Jefferies raises Amgen target to $410 on Sjögren's data, but core erosion risks persist

What happened

Jefferies raised its Amgen price target to $410 from $367 after dazodalibep delivered positive Phase 3 results in systemic Sjögren's disease, showing statistically significant and clinically meaningful improvement in ESSDAI at week 48. The new data adds a potentially valuable pipeline asset but does not address the legacy pressures highlighted in the DeepValue report, including ENBREL net price declines of 30-38%, Otezla's $1.2 billion impairment, and upcoming Prolia/XGEVA biosimilar erosion. At a current price of $338.59, the stock already trades near the base-case implied value of $340 and below the trim level of $370, but Jefferies' target implies upside that exceeds even the bull-case scenario of $390. Filings show unresolved tax risks, elevated leverage, and a capex ramp that could pressure cash flows, while the Sjögren's opportunity is still early and unproven commercially. The market may overreact to this single trial readout, but the fundamental risk-reward remains skewed mildly negative unless Amgen can demonstrate sustained growth across its entire portfolio.

Implication

Investors should view the Sjögren's Phase 3 success as a modest positive that adds optionality but does not solve Amgen's structural challenges. The legacy franchise continues to face accelerating price cuts and biosimilar competition, which will likely offset gains from newer drugs through at least 2026-2027. At current levels, the stock trades at a premium multiple of ~23.7x earnings, leaving little room for disappointment if MariTide obesity data or Horizon assets underperform. The Jefferies target of $410 is optimistic and assumes successful commercialization of dazodalibep without accounting for potential reimbursement headwinds in autoimmune indications. A more prudent strategy is to wait for a pullback below $300, where the risk-reward improves, or to trim into strength above $370 as the stock approaches overvaluation territory.

Thesis delta

The positive Sjögren's data slightly enhances Amgen's pipeline optionality but does not alter the core thesis of a potential sell due to legacy erosion, tax uncertainty, and rich valuation. The stock may see short-term strength toward the raised target, but such moves would only push it further into overvaluation territory relative to the DeepValue base case of $340. We maintain a cautious stance and would consider trimming on rallies above $370 rather than adding at current levels.