On the Path to a Blockbuster

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Prolia might be able to save Amgen (Nasdaq: AMGN). But not yet. More in a moment.

In the company's just-reported quarter, product sales were essentially flat year over year with a couple of notable disappointments. Sales of anemia drug Aranesp fell 13% as label changes continue to have an effect on year-over-year comparisons. U.S. sales of anti-inflammatory Enbrel fell 3%, which doesn't sound so bad until you notice that Abbott Labs' (NYSE: ABT) Humira increased more than 9.6% and Johnson & Johnson's (NYSE: JNJ) Remicade increased 1.6% in the second quarter. Outside the U.S. and Canada, where Pfizer (NYSE: PFE) sells Enbrel, sales were up a more respectable 9%, but that's still nothing compared to Humira's 32.7% increase in international sales.

Amgen was able to eke out a 1% increase in adjusted income thanks to cost-cutting measures. Adjusted earnings per share were up 7% thanks to share repurchases. I guess that's not too shabby -- investors' share of the profits is what counts after all -- but it's not as if Amgen is firing on all cylinders.

Amgen's newest offering, osteoporosis treatment Prolia, should be the missing piece of the turnaround puzzle, but it's going to take time. The drug was approved at the beginning of June, which resulted in an almost-not-worth-reporting $3 million in sales for the quarter. With plenty of other branded drugs and generics of previous top sellers like Merck's (NYSE: MRK) Fosamax, it's going to be an uphill battle to break into the crowded osteoporosis space.

The easier pathway to blockbuster status will come in the cancer arena where the active ingredient in Prolia is under Food and Drug Administration review as a treatment to prevent bone breaks in patients with tumors that have metastasized to the bone. The drug has already beaten Novartis' (NYSE: NVS) Zometa in a couple of head-to-head trials, so making inroads into that space will be easier.

Prolia will reach the magical $1 billion blockbuster status eventually, but investors are going to have to be patient. Turnarounds take time.