Amgen (NASDAQ:AMGN) recently announced results from a Phase II trial evaluating romosozumab (AMG 785) in postmenopausal women with osteoporosis -- low bone mineral density (BMD).

The data, published in the New England Journal of Medicine (NEJM), demonstrated that a 12 month treatment of AMG 785  significantly increased BMD at the lumbar spine and femoral neck relative to control treatment. Most importantly, lumbar spine and hip BMD were significantly greater in the romosozumab treated group than those observed with Merck's (NYSE:MRK) Fosamax and Eli Lilly's (NYSE:LLY) Forteo. This is a HUGE deal.

There is not enough information available at this time to determine how likely it is that romosozumab's affect on BMD will translate into reduced fracture risk, but it is a question Amgen is studying. Amgen has a Phase III trial evaluating the romosozumab's potential to reduce fracture risk with results expected in 2015.

Given the extremely impressive and incontrovertible outcomes seen in phase 2 trials, I expect that Amgen's drug will gain approval for treating low BMD (osteoporosis) in postmenopausal women.

The Problem

Osteoporosis results from an imbalance between bone resorption and bone formation and it primarily affects postmenopausal women because their ability to create new bone is overwhelmed by the rate at which bone is being removed. Overtime, this bone loss leads to fragile bone structures and increases the risk of fractures. The World Health Organization has officially declared osteoporosis a public health crisis.

Pathogenesis of Osteoporosis

Adult bone exists in a dynamic equilibrium between bone formation and resorption. Osteoporosis results when this balance favors bone resorption by osteoclasts (bone resorption cells -- the "bad guys") . At the molecular level, resident macrophages in the bone differentiate to osteoclasts upon stimulation from bone stromal cells and osteblasts with RANK ligand. Activation of the RANK receptor is a major stimulus to bone resorption. This pro-osteoclastogenesis activity of the RANK pathway is regulated by osteoprotegerin (OPG). OPG is a decoy receptor that can bind to RANK ligand and prevent its binding to RANK receptor, thus blocking the formation of osteoclasts and their bone resorbing function. 

Hormonal factors play a significant role in the pathogenesis of osteoporosis, especially in postmenopausal women. Decreased estrogen levels lead to increased production of tumor necrosis factor (TNF), interleukin 6 (IL-6) and interleukin-1 (IL-1) by bone marrow elements. These cytokines enhance the pool of osteoclast cells in the bone marrow, increasing bone absorption. Additionally, estrogen stimulates the production of OPG and inhibits the formation of osteoclasts. Evidence also suggests that estrogen deficiency leads to decreased osteoblastic activity (osteoBlasts Build bone), decreasing new bone formation. Thus, bone loss due to estrogen deficiency may be caused by increased bone resorption and decreased bone formation.

The science behind romosuzumab

As discussed above, osteoclastogenesis is heavily regulated by the RANK ligand-OPG signaling axis. In turn, the RANK ligand-OPG axis is inhibited by messengers of the Wnt signaling pathway. In osteoblasts, the Wnt pathway is stimulated by activity of the LRP5/6 receptors. So, activation of LRP5/6 in osteoblasts by Wnt ligands stimulate Wnt signaling which inhibits RANK signaling, leading to an overall inhibition of osteoclastogenesis and an increase in bone mass. So the players in the Wnt pathway are the good guys.

However, this pro-bone growth pathway is potently inhibited by the action of an extracellular protein called sclerostin. Sclerostin inhibits activation of the LRP5/6 receptor causing a decrease in Wnt signaling and a consequent increase in RANK signaling. As we learned from above, increasing RANK signaling increases osteoclastogenesis leading to increased bone resorption and decreased bone mass. 

Romosozumab is a humanized monoclonal antibody that binds sclerostin and inhibits the osteoclastogenesis and decreases bone resorption, shifting the balance back toward bone formation. 

The Study

The Phase II trial was an extremely well-designed randomized double-blind placebo-controlled trial. This is the gold standard in clinical trials. Better trial design does not exist

The study was a multicenter, international, randomized, placebo-controlled, parallel-group, eight-arm study of 419 postmenopausal women aged 55 to 85 years. Study participants were randomly assigned to receive subcutaneous romosozumab or placebo monthly (70, 140, or 210 mg) or every three months (140 or 210 mg) or oral Fosamax (alendronate) (70 mg weekly) or subcutaneous Forteo (teriparatide) (20 μg daily).

The change in BMD of the lumbar spine at 12 months from baseline values used was the primary endpoint. 

The Value of the Market

According to the National Osteoperosis Foundation: "about 52 million Americans have osteoporosis and low bone mass, placing them at increased risk for osteoporosis. One in two women age 50 and older will break a bone due to osteoporosis." Osteoporosis is responsible for two million broken bones and $19 billion in related costs every year. By 2025, osteoporosis will be responsible for approximately three million fractures and $25.3 billion in medical costs each year.  The incidence rate of osteoporosis is difficult to determine because clinicians often use inconsistent definitions and diagnostic criteria. However, if Amgen's new drug succeeds only in patients who are postmenopausal women with osteoperosis, cash flows from romosozumab alone could reach $6.6 billion. Compare this to Fosamax's peak sales of $3 billion per year and Forteo's projected $1 billion by next year. If all fares well in phase III studies, romosozumab will be nothing short of a blockbuster for Amgen.