In Focus

Naptime for Amgen?

During our focus on pharmaceutical companies this week, I'm making a bit of stretch and writing about a biotechnology company. You see, I still feel a little slighted that the Chicks didn't buy this company, so I'm giving it some airtime here on the Chicks Eye View. I tried to sell the Chicks on Amgen three times but nobody bit; not even a nibble. Amgen's numbers were fantabulous and when I ran them through the Chicks Dozen, I thought they were untouchable. If you'd like to see what I mean, read this post.

Why didn't the Chicks vote to buy Amgen? It wasn't for my lack of trying, believe me. I'm quite a saleswoman when I want to be, I can even sell naptime to my two-year old. So what happened with the Chicks? Well, let's try to figure that out. Come on, it'll be fun -- really. Better than selling naptime to a two-year old any day.

First, let's look at what Amgen does. Our #1 Chick's Dozen criteria is Buy What You Know. Well, it's kind of difficult to define what biotechnology actually is. "Bio" simply means life. So biotechnology can be applied to almost anything that has to do with living organisms. Amgen concentrates on those parts of biotechnology that focus on humans (medical biotech). They have two major products that promote red and white blood cells in the body and are used primarily with cancer and dialysis patients. So is that something you know or encounter in your every day life? Unless you're a cancer patient or using a dialysis machine and by chance your doctor uses Amgen products, I doubt you've ever heard of them or their products. Well, the Chicks didn't know Amgen either, and I suspect this is the number one reason the Chicks didn't peck.

Let's look at Chicks Dozen Criterion #2, Keep It Simple Sister. Can you explain the above paragraph to a third grader? I know my mom (Chick Jeanette) can't and I know Chick Julie can't and even after taking a biotechnology seminar, I'm not sure if Chick Karin can either. So reason number two that we didn't buy the stock is that nobody could explain it. It wasn't simple, sister.

Last but not least, and yes, this is one of the biggest reasons why we didn't buy Amgen, nobody understands the industry. From what I've read, the biotechnology industry is where the Internet was five years ago. So five years from now, we'll all be able to understand and accept the biotechnology industry. For now, however, Amgen is part of an industry that's ahead of its time. The Chicks will continue to be wary of it until it becomes a little more mainstream. It's funny, but five years ago, I don't think one of us would have bought Cisco, Oracle, Sun or Yahoo on our own. But now they seem like everyday companies to us. So I'm hoping Amgen becomes just like those other cutting edge companies - a household name. I'm the queen of "I told you so."

So, these are some of the reasons we didn't buy Amgen. And like any good Chick and mother, I know when to give in and say, "Okay, you can lay on the couch and watch a movie instead, but just this once." I hope Amgen isn't permanently napping for the Chicks, but one never knows.

To be continued. As the Chicks Turn.