Amgen's quarterly report gives ammunition to naysayers: challenges may be offset by potential of two experimental drugs.

AMGEN Inc. naysayers, have been predicting the company s inevitable fall as a fast-growing biotech darling long before its market cap passed $82 billion. The Thousand Oaks company's latest quarterly report with its soft earnings, mixed clinical trial data and a cautious 2007 outlook only added fuel to the fire.

The company reported a 1 percent increase in fourth-quarter net income (before-charges) of 90 cents a share on Jan. 25. That missed some Wall Street projections by as much as 3 cents. And a 17-percent rise in revenues to $3.84 billion was countered by clinical trial data that clouded long-term growth prospects for three separate drug treatments.

Investors responded by slicing 6.5 percent off Amgen's stock price over the next two Wading days, with shares hitting bottom at $69.97, before closing at $70.37 on Jan. 31, 12 percent off their 52-week high. Even Chief Executive Kevin Sharer told analysts that despite having come off "one of our very, very best years ever," the company faces an array of challenges.

Credit Suisse analyst Michael Aberman has warned that Roche's Mircera, which could reach the U.S. market in May despite unresolved patent issues, could lead to a 10 percent drop in sales of Epogen, Amgen's original anemia treatment.

The most worrisome clinical study had hoped to show that Aranesp--a second generation, longer acting version of Epogen--could reduce the need for painful and costly blood transfusions in anemic cancer patients. Not only was no statistically significant benefit found, there were indications that aggressive treatment might increase the risk of death.

Amgen spokeswoman Trish Hawkings notes that opposed to an earlier trial, many of this study's participants were late-stage cancer patients not undergoing treatment for their cancer. But while that study's sample may have skewed results, it followed recent studies that large doses of Epogen could cause serious side-effects.

Almost lost in the bad news were positive results for two experimental treatments, AMG 706 and AMG 531, which treat thyroid cancer and an autoimmune bleeding disorder, respectively. The later drug is on track to be submitted for U.S. regulatory approval this year. And Hawkins notes that the company still has three other label expansion studies proceeding well that could expand Aranesp's market.

Other Amgen watchers agree. Jim Miller, a Chicago-area private investment manager who writes a respected column for the online site SeekingAlpha.com, agrees with CNBC pundit Jim Cramer that Amgen should be considered more of a fallen angel that deserves to trade higher than market valuations.

"When the market sees anything to worry about it tends to overreact and not read past the headlines especially with all the drug product scares we've seen in recent years," said Miller, a veteran biotech investor who owns Amgen shares. "This is a company with a long-term growth rate of 17 percent with a stock you can buy at 15 times forward earnings or less. You don't see many opportunities like that."