Amgen (NASDAQ: AMGN) was reiterated at Neutral with a $208 per share price target by Mizuho analyst Salim Syed on Monday, despite the stock's decline during the session following the announcement on Friday that Bristol-Myers Squibb's Sotyktu received FDA approval.

Sotyktu is anticipated to challenge Amgen's Otezla.

"The key thing here is the lack of a black box (negative for Amgen)," declared Syed. "Recall, on September last year the FDA required warnings about increased risk of serious heart-related events, cancer, blood clots, and death for JAK inhibitors that treat certain chronic inflammatory conditions (link to the communication here). The FDA included the following language in the 'Warnings and Precautions' section of the Sotyktu label, but again, no black box, which means we may begin to see some pressure on Amgen's Otezla when Sotyktu is made available in the US later this month (September 2022; WAC price ~$75K)."

The analyst added that last night, they received the first part of detailed data from Amgen's Ph3 CB200 trial, while they expect to receive the second part of detailed data later today.

Syed wrote that the first part showed "(a) a decrease in ORR from 36% in CB100 to yesterday's 28%, (b) Gr3 liver enzyme elevations in about 10% of patients -- known tox, but additional data, and (c) no OS benefit over comparator, docetaxel -- though the trial was not powered for an OS benefit."

"The question will obviously be here whether this is enough to secure full regulatory approval and ahead of Mirati's (MRTX, NC) expected adagrasib approval, PDUFA 12/14/22. Consensus has Lumakras growing to ~$2Bn peak (in line with our estimate). Again, we estimate every $1Bn move in peak sales is worth about $7 to an Amgen DCF," concluded the analyst.

By Sam Boughedda