Amgen announced its first dividend today. It was also the first dividend ever paid by a biotech.
Amgen, with several major drugs in the market, is more like a big pharma company at this point than your classic biotech firm burning through cash while working toward a breakthrough. It's investors have been clamoring for Amgen to pay a dividend. Now it has announced one.
Paying a dividend is often seen as a signal that a company’s high-growth days are behind it. CEO Kevin Sharer, tried to refute that, insisting that Amgen is determined to “remain an innovation-focused biotechnology company.”
But analysts and investors don’t necessarily want Amgen to be daring. In fact, they started clamoring for the dividend out of fear that Amgen might use its large cash balance for a major acquisition rather than returning money to shareholders. See WSJ Health blog.
The Biotech King is Dead. Long Live the Pharma King.
Posted by Bruce Lehr April 22nd 2011.