Why Amgen Stock Popped by 4% Today

Following quite encouraging news from the laboratory on Monday, Amgen (NASDAQ: AMGN) was something of a stock market favorite the following day. Its shares closed the trading session more than 4% higher on the back of both that sentiment and a pair of optimistic analyst takes on the latest development. With that share price rise, Amgen easily beat the S&P 500 index, which slid by 0.1%.

Cancer drug does well in testing

That news concerned Amgen's investigational stomach cancer drug, bemarituzumab. The company announced Monday that, in combination with chemotherapy, the treatment met its primary endpoint of of overall survival for the patients tested in a phase 3 clinical trial. It compared favorably to the results of patients only taking a placebo and receiving chemotherapy.

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The study had an enrollment of 547 patients who suffered from certain types of unresectable locally advanced or metastatic gastric or gastroesophageal junction (G/GEJ) cancer. Amgen pointed out in its press release on the trial's results that gastric cancer is the fifth-leading cause of cancer-related death in the world, with over 650,000 fatalities.

The two immediate analyst reactions to the news were both positive and complimentary. Piper Sandler's David Amsellem reiterated his overweight (i.e., buy) recommendation and $328 per share price target. According to reports, Amsellem said that while there were some concerns with the study, its results were positive, and Amgen could have quite a successful drug on its hands.

Potential blockbuster?

As cancer is a persistent and tough challenge, any advancement in its treatment is cause for optimism. While Amgen could have provided more details of the study (it pledged to do so in an unspecified presentation in the near future), the rough outlines of bemarituzumab are encouraging. The company might very well be on the cusp of success with the drug.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen. The Motley Fool has a disclosure policy.