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4) Monopoly Status: So important score wise... Who to compare it too. On one hand many companies make drugs but nobody else is making bone marrow stimulants (OK Johnson and Johnson markets Epogen as Procrit and some other companies are working on growth factors for other cell lines as well. Since the Biogen discussion in the RB port got me started on this I decided to compare Amgen to Biogen. Is this fair. They are the two oldest biotech companies, but they have no directly competing products. I'm open to suggestions on a better company to use. (BTW Biogen beats Amgen on Cash to debt and net margins but loses on gross margins and flowie) Score=14/20


MarkV,

Nice bit of research you have done on AMGN. I appreciate your hard work and contribution to this board.

I do have one small suggestion regarding the Monopoly Analysis calculations. Often times, a company doesn't seem to have a direct competitor, but rather several "indirect" competitors ... meaning that they only compete against a small portion of their product lines. This happens most often with large conglomerates. For example, Gilette's main competition comes from the Schick brand, which is made by Warner Lambert. Would it be fair, or more to the point, accurate to use WLA as Gilette's competitor? Maybe, maybe not.

In any event, you might want to run the Monopoly Analysis calculations against each of these "indirect" competitors and then average the results. I have seen many people do this when analyzing drug companies because their isn't one dominating force, but rather several (JNJ, PFE, SGP, WLA, MRK, etc).

My bet is that AMGN will still have a score in the 50 range, which would make it a strong contender for Rule Maker status. Again, nice work and Fool On!

the LanceMan



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