Amgen: Strengthening Bones, Weakening Cancer?

When Amgen (AMGN) put its new treatment for the bone-thinning disease osteoporosis up for review by the Food & Drug Administration last year, it got an unwelcome rebuke. On Oct. 19 the agency came back with a request for more information on how the company plans to manage infection risks associated with the medicine.

Amgen CEO Kevin Sharer recently told investors the company will submit the required information "very soon." In the meantime, Amgen is pushing the drug, called denosumab, toward a very different goal—keeping cancer from metastasizing into bones in patients with breast and prostate cancer. If it works, analysts say the payoff could help revive the company's fortunes. "The real money is in cancer," says Craig Gordon, an analyst with Cowen & Co. (COWN) in New York.

Nobody doubts there is immense demand for drugs like this one. Some 65% to 75% of advanced breast and prostate cancer patients eventually suffer bone metastases. The resulting swelling and fractures can cause excruciating pain and may require radiation, chemotherapy, or amputation. To ease the agony and strengthen the bones, doctors prescribed $1.4 billion worth of a bone-boosting drug called Zometa, from Novartis (NVS), in 2008. Denosumab could be bigger, some analysts say—in part because patients receive it in simple injections while Zometa requires lengthy infusions.

Denosumab is a synthetic antibody that inhibits a protein the body uses to break down old bone. The protein is part of a natural replenishing process, but too much of it can lead to osteoporosis. Cancer also has an insidious way of stimulating production of the protein to facilitate its attack.

If denosumab is approved, Cowen's Gordon estimates that its use for osteoporosis might bring in $1.4 billion annually by 2014. If it also proves effective against bone metastasis, sales could soar to $6 billion, nearly twice as much as the drugmaker's current top seller, he says.

Amgen investors are paying close attention partly because the Thousand Oaks (Calif.)-based company has taken a beating in recent months. Its stock fell 2% in 2009 while the Nasdaq Biotech Index rose 16%. That drop came after sales of Amgen's anemia drugs, accounting for 34% of revenue, fell 16% in two years through 2008 because of safety issues. Studies supporting denosumab's cancer benefit could boost Amgen's shares about 20% this year, analysts say.


Even if the FDA approves denosumab for osteoporosis, however, no one can predict how well it will perform against bone metastases. The first indication will come sometime this year when Amgen releases initial results of a trial involving 1,400 prostate cancer patients. Dr. Matthew R. Smith, the research chief who heads the study at Massachusetts General Hospital in Boston, says the drug has a good chance of succeeding. "The bone microenvironment is very rich soil for cancer to grow," he says. "Denosumab changes that microenvironment by inhibiting bone turnover. It may also have a direct antitumor effect."

Once approved, how will denosumab fare against Zometa and other bone-strengthening drugs on the market? Early signs look good. At the recent San Antonio Breast Cancer Symposium, a study of denosumab's impact on bone strength showed it cut the rate of fractures and other bone complications in patients with breast cancer better than Zometa and had fewer side effects. Amgen says it expects to release data from a similar study on building bone strength by the end of March.

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