AMDP Investment Proposal Final

TO: Clark Hansen, CEO, Anima Mundi Development Partners 

FROM: Maria, Research & Development 

DATE: Wed Mar 12, 2025

SUBJECT: Investment Opportunity: Amgen

As a member of AMDP’s research team, my job is to recommend a business that is committed to operate in a socially responsible, environmentally sustainable, and profitable manner. After extensive research, I recommend Amgen, a worldwide pioneer in biotechnology that meets AMDP's standards. In this memo, you will find the following:

● AMDP Standards

● Background, financials, and values of Amgen

● Expert’s view on Amgen

AMDP Standards

The Triple Bottom Line

This is a business concept that states firms should commit to measuring their social and environmental impact in addition to their financial performance. 

● Profit: The financial return an organization generates for shareholders

● People: An organization’s commitment to positively impact society

● The Planet: An organization’s effect on the environment (HBS)

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is a business model in which companies actively strive to conduct their operations in a manner that benefits society and the environment, rather than causing harm. (Investopedia)

Social Enterprise 

A social enterprise is a business that takes a market-driven approach to tackling unmet needs or addressing social and environmental issues. Unlike charities, they generate revenue through their operations to support their social initiatives. (Investopedia)

Carbon Footprint

Carbon Footprint is the amount of greenhouse gas emissions associated with all the activities of a person or other entity (e.g. a corporation). It is usually measured by the weight of gas emitted per year. It is important to reduce carbon footprint because it would improve air quality, thereby enhancing public health outcomes. (NASA)

Background, financials, and values of Amgen

Background

Amgen Inc., founded in 1980 as Applied Molecular Genetics, is a leading American multinational biopharmaceutical company based in Thousand Oaks, California. As one of the world's largest independent biotechnology firms, Amgen specializes in developing innovative human therapeutics for serious illnesses. Amgen Inc. is widely regarded as a leading entity in the biopharmaceutical industry, recognized for its innovative contributions and substantial market presence. Until 2024, Amgen is the world’s largest pure-play medical biotechnology company. (Statista)

Financials

Amgen’s revenue has grown steadily due to increasing product sales from 2022 ($26.3 billion) to 2024 ($33.4 billion), achieving a 26.99% growth rate (Macrotrends). With solid profitability, Amgen achieved a net income of $6.72 billion in 2023. Now, it’s stepping into the obesity drug market, confronting large players such as Novo Nordisk and Eli Lilly. These show Amgen’s strong profit-generating ability and market expansion capability. (Amgen)

Values

● Healthy People - Promoting Health Equity

Amgen is strongly committed to promoting health equity. Their “health equity efforts are focused on expanding access to clinical trial participation among historically underserved populations”. (Amgen) Specifically, in order to reduce asthma disparities in high-risk cities in the US, Amgen launched the HEAL Initiative with a $1 million investment (AAFA), reflecting its people-driven approach to corporate governance and a commitment beyond profit.

● Healthy Planet - Reducing Consumption

Amgen sets goals to build a healthy plant (Amgen). Since 2007, Amgen has enhanced its environmental sustainability efforts while expanding its global production capacity and reaching nearly 100 countries. Wishing to build a better planet, the company is working to “reduce water consumption by 40% from a 2019 baseline”, and to “reduce waste disposed by 75% from a 2019 baseline” by 2027.

● A Healthy Amgen

Amgen prioritizes ethics, transparency, and equity in its operations, from employee and patient care to supplier partnerships. The company is committed to integrity and compliance across all markets. Moreover, the company emphasizes pharmacovigilance, which monitors and addresses potential safety risks while maintaining transparency with regulatory agencies. (Amgen)

● Reducing Carbon Footprint 

Amgen is highly committed to reducing carbon footprint for every single project. They assess the sustainability of all Amgen capital projects as part of their approval process, including the impact on carbon. “For projects that increase carbon dioxide emissions by more than 500 metric tons, Amgen applies an internal fee of $1,000 per metric ton, and uses the fees to support future carbon reduction projects”. (Amgen)

Expert’s view on Amgen

Effective sustainability practices:

● The S&P Global Ratings report affirmed the effectiveness of Amgen's sustainability approach by evaluating its green project framework. The report commented: 

“We consider Amgen’s overall use of proceeds commitments to be aligned. Amgen commits to using an amount equivalent to the net proceeds of financing securities issued under the framework to finance or refinance eligible green projects. The framework provides a clear set of eligible green project categories and a set of example projects, which in our view supports Amgen’s overarching sustainability objectives.” (S&P Global Ratings)

Mid-level ESG practice among competitors:

● However, in the ESG risk rating report by Sustainalytics, Amgen is labeled as medium risk (22.8), while other competitors such as Vertex Pharmaceuticals (19.6) and Gilead Sciences (21.2) are labeled as low risk (Sustainalytics). Key criteria used are exposure to material ESG issues and management effectiveness in these issues. Amgen achieved an average in both criteria.

