Amgen shares fell more than 2 percent in trading Wednesday, after the biotech's second-quarter earnings report revealed profits may slow down in the future.
Despite beating Wall Street's expectations, the second-quarter earnings report showed the company's growth is slowing and a buildup in inventories – rather than an increase in prescriptions – contributed to recent profits.
"While Amgen's growth products are performing nicely … they don't have enough size to offset the flattening legacy products," Leerink Partners biotech analyst Geoffrey Porges wrote in a note. "The company requires new opportunities to offset the further decline of legacy products, and their late stage pipeline looks embarrassingly bare."
The largest biotech by market value reported a better-than-expected earnings per share of $3.26 for the most recent quarter, with drugs such as arthritis-treatment Enbrel bouncing back and cholesterol-lowering Repatha turning in positive results.
Yet sales of its prescription drug Neulasta declined 5 percent, down to $1.09 billion from 1.2 billion in the previous quarter.
A $140 million-worth of inventory build up for Enbrel "could create drag" in the latter half of this year, Baird analyst Brian Skorney wrote in a note.
"[Amgen] management noted that there was some impact in sales in the second quarter from inventory build, though the magnitude was not disclosed," Skorney said.
A lack of development in Amgen's pipeline further worries Porges, who believes the company must show urgency to find new, substantial programs. Instead of trying to fill the gap, Porges said Amgen's management overly focused effort on generating excitement about "distant opportunities."
"Amgen's current pipeline has a desperate scarcity of phase III assets," Porges said.
Revenues increased in the second-quarter to $5.8 billion, compared to $5.7 billion in the same quarter a year ago.
Despite Wednesday's drop, the share are up more than 20 percent this year.
– CNBC's Meg Tirrell contributed to this report.