In the pursuit of safe, sustainable, and substantial dividend yields, my quest often leads me to the realm of dividend aristocrats.

A particular entity that has caught my interest is the biotech behemoth Amgen Inc. (AMGN).

Although the company has been treading on a rocky path, with its shares plunging below their previous highs and year-to-date performance, it continues to pique my curiosity. After all, this downward trend does present a silver lining.

It unlocks an investment opportunity in the form of a record 3.9% dividend yield that AMGN currently offers, with its strong business performance and anticipated robust free cash flow countering any valuation concerns.

Still, investing in biotech is more than just a mere bet on a company's innovative prowess. It's also a gamble on the company’s skill to maneuver through the labyrinth of policy interventions.

Recent headlines talk about AMGN's ongoing battles, with a plethora of challenges leading investors to remain on the sidelines.

The IRS' quest for billions in back taxes from the company, the Federal Trade Commission's move to halt its massive acquisition of Horizon Therapeutics (HZNP), and a Supreme Court ruling against Amgen in a crucial patent case are just some of the headwinds the company faces.

Amidst these, the impending patent cliff hangs like a Damocles sword, with several of its blockbuster drugs, such as Enbrel and Otezla, likely to witness revenue shrinkage owing to patent expirations and intensifying competition.

Yet, despite the grim scenario, there are silver linings.

AMGN's proposed acquisition of Horizon Therapeutics was driven by the latter's key drug, Tepezza. However, declining sales have put the future of this acquisition into question.

Despite the swirling questions, AMGN remains confident about the eventual success of the Horizon deal. Its leadership foresees no anti-competitive barriers obstructing this merger and anticipates a positive outcome from the FTC hearing later this year.

In relation to Tepezza, the company underscores the synergistic benefits post-merger that can enhance the drug's value. Notably, the larger scale and international presence of AMGN, coupled with its manufacturing expertise, will give a significant boost to Tepezza's sales.

The company has other acquisition options if the Horizon deal hits a roadblock.

Potential targets could be Intellia Therapeutics (NTLA) and Rhythm Pharmaceuticals (RYTM), both of which offer great value at the current price point. The addition of these companies could enhance AMGN's portfolio with promising therapies for rare genetic disorders while providing a potentially novel gene-editing technology.

Furthermore, AMGN is upping the ante in its biosimilar initiatives, viewing its protein manufacturing and clinical development capabilities as its unique strengths. An excellent example is the successful launch of its recent biosimilar, AMJEVITA. Moreover, the company’s plans for more candidates attest to this optimism.

Meanwhile, AMGN's efforts are showing results. Despite a dip in the first quarter of 2023’s net income due to higher expenses, there was a robust volume growth powered by several tailwinds, including the fading impact of COVID. This, along with record sales of key drugs, lends the company confidence for the rest of the year and beyond.

The company also sees growth in international markets, especially in aging populations like Japan and China, and remains optimistic about its growth potential despite price erosion and competition.

On the dividends front, AMGN scores highly with its current yield of 3.9%, backed by a modest 46% payout ratio. Its impressive dividend growth record, coupled with anticipated free cash flow, makes it a promising candidate for dividend growth investors.

Overall, the company’s current stock price offers an attractive opportunity despite the challenges ahead. Given its current trajectory, it’s apparent that AMGN's track record of outperforming the market could very well repeat in the future, promising potentially lucrative returns for those who dare to navigate through the headwinds.