Cancer bites, but Amgen (AMGN +1.65%) is going to keep biting back. In fact, it's currently developing a handful of oncology medicines that it describes as bispecific T-cell engager therapies, or BiTEs for short.
As a relatively new therapeutic modality, can these drugs pave the way for the company to become more valuable, or are investors likely to be disappointed? Let's analyze what they do -- and why -- to uncover the issue in full.
NASDAQ: AMGN
Key Data Points
These BiTEs are already leaving a mark
BiTEs are intended to treat solid tumor cancers like small-cell lung cancer, multiple myeloma, and prostate cancer, as well as blood cancers like acute myeloid leukemia (AML). To accomplish that, BiTEs act as a glue that only adheres to specific locations on tumor cells, and also to specific locations on T-cells.
When the BiTE is bound to both of those targets at once, the T-cells become alerted that enemies are nearby, and they then destroy the cancer cells with high efficiency. As a bonus, tumor cells have trouble using some of their typical defense mechanisms when they're locked in combat thanks to the BiTE. The overarching idea is to keep the body's defenders localized to the problem and energized for as long as it takes them to win.
Pretty cool, right? This technology is more than theoretical. Amgen already has six BiTE programs in clinical trials for oncology indications; two are in phase 3, the rest are in phase 1. More importantly, it has one early BiTE program commercialized already.
The drug, called Blincyto, has been on the market since 2018, and it's been approved to treat residual disease in acute lymphoblastic leukemia (ALL) since mid-2023, as well as relapsed or refractory CD19-positive B-cell precursor ALL. In the third quarter of 2023 alone, it brought in more than $220 million in sales, up 55% year-over-year.
So there's not much risk of the BiTE concept being a nothingburger, and fresh entries in the category could boost Amgen's gains still further.
In June of this year, the Food and Drug Administration (FDA) will weigh in on whether to approve a different BiTE molecule by Amgen to treat advanced small cell lung cancer (SCLC). And that could just be another early step if the company's ambitions to mint an entire line of BiTE medicines continue to come to fruition.
Is this a game-changer for the stock?
Amgen's top-line growth over the last 10 years hasn't been anything to write home about, with its trailing 12-month revenue rising by just 42%, reaching $27 billion. Any new growth drivers from its research and development (R&D) efforts, like a new platform for making oncology medicines, would be a welcome addition.
But based on sales of Blincyto, it'll take multiple BiTE candidates getting approved to add enough revenue to move the needle enough for investors to notice. This should take a handful of years at a minimum, and Amgen isn't the only one taking this approach.
Merck just agreed to buy Harpoon Therapeutics for $680 million to acquire its technology platform, which is very comparable to BiTE in terms of its capabilities and promise in treating a wide swath of solid tumor cancers. So at some point Amgen will be engaged in a competitive fight for market share, and oncologists are likely to opt for the candidate that the research says is more effective for the given niche.
As the rest of its BiTE pipeline matures, Amgen will indeed have the opportunity to gradually add billions to its annual sales, but it'll take plenty of time. Therefore, this isn't a must-buy stock on the basis of BiTE alone, though it's encouraging to see that its early foray into the space is yielding significant clinical and financial successes, and it's probable that the company will continue to rise in value over time.
