How big is the mid-2020's LOE problem for Amgen?

US biotech giant Amgen (Nasdaq: AMGN) has survived periods of accelerated erosion of legacy products before, but investors may not be aware of the erosion risk facing the company in 2025-2030, commented SVB Leerink Research analyst Geoffrey Porges.

Major franchises such as Prolia (denosumab), Xgeva (denosumab), Otezla (apremilast), Kyprolis (carfilzomib) and Enbrel (etanercept) all face biosimilar or generic competition in this period. He estimates that 52% of the company’s expected total revenue in 2024 will face discounted competition in the 2025-2030 period, and using standard templates for branded and biosimilar erosion, it is likely that more than $9.6 billion of revenue, or 64% of the $15.1 billion in at-risk product sales in 2024, will be eroded by 2030.

This amounts to one third of the company’s total revenue in 2024 that is likely to be eroded by 2030, before accounting for offsetting growth in other franchises and from new launches. Mr Porges thinks this revenue erosion poses a significant headwind for Amgen’s growth ambitions, and perhaps explains the company’s flurry of early-stage new molecular entities (NME) acquisitions.