From GS: Amgen Inc. EPS (FY Dec) 2004E $2.39, 2005E $2.84 Outperform/Neutral
(AMGN) $63.25
NPS Pharmaceuticals, Inc. EPS (FY Dec) 2004E ($4.15), 2005E ($3.45) In-Line/Neutral
(NPSP) $32.78
We expect FDA approval of Cinacalcet for secondary hyperparathyroidism (SHPT)
in dialysis and predialysis patients today, with potential of $0.5B. Due to lack of
Medicare coverage of oral drugs until 2006, we have assumed gradual adoption with
sales of $9MM in 2004 and $135MM in 2005. Therefore, EPS impact should be
limited near term ($0.03/$100MM in sales). We do not expect AMGN shares to
move over 5% either way with the FDA action, but impact on NPSP might be more,
especially on the downside. We estimate that NPSP will receive 10% royalty in sales
($0.25/$100MM in sales).We maintain our Outperform rating on AMGN based on
solid EPS growth of over 20% in the next few years, and increasingly visible
pipeline. We continue to rate NPSP In-Line based on momentum from Cinacalcet
and Preos ($0.5B potential) and a broad platform. Risks include slower sales,
reimbursement cuts, patent disputes, development failures, manufacturing constraints
and dependence on partners. Our coverage view is Neutral. |
