Amgen Expands Buyback

Even with its stock price near a record high, Thousand Oaks-based Amgen Inc. on Wednesday indicated it was willing to spend billions more to buy back shares.

The biotechnology giant said its board authorized spending as much as $5 billion to repurchase stock. That is in addition to $2 billion remaining under a previous buyback authorization.

The stock purchase plans “reflect Amgen’s confidence in its long-term prospects,” the company said in a statement.

Companies often buy back shares when they believe that their stock is undervalued. They also do so to offset the issuance of shares that occurs when employees exercise stock options.

Amgen said it spent $3.2 billion in the first nine months of this year to repurchase 48.4 million shares.

Amgen had 1.25 billion shares outstanding on Sept. 30. Its current stock market capitalization is $97.5 billion.

The stock, which lost 77 cents to $79.01 on Wednesday, is up 23% this year, but has pulled back from its record high of $86.17 on Sept. 19.

Many companies are under pressure to return some of their earnings directly to shareholders, either through stock buybacks or higher cash dividends.

Amgen, like most biotech companies, doesn’t pay a cash dividend.