Dave--
I've read the Fools' take on AMGN and the revived suit. I would have to agree that it would appear to have little substantiative impact on AMGN. In fact, I wonder if the only reason they are pursuing the issue legally is because doing so may weaken their opposition (AMGN has deeper pockets than TKTX, though I realize TKTX is associated with Hoechst Marion Russell), but then again, maybe it's just a point of pride..... I do not see that AMGN has any reason to worry, even if they lose the suit.
The rationale goes something like this: patent litigation is long and costly, and will likely take a couple of years to resolve. And, if AMGN loses, it probably means they will have to compete on the open market with TKTX---that is, once TKTX's product is approved, which may take some time. (Question: If AMGN lost, would they have to pay TKTX damages? Any thoughts, anybody?)
But AMGN is financially strong, and with virtually no debt, 32% net margins, over a billion in cash, and three products bringing in lots of revenue, they could afford to lower their price on Epogen, which would obviously put pressure on TKTX. BUT---their replacement for Epogen should be ready by then, since they are now in Phase 3. (The replacement is NESP [novel erythropoiesis stimulating protein], which according to AMGN's info on their website, is superior to Epogen because it's half-life is longer, which should allow less frequent dosing compared to Epogen.) NESP, if it does what AMGN hopes, would then appear to make the Epogen litigation moot, since neither company would sell much Epogen once NESP comes out.
Anyway, to me AMGN's future resides to a great extent in their strong pipeline. I just don't see how this law suit will affect AMGN's future in any significant way, though the stock price may fluctuate somewhat, or even be depressed for a time. That would be just fine with me---a buying opportunity, and if the stock price is beaten down for 6 months or even a year, that would just give me that much more time to accumulate some cash to buy.
JMVHO---anybody else have other thoughts???
Walkingshadow |
