Biosimilars Emerge as Growth Driver but Structural Headwinds Persist

What happened

Amgen's biosimilars portfolio is increasingly seen as a growth pillar, with recent launches and a deep pipeline helping offset patent losses on key branded drugs like Enbrel and Prolia. However, the latest analysis underscores that this biosimilar revenue is still a relatively small offset against steep erosion from IRA price cuts and biosimilar competition to Amgen's own legacy franchises. The company's 2025 revenue grew 10% to $36.8B, driven largely by volume, but net prices continued to decline, and Enbrel net price alone fell 30-38%. Meanwhile, the obesity platform MariTide remains the key upside driver, but Phase 3 data are still 12-18 months away, leaving Amgen's near-term earnings exposed to accelerating policy and competitive headwinds. At ~$339 with a 23.7x P/E, the stock already bakes in sustained growth and obesity optionality, offering limited margin of safety if execution stumbles.

Implication

The article highlights biosimilars as a growth driver, but the DeepValue report reveals that this growth is insufficient to fully offset the structural decline in Amgen's mature biologics. Enbrel net prices collapsed 30-38% in 2025, Prolia/XGEVA face imminent biosimilar erosion, and Otezla impairments signal deep IRA impact. Meanwhile, the Horizon acquisition's rare-disease assets are contributing but cannot alone bridge the gap. The obesity option (MariTide) is the most promising catalyst, but its Phase 3 data are not expected until late 2026-2027, meaning near-term earnings pressure is almost certain. Investors holding at current premiums are effectively betting on MariTide's success and continued portfolio resilience, which leaves little room for error given legacy headwinds. A better entry point would be below $295, where downside risks are more adequately discounted.

Thesis delta

While the market narrative is shifting to embrace biosimilars as a meaningful growth lever, the DeepValue analysis shows that the magnitude of biosimilar revenue is still dwarfed by the erosion of Amgen's core branded assets. The thesis tilts more bearish because the near-term headwinds from IRA, biosimilar RANKL competition, and tax uncertainties are accelerating, while the key upside catalyst (MariTide) remains distant and binary. This delta suggests that the risk-reward has become less favorable than the consensus perceives, warranting a patient, more defensive stance.