Just when it looked like Amgen (Nasdaq: AMGN) was turning things around … whack! The Food and Drug Administration has thrown a wrench in the biotech's plans.
The earnings report Amgen released yesterday afternoon was fairly positive, with adjusted earnings per share up 21%. Revenue decreased 2%, but that's not surprising. As in previous quarters, anemia drug Aranesp is struggling, down 19%, while the rest of Amgen's drugs try to pick up the slack.
Anti-inflammatory Enbrel, which Amgen now sells with Pfizer (NYSE: PFE), managed to increase sales -- albeit through price increases -- even in the face of increased competition from Abbott Labs' (NYSE: ABT) Humira and Johnson & Johnson's (NYSE: JNJ) Stelara. The latter was recently approved for use in the U.S., so investors should keep an eye on Enbrel's sales in the coming quarter.
Investors were hoping that the company could hold on until its osteoporosis drug, Prolia, could come to the rescue. Unfortunately, they'll to have to wait a while. Earlier this week, Amgen announced that it got a letter from the FDA asking for more information before the agency would approve the drug for treating bone loss. The agency also wanted a new study before it would approve the drug for preventing osteoporosis.
The company still had an outstanding application to approve the drug for bone loss in patients who have undergone hormone ablation to treat cancer. The advisory committee split here, saying there was enough evidence to approve Prolia for prostate cancer patients, but not breast cancer patients.
Hopes for that last chance for a quick approval were dashed yesterday; Amgen announced that the FDA wants additional trial data for both breast and prostate cancers, to make sure that Prolia isn't causing the cancer to worsen. It's possible that trials in a related indication -- preventing bone breaks in cancer patients whose tumor has spread to the bone -- may be sufficient to satisfy the FDA.
Speaking of that indication, Amgen has decided to wait to file for bone metastasis patients until after data from a third trial becomes available in the first quarter of next year. So far, Prolia has beaten Novartis' (NYSE: NVS) Zometa in one study, and equaled the competitor in another trial. A third trial probably wouldn't be required for approval, but since the data will be available relatively quickly, it doesn't seem like a major delay.
Hopefully, 2010 will be Amgen's turnaround year. Thus far, 2009 seems like anything but.
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