Amgen Stock Falls on Wyeth News
By Diane Hess
Staff Reporter
09/19/2002 03:36 PM EDT
Biotech company Amgen's (AMGN:Nasdaq - news - commentary - research - analysis) stock was down 6.9% amid news that pharmaceutical firm Wyeth (WYE:NYSE - news - commentary - research - analysis) would likely ditch its stake in the company, but analysts said the selling was overdone.
At the end of last year, Wyeth inherited 98 million shares, or 7.7%, of Amgen's outstanding stock, as a result of the company's merger with biotech Immunex. Beginning Oct. 15, Wyeth has the right to begin selling up to 20 million shares of Amgen stock each quarter, according to the merger agreement.
On Thursday, Wyeth said it might sell its ownership of Amgen, under certain market conditions. Amgen fell to $42.36, but market experts downplayed the reaction.
"Amgen's average daily trading volume is 15 to 20 million shares. It would work through the market in less than a business week," said Ronald Renaud, an analyst at Bear Stearns, which has a banking relationship with Amgen. "There is no lack of demand for this stock. I think this is an overreaction."
Other analysts said they were hardly surprised by Wyeth's decision to unload Amgen. "They are a drug company, not a mutual fund," said Matthew Geller, an analyst at CIBC World Markets. A stock sale could help Wyeth work down the approximately $3.4 billion in debt on its balance sheet. |
