Amgen's Strong Q4 2025 Performance Offsets LOE Headwinds, But Valuation and Pipeline Risks Loom

What happened

Amgen reported a robust Q4 2025, exceeding revenue and EPS expectations while guiding for growth in 2026, showcasing its ability to mitigate loss of exclusivity impacts through key products like Repatha and Uplizna. However, regulatory uncertainty around Tavneos and pipeline attrition for rocatinlimab and bemarituzumab introduce near-term risks that temper the positive momentum. The DeepValue master report underscores that Amgen's stock, trading at 25x P/E, already prices in significant success for the obesity drug MariTide, despite structural headwinds from pricing pressure and legacy erosion. While the strong quarterly results affirm base-business resilience with volume-led growth, non-GAAP EPS only grew 1% in Q3 2025 due to rising R&D and capex, highlighting margin compression concerns. Investors must weigh this performance against high leverage, ongoing LOE challenges, and the unproven nature of MariTide's competitive edge in a crowded GLP-1 market.

Implication

Amgen's ability to beat expectations and guide for growth demonstrates effective portfolio management, yet the stock's high multiples leave little room for error, especially with looming LOE and pricing pressures from IRA reforms. Regulatory tensions around Tavneos and pipeline setbacks signal execution risks that could erode confidence if not mitigated, while the crowded obesity narrative means MariTide must prove superior efficacy or tolerability to justify its premium. The base business, though growing, faces margin compression from increased R&D and capex, which may limit EPS expansion even with revenue gains. Long-term, Amgen's thesis hinges on MariTide achieving ≥22% weight loss with low discontinuations and base-business assets offsetting legacy erosion, but current evidence doesn't yet support a de-risked upside. Therefore, a wait-and-see approach is prudent, with entry points near $290 offering better risk-reward than the current price, given the balanced probability scenarios in the DeepValue report.

Thesis delta

The strong Q4 results reinforce Amgen's base-business resilience and its capacity to navigate LOE headwinds in the near term, aligning with the DeepValue report's base-case scenario of balanced growth from newer assets. However, this does not materially shift the core thesis, as regulatory risks and pipeline attrition underscore ongoing execution challenges, and the valuation remains stretched, requiring MariTide to meet high expectations to drive meaningful upside. Investors should monitor upcoming MariTide data and quarterly prints for signs of faster legacy erosion or policy impacts, which could trigger a reassessment.