NEW YORK (CNNMoney.com) -- Amgen, the biggest biotech in the world, has seen better days.

Amgen (up $0.21 to $66.60, Charts) was once considered expensive, but its stock price is down 16 percent this year. That's nearly twice the 9 percent drop experienced by the No. 2 biotech, Genentech (down $0.86 to $83.75, Charts), and by the biotech industry at large.

Amgen could use a hot cancer blockbuster to convince investors that it's worth buying. The biotech's best chance is an experimental drug called denosumab, though analyst opinion varies as to how well this drug might do on the market.

This potential cancer drug is being tested for five indications, three of them in the lucrative area of bone cancer treatment. Also, three of these tests are in phase 3, the most advanced stage of testing before a drug application is submitted to the Food and Drug Administration.

California-based Amgen is also testing panitumumab, a potential treatment for colorectal cancer, that could be approved by the FDA as early as this year.

But analyst opinion varies about Amgen and the strength of its pipeline. While some see denosumab as a multi-billion dollar drug, others say it won't enter the market until 2009 and its annual sales could top out at just a few hundred million dollars. Projections for panitumumab tend to be slimmer.

Ed Nash, analyst for Stifel Nicolaus, said he's "obviously bullish" about Amgen, projecting a 12-month price target of $91, up from its current level of about $66.

Nash believes denosumab will enter the market in 2009 and total nearly $500 million in sales just in its first year. Nash projects that in that same year, annual panitumumab sales will have reached $1.3 billion.

"The stock is looking cheap now," said Nash.

But James Reddoch, analyst for Friedman, Billings, Ramsey, rates Amgen a "hold," despite his projection of $2 billion in annual sales for denosumab, because that revenue is years away. He believes that Amgen is "fairly priced" the way it is.

"Denosumab is the most important product in their pipeline," said Reddoch. "The Street has possibly undermodeled that drug's potential, but it's a 2009 launch. I just don't see a lot of compelling, attention-getting events in the next six months for Amgen."

And Les Funtleyder, analyst for Miller Tabak, doesn't think denosumab will bring in more than a couple hundred million dollars a year, because it's an injectable drug that will competing with similar treatments that are oral pills.

Funtleyder has a "sell" rating for Amgen, though he's considering upgrading the stock to reflect the positive investor sentiment for biotechs these days.

But is Amgen even a biotech anymore? With a price-earnings ratio of 18, Amgen trades more like a more traditional drug stock, some analysts say.

"My view is that Amgen and Genentech have become so big that they probably ought to be treated more like Big Pharma than biotech, value-wise," said Funtleyder. "They're growing faster, but they're huge. At some point, the law of large numbers is going to catch up with them."

In order to survive and to succeed, Amgen needs to start acting like Big Pharma and less like a biotech, by focusing less on research and development and more on acquisitions of smaller companies, said Funtleyder.

"I don't think things like denosumab and panitumumab are really going to propel them," said Funtleyder. "They're going to have to do some external acquisitions if they're going to really want to get going."

Funtleyder didn't name names, but he said Amgen should buy up companies in a lucrative area of treatment where it has a lot of experience: cancer.

Reddoch, the analyst from FBR, said he did not want to speculate on Amgen's merger plans but added the company hasn't been shy about them in the past, noting its $2.2 billion acquisition of the biotech Abgenix late last year, and its 2004 purchase of Tularik.

"They have a pretty aggressive record in either partnering with companies or outright acquisition," said Reddoch.

But Nash of Stifel Nicolaus said Amgen's deal for Abgenix - which is how the company acquired denosumab and panitumumab - will keep it busy for awhile.

"I think they're going to put all their resources towards developing the Abgenix pipeline for now," said Nash.

An Amgen spokeswoman declined to comment.

Genentech is set to report second-quarter earnings on Tuesday. Amgen results are due on July 20.

The analysts interviewed for this story do not own shares in Amgen. Stifel Nicolaus makes a market in Amgen securities, and FBR seeks business with them; Miller Tabak has no business relations with Amgen.

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