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     Blog - Tiger Software

                            September 7, 2007

What A Perfect Biotech Play Looks Like
    Early on:
  AMGEN in 1990-1991     

       William Schmidt,      - Tiger Software's Creator
      (C) 2007 William Schmidt, Ph. D.  - All Rights Reserved. 

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      Insights that you will not get in a timely way from the
      mainstream Media.  These are designed to let you see
      the "Larger Picture."  Also Occasional Personal Notes.  

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      permitted, provided a clear link to the source is given.

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Tiger Software's Biotech Series Continued - Part 2

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                             AMGEN's Take-Off Phase: 1990

When The Tide Goes Out, You Can See the Rocks         
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When The Stock Market Falls, The Very Strongest Stocks Stand Out.wpe1D.jpg (4226 bytes)
Tiger's Accumulation Index Made Us A Lot of Money Here.

                 We said last time that Biotechs as a group move in sudden sweeps upward that last a year
          and half to two years.  The advances are then followed by seven or eight years of stagnancy. 
          When the Biotechs as a group do start a move upwards by making a breakout new high above
          a series of previous peaks at about the same level, it will pay to be in the right biotechs.
          Amgen's success is instructive.   And it is a stock we made a lot of money in for ourselves and
          for our subscribers back in 1990 and 1991.

                Formed in 1980 by some scientists and venture capitalists with a $19 million private
         placement, Amgen (AMGN) is surely one of the very best performing biotechs of all time.  It is one
         of the only biotech companies to grow from being a drug development company into a pharmaceutical
         manufacturer.  It owes its success to two gene spliced drugs,  
and Epogen.   Additional
         public offerings were required in 1983, 1986 and 1987.
              The first time AMGN stood out to us was back in late 1989.  In the chart below you can see
          the stock fell the lower band with the Accumulation Index still in positive territory.  This often
          indicates an intermediate term bottom, just like in May when it hit the upper band with
          the Accumulation Index in negative territory and then declined for two months.  The stock
          at the time of the October 1989 bullish divergence was only .98, when adjusted for all the splits
          since then.                       
AMGEN 1989-1990
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                 More obvious, in the next TigerSoft chart, below,  you will want to note how AMGN
         looked in 1990 as its big move began in earnest.  We can easily guess that doctors and
         researchers must have been buying the stock after seeing how efficacious its new test drugs,
         Neupogen and Epogen, were. We can tell this because the overall stock market was actually
         quite weak in January, as the DJI fell more than 10% until February and again from July to
         October, as the DJI plunged almost 20%.   So, most investors would have been holding back. 

               When the stock market falls like this, the strongest stocks stand out, like rocks in a cove
         with the tide out.  We use a simple ratio of the stock and the DJI.  That is shown below.   And
         we compare the stock's gain over a fixed period of time with the DJI's gain over the same
         duration.  The second approach we call "ITRS", for intermediate-term relative strength.  The
         "ITRS" for Amgen was positive for the whole year.  This is usually very bullish.        
AMGEN and DJIA: 1990

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                                                                  Relative Strength Indicators
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                          You can search the new highs list in a bear market and sometimes a stock like Amgen.
                But it is better to be sure that the stock shows very positive readings from our "Tiger Accumulation
                Index".   Look at the spectacularly bullish chart below.  All but two days produced a positive
                Accumulation Index.  The stock's decline to the lower band in October with the Accumulation
                Index positive gave us the "B9" signal shown above.  The turning positive by this indicator
                after being negative for just a day is also a positive development.  We see this in October
                and December. Tiger's Accumulation index was invented by William Schmidt in 1981.

AMGEN and Tiger's Accumulation Index: 1990

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                Now look at how AMGEN did with FDA approval for Neopogen in February.
      In May it won a court battle for exclusive rights to market its drug Epogen.

                                    Amgen and Tiger's Accumulation Index:  1991   
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                                           Amgen 's 20 year chart is shown below

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Amgen 1998-2002:  A Roller Coaster Ride with Ample Road Signs.

           Note Amgen's steep advance from 1998 to 2000.  Its sales had by then passed
    $3 billion.  The FDA approved its ENBREL to treat moderately to severely active
    polyarticular-course juvenile rheumatoid arthritis.   This was unanimously recommended
    for FDA approval on September 16, 1998.  It was awarded FDA approval on November
    2, 1998. 
  (Source:     http://arthritis.about.com/od/enbrel/a/enbrelrecommend.htm
                       and   http://arthritis.about.com/od/enbrel/a/enbrelapproved.htm )

                            Amgen and Tiger's Accumulation Index:  1998
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                        Amgen and Tiger's Accumulation Index:  1999
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                      Amgen and Tiger's Accumulation Index:  2000

                                                                                         Note Steady Red Distribution
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                           Amgen and Tiger's Accumulation Index:  2001
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                           Amgen and Tiger's Accumulation Index:  2002
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  Amgen's Story --- See   http://www.answers.com/topic/amgen-inc?cat=biz-fin

                                The not-so-pretty picture of Amgen Lobbying
                                                      Thursday September 6, 3:42 pm ET


                           Amgen Paid Firm $480,000 to Lobby the Federal Government

   The Associated Press reported yesterday that the Senate passed a resolution calling for the reversal of strict
reimbursement rules by the Centers for Medicare and Medicaid Services (CMMS) on Amgen's lead drugs.

It has been a long year for Amgen and its two anemia-treating compounds, Epogen and Aranesp. First, a Danish
study came out showing Aranesp did not improve quality of life or reduce the risk of blood transfusions for those
with noncancer-related anemia. This put a serious dent in Amgen's plans to expand the use of Aranesp, and sales
of the drug fell 10% year over year in the second quarter.

Shortly thereafter, the FDA slapped a stronger black box safety warning on Amgen's two  anemia compounds as
well as Johnson and Johnson's (NYSE: JNJ) anemia-treating Procrit. The final nail in Amgen's erythropoiesis-
stimulating agents (ESA) growth plans came in July when the CMMS enacted stricter reimbursement rules for
the ESA drug class that would curtail some usage in patients reliant on these government insurance programs.

Amgen has argued that the CMMS reimbursement rules are unduly strict and don't follow clinical practice guidelines
from leading doctors groups such as the American Society of Hematology. The CMMS and Amgen have been going
back and forth on reimbursement rules for the ESAs for years.

Together, Aranesp and Epogen accounted for 44% of Amgen's sales in the latest quarter, but times have been
tough for Amgen's top two compounds. In Europe, no fewer than three new competing agents will be muscling these
drugs for market share by the end of next year, including Shire's (Nasdaq: SHPGY) Dynepo, Novartis' (NYSE: NVS)
biosimilar Epogen and Roche's Micera.

Amgen will get another chance to argue its case to the FDA about the risks and benefits of its ESA drugs next week
during an FDA advisory committee meeting. The agency will take the recommendations from this meeting into
consideration in developing new treatment guidelines for the ESAs, so Amgen could be in for one more kick
in the tail this year.


WASHINGTON (AP) -- Drug maker Amgen Inc. paid Covington & Burling LLP $480,000 in the first half of 2007
to lobby the federal government, according to a recent disclosure form.

The firm lobbied Congress on unspecified policy matters, according to the form posted online Aug. 13 by the
Senate's public records office. Under a federal law enacted in 1995, lobbyists are required to disclose activities that
could influence members of the executive and legislative branches. They must register with Congress within 45 days
of being hired or engaging in lobbying.



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