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Giant Amgen Has A Lot Riding on The Next Several Months

Thousand Oaks-based Amgen will have to wait a bit longer to find out whether it can commercialize what some are saying is the biotech giant’s next blockbuster drug, denosumab, also known as Prolia. On October 19, the FDA requested more information about the experimental drug, which Amgen wants to market for the treatment and prevention of postmenopausal osteoporosis, among other potential uses. The request effectively extends the FDAs review period. The FDA asked Amgen to provide more information about how it plans to monitor patients using denosumab. It also wants to know more about the company’s Risk Evaluation and Mitigation Strategy and obtain updated safety data related to the drug. “We are confident that we can quickly respond to the FDA’s requests for the treatment of postmenopausal osteoporosis indication and plan to do so in the near term,” said Dr. Roger M. Perlmutter, executive vice president of research and development at Amgen. How long it will take for the FDA to approve or deny the drug is unknown. But one thing is for certain: Amgen has a lot riding on denosumab. Sales of the drug could generate billions in revenue at a time when Amgen is facing increased competition for its rheumatoid arthritis drug, Enbrel, and recovering from layoffs and decreased revenue tied to its anemia drug, Arenesp. What is denosumab? Denosumab is described as the first fully human monoclonal antibody that specifically targets RANK Ligand, an essential regulator of the cells that break down bone. Amgen has studied its use in treating bone loss conditions such as postmenopausal osteoporosis and bone loss in patients undergoing hormone ablation for prostate and breast cancer. Studies published in the New England Journal of Medicine showed that twice-yearly administration of denosumab resulted in a 68 percent reduction in risk for a vertebral fracture and 40 percent reduction in risk for a hip fracture in women with postmenopausal osteoporosis. Denosumab administered twice-yearly also reduced the incidence of new vertebral fractures by 62 percent in men with non-metastatic prostate cancer undergoing androgen deprivation therapy. Amgen filed a Biologics License Application with the FDA in February 2009. The company also submitted marketing applications for use of Denosumab in the European Union, Canada, Switzerland, and Australia. Last August, an FDA advisory committee recommended approval of the drug for the treatment of postmenopausal osteoporosis and bone loss in patients undergoing hormone ablation for prostate cancer, with the condition that denosumab have a Risk Evaluation and Mitigation Strategy. The committee recommended against approval for treatment or prevention of bone loss in women with breast cancer undergoing hormone ablation, until additional data is available. It also recommended against approval to prevent bone loss in low-risk patients in Amgen’s three target populations. Beyond the science UBS Securities said the commercialization of denosumab could be one of the highest profile product launches in biotechnology over the next several years. If approved, analysts estimate total worldwide revenues from the drug could hit $2.5 billion by 2013, according to an Oct. 12 report. UBS forecasted $428 million in revenues in 2010, $1 billion in 2011, $1.8 billion in 2012, and $2.5 billion 2013. Additional uses of the drug could boost revenues. To put this in perspective, Amgen laid off more than 2,000 employees in August 2007. The layoffs were tied to decreased revenue from its anemia drug Aranesp. At the beginning of 2007, the FDA issued a safety alert for erythropoiesis-stimulating agents including Aranesp, Epogen, and Procrit. Aranesp sales continue to decline. Worldwide sales decreased 19 percent to $685 million in the third quarter of 2009. U.S. sales decreased 27 percent to $333 million in the third quarter of 2009. Amgen is also experiencing increased competition for its rheumatoid arthritis drug, Enbrel. A key patent for the drug is set to expire in the next few years. Enbrel sales increased 3 percent in the third quarter of 2009 to $924 million. UBS analysts said the company’s base business is now on more solid footing. Many of the safety issues for Aranesp and Epogen are largely behind the firm and were priced into the shares. And Amgen’s colorectal cancer drug, Vectibix, could add upsides. On Oct. 21, Amgen reported adjusted earnings per share of $1.49 for the third quarter of 2009, an increase of 21 percent compared to $1.23 for the third quarter of 2008. Adjusted net income increased 16 percent to $1.5 billion in the third quarter of 2009 compared to $1.3 billion in the third quarter of 2008.

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