These industry evaluations highlight Amgen's current solid commitment and meaningful approach to sustainability while indicating that there is room for Amgen to enhance the effectiveness of its sustainable practices in the future compared to its peers.

Recommendation

I recommend that ADMP consider investing in Amgen due to its strong profit-generating ability and its commitment to social responsibility, environmental sustainability, and employee well-being. Amgen's business practices align well with ADMP’s standards, making it a strategic and ethical investment choice. Given its solid financial performance and responsible corporate policies, the company has a promising outlook.

Although Amgen's ESG performance is not yet outstanding among its industry competitors, it is taking a solid and effective approach to keep up with the race. With the 2027 consumption reduction goal and health equity projects Amgen initiated in recent years, Amgen's ESG effectiveness has optimistic room for improvement. Amgen's solid financial background provides it with the capabilities to invest in green initiatives while maximizing its profitability, making it a good investment target for AMDP.

Citation

Harvard Business School. "What Is the Triple Bottom Line?" Harvard Business School Online, 25 May 2021, https://online.hbs.edu/blog/post/what-is-the-triple-bottom-line.

Investopedia. "Corporate Social Responsibility (CSR)." Investopedia, 15 Dec. 2023, https://www.investopedia.com/terms/c/corp-social-responsibility.asp.

Investopedia. "Social Enterprise." Investopedia, 10 Jan. 2024, https://www.investopedia.com/terms/s/social-enterprise.asp.

"Carbon Footprint." Encyclopaedia Britannica, 2024, https://www.britannica.com/science/carbon-footprint.

NASA. "Reducing Emissions to Lessen Climate Change Would Yield Dramatic Health Benefits by 2030." 

NASA Climate News, 13 July 2023, https://climate.nasa.gov/news/3134/reducing-emissions-to-lessen-climate-change-would-yield-dramatic-health-benefits-by-2030/.

"Amgen." Wikipedia: The Free Encyclopedia, Wikimedia Foundation, 2024, https://en.wikipedia.org/wiki/Amgen.

Statista. "Amgen - Statistics & Facts." Statista, 2024, https://www.statista.com/topics/1910/amgen/.

PR Newswire. "Amgen Reports Fourth Quarter and Full-Year 2024 Financial Results." PR Newswire, 6 Feb. 2024, https://www.prnewswire.com/news-releases/amgen-reports-fourth-quarter-and-full-year-2024-financial-results-302367906.html.

Business Today. "Why Amgen’s Maritide Could Rival Eli Lilly, Novo Nordisk’s Obesity Drugs." Business Today, 4 Dec. 2024, https://www.businesstoday.in/industry/pharma/story/why-amgens-maritide-could-rival-eli-lilly-novo-nordisks-obesity-drugs-456180-2024-12-04.

Amgen. "Energy and Carbon." Amgen Responsibility: Healthy Planet, 2024, https://www.amgen.com/responsibility/healthy-planet/environmental-sustainability/energy-and-carbon.

Asthma and Allergy Foundation of America. "AAFA Launches New Health Equity Initiative for Communities Facing Highest Burden of Asthma." AAFA, 2024, https://aafa.org/aafa-launches-new-health-equity-initiative-for-communities-facing-highest-burden-of-asthma/.

Amgen. "Healthy Planet." Amgen Responsibility, 2024, https://www.amgen.com/responsibility/healthy-planet.

Amgen. "A Healthy Amgen." Amgen Responsibility, 2024, https://www.amgen.com/responsibility/a-healthy-amgen.

S&P Global Ratings. Amgen Inc.: Credit Rating Report. 2024, www.spglobal.com/_assets/documents/ratings/research/101195130.pdf. Accessed 12 Mar. 2025.

HiveLR. "Amgen (AMGN) PESTEL and Macro-Environmental Analysis." HiveLR, 7 July 2024, www.hivelr.com/2024/07/amgen-amgn-pestel-and-macro-environmental-analysis. Accessed 12 Mar. 2025.

Sustainalytics. "Amgen Inc. ESG Rating." Sustainalytics, 2024, www.sustainalytics.com/esg-rating/amgen-inc/1007903062. Accessed 12 Mar. 2025.

Macrotrends. "Amgen Revenue 2010-2024." Macrotrends, 2024, www.macrotrends.net/stocks/charts/AMGN/amgen/revenue.