Amgen highlights denosumab, growth strategies	November 2008

Amgen executives attempted to reassure shareholders Friday that the biotech is back on solid ground, insisting that the next five years will make the hard times of the last two seem like a distant memory. CEO Kevin Sharer told investors and analysts at a meeting in New York that Amgen, driven by the hopeful 2009 launch of potential osteoporosis blockbuster denosumab and no key patent expirations forthcoming, is positioned to become one of the top three drugmakers in revenue growth and earnings-per-share growth in the biopharmaceutical industry over the next five years. Those are lofty goals for a company still recovering from declining sales of its anemia drugs Aranesp and Epogen after questions were raised almost two years ago about their safety. The fallout from these revelations forced Amgen to restructure, resulting in 2,000 jobs being cut in 2007. Amgen expects another 10% to 20% decline in Aranesp sales before the company stabilizes. Sales of Epogen have been stable since January, executives said.

“That’s very much behind us,” Mr. Sharer says. “We’ve passed through a test that comes to companies occasionally, and not everyone can stand up to that kind of test. I’m proud that we were able to. Our long-term investments are starting to pay off. We have a product in denosumab that has the potential to have dual-blockbuster status. I am very proud and pleased that over the last 18 months, we’ve reshaped our business.”

According to Mr. Sharer, Amgen now has five drugs on the market that exceed $1 billion in annual sales and in the coming years, the dialysis drug Sensipar could pass that milestone. Nevertheless, there is no question that the company’s growth will largely be determined by the fate of denosumab, a fully human monoclonal antibody being studied in a number of indications. The drug is nearing an FDA filing for patients with postmenopausal osteoporosis, where it is expected to make the biggest impact, and is also in Phase III trials in oncology for preventing bone loss in breast cancer, prostate cancer, and solid tumors.  

“When you look across the industry, there are not very many innovative products,” Mr. Sharer says. “That’s a concern to all of us. … Innovation is our focus. Nplate [approved in August for chronic immune thrombocytopenic purpura] and denosumab, both products that took 15 years to develop, are evidence of that. We have and will continue to invest heavily in R&D.”

Amgen executives admit that with denosumab’s unique market potential in two distinct disease states – osteoporosis and cancer – maximizing the drug’s impact for both the patient and the company will be a challenging endeavor, but one they will gladly take on.“We will invest enough money to do this right and to do this aggressively,” Mr. Sharer told investors. “It is very, very rare that this kind of clinical data becomes available in such a broad and important disease, even rarer that it become available, if the Phase III data proves out, in two diseases. This is a rare opportunity in our industry, period. We recognize that.”

Amgen, which recently reported favorable Phase III data for denosumab, did not provide a specific filing date for the drug at Friday’s meeting, but did indicate that the company is on target for a submission by the end of the year or early in 2009. If approved, denosumab would become Amgen’s eighth new product to launch since 2001.
 
“These are very large files to put together and we want to make sure we dot every i and cross every t,” says Roger Perlmutter, M.D., executive VP, research and development, Amgen. “We have had discussions, of course, all along the way with the FDA, and those discussions continue. We can certainly expect to have all of that information pulled together in a very short period of time. We want to make sure that there aren’t questions that have come up with the FDA that we haven’t perhaps addressed enough.”

Analysts grilled Amgen executives over the long-term safety concerns for denosumab, a typically conservative pathway for doctors, and whether the company will jointly market the drug with a partner or sell it on its own. On the safety front, Dr. Perlmutter says Amgen clinical teams will continue to gather large amounts of data on denosumab post-launch, and the company will also have a proactive surveillance program in place.

One analyst suggested that denosumab’s market potential in the cancer applications is stronger than for osteoporosis. She believes that the smart move for Amgen, should denosumab be approved, would be to partner for osteoporosis  – at least for the first three to five years – while marketing the cancer indications on its own. There are doubts
over whether Amgen has a large enough sales force to promote denosumab to primary-care physicians, who are most likely to treat osteoporosis patients.

George Morrow, Amgen’s executive VP, global commercial operations, says the company has no specific partnering plans yet for denosumab, but hinted that such a scenario appears more plausible internationally than in the United States. Amgen has an agreement with Daiichi Sankyo to develop and commercialize denosumab in Japan.

 “We can do it better,” Mr. Morrow told investors regarding Amgen’s U.S. strategy for denosumab. “There aren’t many people like Jim Daly [senior VP, North America commercial operations, Amgen] and the kind of people who we have on his team that have intense primary-care backgrounds and biotech backgrounds. When you’re in the big pharma world, reimbursement is not a big deal, you don’t really necessarily understand it. We have intense understanding of reimbursement, fulfillment, and how to orchestrate that in the office. When you combine our knowledge with the fact that we can hire a superb sales force with great relationships with the key guys, we can do it better. The return on investment in the U.S. is very different from overseas.”
 
Amgen also highlighted some other projects in its pipeline, focusing mostly on oncology, inflammation, and bone disease. According to Dr. Perlmutter, the biotech has invested more than $17 billion in R&D since 2001, including $3 billion so far in 2008, or 20% of company sales. Amgen has more than doubled the size of its pipeline during that period.

Two particular compounds Amgen has hopes for are AMG 386, in Phase II for various cancer types, and AMG 761, in Phase I for asthma. AMG 386 inhibits angiogenesis through a pathway distinct from VEGF, and, according to Amgen, the drug’s combined blockade with VEGF inhibition appears promising. AMG 386 is being studied in 39 Phase II programs in more than 15 tumor types. AMG 761 is a monoclonal antibody designed to deplete the buildup of Th2 cells, which orchestrate the allergic immune response in conditions such as asthma.

“What it results in the clinic, fortunately, is that we can selectively and potently deplete this specific cell type at extraordinary low doses in humans,” says Sean Harper, senior VP for global development and chief medical officer, Amgen. “Because the pharmacodynamic effect is clear to the cell population, that could last quite a while, so you can dose this quite infrequently. We’re looking forward to seeing more data from this molecule over time.”
 
Amgen executives met informally with the press following Friday’s meeting, and addressed several topics, among them the present credit crisis and the increasingly favorable environment for Amgen and other large drugmakers to tap cash-starved small biotechs to boost pipelines.  

“What we’re looking for is products; we’re not looking for industrial opportunities to rationalize costs,” Mr. Sharer says. “We’re looking for products that are innovative that we think have the potential to serve meaningful groups of patients that are underserved. We seek products with partners that are friendly. I’m not saying we would never do a hostile [takeover], but we haven’t. The consequence of the companies having a bigger need for cash now than they have in the past will make those folk more likely to want to come and partner with us. We don’t say to ourselves, hey, this is great, there’s a really wonderful economic opportunity here, let’s go for it. The economic situation will cause these hundreds of biotechnology companies that are in a tough spot to be a lot more willing and likely to raise their hand and be ready to talk, and we want to be part of their choice.”