Cheers and Jeers for Amgen's Pipeline

Just after the successful acquisition of Onyx Pharmaceuticals and positive results on AMG-145, a cholesterol-lowering experimental drug, Amgen (NASDAQ: AMGN  ) suffered a setback of sorts when its heart failure drug candidate missed an important phase 2 trial.

A done deal and something more to cheer about
After a long delay, a deal with Onyx was finally struck in August -- a deal that will certainly help to boost Amgen's oncology business. A few days later, there was some more good news on Amgen's experimental drug, AMG-145, that addresses one of the major causes of cardiovascular disease. AMG-145 targets PCSK9 protein, which in turn targets LDL receptors and interferes with the liver's ability to remove bad cholesterol.

Amgen announced at the start of the month that patients with hyperlipidemia treated with AMG-145 showed reduction of LDL, or "bad" cholesterol, of up to 59%. In two studies named TESLA and TAUSSIG, the drug is being tested on patients with a rare genetic disorder, homozygous familial hypercholesterolemia, or HoFH, which results in abnormally high levels of LDL.

AMG-145 is currently in a phase 3 trial and if approved could challenge Juxtapid from Aegerion Pharmaceuticals (NASDAQ: AEGR  ) . Juxtapid was approved in December 2012 for the treatment of HoFH. Shares of Aegerion have appreciated almost 500% in one year on hopes that Juxtapid, an orphan drug, has the potential to quickly ramp up its sales. Amgen's drug could present a potential threat to long-term sales, so its development is one that Aegerion investors need to watch closely.

The bad (but not too bad) news
Amgen, along with its partner Cytokinetics  (NASDAQ: CYTK  ) announced earlier this month that their intravenous formulation, omecamtiv mecarbil meant for increasing contractility in acute heart failure, did not meet its primary endpoint of dyspnea, or shortness of breath, response. Omecamtiv mecarbil is Cytokinetics' heart failure candidate licensed to Amgen.

Financially, this is a minor blow for Amgen, which bought Cytokinetics' shares for $25 million in June and also committed up to $50 million in milestone payments for including Japan in the licensing agreement. However, it is not really that bad because it was expected. Both the developer and licensee had warned investors that they did not expect great results from the current mid-stage study because the lowest dose being tested was believed to be sub therapeutic. According to Joseph Schwartz, an analyst at Leerink Swann, "These results are in line with our expectations since the study was underpowered to hit its primary endpoint." 

However, the company is not giving up yet. Amgen announced that the decision on "the future of the molecule" will be taken only after studying the data "very very carefully."

In addition, it plans to conduct more studies on the drug and explore the improvement observed in dyspnea response in a high-dose group as compared to its paired placebo group. Also, phase 2 trials of the oral formulation of the drug is continuing for evaluation of safety and efficacy in patients with chronic heart failure and left ventricular systolic dysfunction.

A novel approach to heart failure treatment
Heart failure is the reduction in systolic output, or inability of the heart muscle to pump adequate blood to different parts of the body to meet their metabolic demands. Omecamtiv mecarbil, a cardiac-specific myosin activator, takes a different approach to heart failure treatment by targeting the ATP-dependent motor protein myosin. Chemical energy, which is stored in ATP, is converted into mechanical energy, allowing the myosin protein to produce a power stroke resulting in contraction.

Cardiac specific myosin activators target the central feature of heart failure, reduction in ability of the heart muscles to contract or shrink. As such, they present potentially a safer and effective alternative to existing heart failure treatments that primarily focus on the pathophysiology of the disease. 

Analyst opinions
Analysts have differing opinions on the results of omecamtiv mecarbil. Christopher Granger of Duke University Medical Center finds them disappointing with little hope from the second trial despite the favorable response observed in high-dose group.  However, a specialist in heart failure and president of the American Heart Association, Mariell Jessup, opines that it is too early to write off the drug. 

Conclusion
The development of AMG-145 is a clear positive for Amgen given the drug's importance in the biotech's pipeline. Omecamtiv mecarbil has potential as it represents a new and different approach to treatment of acute heart failure. I like Amgen just off the strength of the recent Onyx acquisition, but investors should closely follow results of clinical trials of these two candidates and assign value to them only after studying them carefully.

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