2010 was the year of the denosumab approval. Amgen (Nasdaq: AMGN) got the drug approved as a treatment for both osteoporosis and bone metastasis under the brand names Prolia and Xgeva.
2011 is just as important, if not more so. Drug approvals aren't all that useful without corresponding sales, and Amgen managed a mere $41 million in sales last year between the two. In order to hit the top of its sales guidance of 3% year-over-year growth this year, Amgen needs Prolia and Xgeva to ramp up quickly.
The challenges for Prolia are nothing new. The drug enters a crowded osteoporosis market that contains both branded drugs like GlaxoSmithKline and Roche's Boniva and Eli Lilly's (NYSE: LLY) Forteo and Evista, and generics like Merck's (NYSE: MRK) Fosamax. Doctors don't necessarily need another treatment.
On top of that, Prolia hasn't been available under many Medicare Part D prescription plans, which means doctors have to buy the drug, then wait to bill until the drug is given to the patient. Amgen is working on getting the drug covered under part D, so the patients could pay for the drug directly at the pharmacy. The patient would have to go pick up the drug at the pharmacist and bring it to the doctor to be administered, but that approach could increase prescriptions by primary-care physicians who aren't willing to purchase the drug directly now.
Amgen is also in talks with major chain pharmacies to potentially administer Prolia at their facilities, avoiding the extra trip back to the doctor. The company didn't name names, but I'd guess they include CVS Caremark (NYSE: CVS), which has MinuteClinics inside many of its stores, and Wal-Mart (NYSE: WMT) and Walgreen (NYSE: WAG), which have clinics inside some of their stores as well.
We're just two months into the Xgeva launch, but it doesn't look like the drug has the same kinds of issues. In clinical trials, the drug beat Novartis's (NYSE: NVS) Zometa in two head-to-head trials. New data shows that the drug might prevent the formation of bone metastasis in prostate cancer patients, rather than just reducing bone breaks after they've already formed. Amgen is still talking with the FDA about the data, but plans to apply for a label expansion in the first half of 2011.
The hypergrowth story for Amgen is over, but if it can ramp up sales of Prolia and Xgeva, the company could still be a solid investment from here.
