Nov. 2 (Bloomberg) -- Amgen Inc., the world’s largest biotechnology company, is developing a new anti-cholesterol medicine by 2015 that it sees as its best shot to offset reduced sales when its popular anemia drugs lose exclusivity.
Amgen has traded at a record high by resorting to share buybacks and dividend payments, investor benefits that aren’t normally linked to biotech companies. By 2015, though, the anemia drugs Aranesp and Epogen, with a combined $4 billion in estimated sales this year, will face competition from rivals introducing cheaper follow-on versions, necessitating growth from new products.
The drug AMG-145 is one of several that companies are developing to target a cholesterol-regulating gene in the liver, a new approach to current therapies that generate $39 billion in annual sales. Some of the world’s biggest drugmakers, Pfizer Inc., Roche Holding AG and Sanofi are testing versions. Data to be presented next week at the American Heart Association meeting in Los Angeles will show how AMG-145 stacks up.
“It’s clear that the drug has blockbuster potential,” Michael Yee, an analyst with RBC Capital Markets in San Francisco, said in an interview. “AMG-145 could be a $500 million-plus opportunity for Amgen, and could be bigger depending on what parts of the market they capture.”
The market for drugs targeting the liver cholesterol gene may be at least $10 billion, said Adnan Butt, an analyst with RBC Capital Markets in San Francisco, in an e-mail. In the U.S. alone about 11 million patients aren’t keeping their cholesterol low enough with standard pills called statins, which include Pfizer’s Lipitor, and another 1 million can’t take them because of side effects such as muscle soreness, he said.
That leaves an opening for Amgen’s AMG-145, which may head to pharmacies as soon as 2015 if study results confirm its efficacy, according to Yee. That may not be soon enough. New York-based Pfizer, the world’s biggest pharmaceutical company, Basel, Switzerland-based Roche, Sanofi, based in Paris, and its development partner on the drug, Tarrytown, New York-based Regeneron Pharmaceuticals Inc. are all racing to be first to sell their own inhibitors of the gene, called PCSK9, a status that can lead to market dominance.
Sanofi and Regeneron are testing their drug in the third of three clinical trials typically required for U.S. regulatory approval. Amgen said it will start its Phase 3 testing sometime next year.
Amgen fell less than 1 percent to $86.45 at the close of trading in New York. The company’s shares have gained 35 percent this year.
“Neck and Neck”
Amgen, Sanofi and Regeneron are running “neck and neck” to get Food and Drug Administration approval, said Steven Nissen, head of cardiology at Cleveland Clinic in Ohio. The class is eagerly awaited by physicians, he said.
“These drugs produce very substantial reductions in LDL cholesterol levels,” said Nissen, an unpaid consultant to Amgen on its PCSK9 inhibitor program, in a telephone interview. “It’s a big step in the right direction.”
For Amgen, winning the race is crucial. The medicine could become the first new blockbuster approved for the company since it unveiled its bone-strengthening drug, Xgeva, in November 2010. Another potentially top-selling product, the bone-growth therapy romosozumab, remains a few years away from approval as well, Christopher Raymond, an analyst with Robert Baird wrote in a September note that downgraded shares to neutral.
AMG-145 “is the biggest single thing we have in the pipeline, just in terms of raw horsepower from the perspective of how it affects patients in a positive way,” said Sean Harper, Amgen’s executive vice president of research and development, in an interview. “This is a major focus for us because of the potential for impacting the numbers of patients we’re talking about, at levels of outcomes that are very serious.”
So far, no significant side effects have been found among patients taking these medicines in clinical trials, said Nissen. One downside is that they will have to be injected, he said.
Sanofi and Regeneron’s compound reduced LDL levels 73 percent in a study, the companies said Oct. 31 in a statement. Pfizer also will release results of its drug at the heart group’s meeting next week. Roche said it will have mid-stage data from its therapy next year.
In March, Amgen said AMG-145 reduced LDL levels in patients on low- to moderate-doses of statins by as much as 81 percent, compared with a placebo in a Phase 1 study. It will report at the heart meeting on Nov. 5 and Nov. 6 how patients taking the drug alone, with statins and those intolerant of statins responded.
To be sure, even if the drug looks to be effective in those tests, it will need to be replicated in larger, later-stage trials before it can win approval from the FDA. In the meantime, Amgen will have fewer options for maintaining the earnings growth it has engineered through financial maneuvers, Baird’s Raymond wrote in a note last month.
“We do worry about the sustainability of earnings growth based mostly on price increases, share buybacks and expense leverage going forward,” he said.
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