While the phase 2 test did show that the drug -- dubbed GDNF for glial cell line-derived neurotrophic factor -- is safe and well tolerated, it didn't show an improvement of symptoms in the study's patients.
Amgen says that it's currently evaluating why this study didn't yield the same results the drug had over the long term. It also said it is rethinking its approach, including considering testing GDNF at higher dosages.
Investors didn't take it out on Amgen shares too badly, with shares down about 1%. However, the stock's deflated over the last year; last July, it traded as high as $72.37, leaving it down 25% since. So, if investors took today's news well, it's probably because, despite its recent acquisitions and increasing drug sales, they haven't been too thrilled with Amgen.
It's not even like Amgen hasn't had some good news lately. For example, there was recent word that its Neulasta drug may have a wider base of patients than previously anticipated. In addition, a recent medical conference revealed data implying that Neulasta can reduce infections from chemotherapy by 90%.
Right now, Amgen trades at a mere 22 times forward earnings. Although today's news about GDNF is indeed a setback, investors' blase attitude toward the news seems appropriate, given the stock's downward trajectory and investor disinterest over recent months. Meanwhile, it may very well be a good time to consider taking a closer look at Amgen.
Talk about the pros and cons of an investment in Amgen on our discussion board devoted to the topic.
Alyce Lomax does not own shares of Amgen.