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UPDATE: Amgen's Key Bone-Drug Study Meets Goal; Shares Surge |
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| Friday July 25th, 2008 / 23h45 |
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(Add information, analyst comment, updates stock price)
By Thomas Gryta Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Amgen Inc. (AMGN) reported the success of a massive pivotal trial of its bone drug Denosumab in reducing fractures in post-menopausal osteoporosis patients, sending its shares to a new 52-week high.
The three-year study of 7,800 patients met its primary endpoint of reducing vertebral fractures, as well as its secondary goals of cutting non-vertebral and hip fractures. The study showed that side effects experienced by patients using the drug were similar to those of patients who took a placebo, however highly anticipated data that will determine the drug's competitive profile won't be revealed until September.
The news was met with excitement on Wall Street, where shares of Amgen jumped 15% to $62 on the news in heavy after-hours trading, from Friday's closing price of $53.92.
The company will report second-quarter results Monday afternoon.
Morgan Stanley analyst Steven Harr noted that the data significantly cuts the risk connected to the denosumab program and turns Amgen into a "bottom-line growth story."
"There are still numerous commercial risks for this drug," wrote Morgan Stanley analyst Steven Harr in a note to clients. "But a reasonable risk-adjusted base case is now peak sales in the $2-$3 billion range and we expect the stock to trade to the low $60's in the near-term."
Amgen, which had 2007 revenue of $14.8 billion, had expected the study to come at some point in the second half of the year and only received the data late Friday, Amgen's Roger Perlmutter, executive vice president of research and development, said in an interview.
Though the study was successful, a largely expected outcome on Wall Street, specific data weren't released. The company hopes to present the information at a meeting of the American Society of Bone and Mineral Research in September, which doesn't allow prior publication of results.
The data related to the study are vital, because Denosumab will attempt to enter a crowded osteoporosis market that already includes a popular and cheap generic version of Merck & Co.'s (MRK) Fosamax.
If the data show the clear superiority of Denosumab over its rivals, sales could reach $3 billion, according to industry observers.
That Denosumab reduces fractures is important, but the degree of that reduction will dictate where the drug stands in comparison to competitors.
To get widespread use, Denosumab needs to perform better than bisphosphonates, the class of drugs that includes Fosamax, which have been shown to generally reduce vertebral fractures by 50% versus placebo - a closely watched benchmark.
The safety data related to the denosumab is closely watched, largely because its mechanism of action could theoretically increase the risk of infection.
But the large-scale study seems to show a clean safety profile, when compared to placebo, notes Perlmutter, noting that antibodies against the drug seems to be only acting on the target of inhibiting bone resorption.
Amgen is hoping that Denosumab may ease the pain of its anemia drug woes that caused the loss of more than $500 million in 2007 revenue. Sales of the drugs, which were growing rapidly, dropped after studies linked their use to risk of cardiovascular disease, cancer progression and death.
-By Thomas Gryta, Dow Jones Newswires; 201-938-2053; thomas.gryta@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=momliFUbkLkO9OuIQJjF%2Bw%3D%3D. You can use this link on the day this article is published and the following day.
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| Friday July 25th, 2008 / 23h45 |
Source : Dowjones Business News |
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