar for Amgen's Own Heart Drug
Amgen is developing olpasiran, a therapy designed to reduce the same cholesterol particle in the liver, currently in a late-stage trial called OCEAN(a)-Outcomes. Though olpasiran works differently and showed reductions in the biomarker exceeding 97% in earlier studies , the core question now is whether lowering this particle actually prevents heart attacks. JPMorgan said the Novartis results lower expectations for olpasiran, and the bank is "less convinced" the effect would be "clinically meaningful enough to translate to a significant commercial opportunity." Results aren't expected until late 2027 or early 2028 — leaving a long period of uncertainty.
- The Stock Had Already Priced In Good News
BMO noted Amgen shares were up 34% year-to-date, outperforming both the S&P 500 and pharmaceutical-sector benchmarks.
One valuation model pegged Amgen's prior $437 share price at nearly 20% above its estimated fair value of $365.76 , meaning the stock left little cushion for clinical disappointment. When that disappointment arrived via a competitor, the correction was swift.
- Patent Cliffs Add Pressure Beyond the Pipeline
BMO flagged significant upcoming revenue losses as key drugs including Prolia, Enbrel, Otezla, and Kyprolis face generic competition.
Meanwhile, Amgen's obesity drug MariTide "offers a potentially differentiated profile," but Phase 2 data leave questions about competitiveness against entrenched rivals.
- The Business Engine Remains Powerful — For Now
Amgen posted $10.1 billion in second-quarter revenue and $3.5 billion in free cash flow , and recently reported positive late-stage results in immunology and lung cancer. But with BMO's $450 target now just 14.5% above the beaten-down price, Truist Securities called the olpasiran bet "higher-risk/higher-reward rather than becoming outright impaired." Investors must decide whether Amgen's proven cash machine justifies staying in — or whether a drug class under existential scrutiny demands a wider margin of safety.