Amgen shares fall after new Prolia request

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NEW YORK -Amgen Inc. shares fell Thursday over the likelihood that the biotechnology company's next potential blockbuster will take longer than expected to reach its full sales potential in the market.

Shares shed $2.38, or 4 percent, to $57.02 in midday trading. The stock has traded from $44.96 and $64.76 in the last 52 weeks.

Late Wednesday, the company said the Food and Drug Administration had requested additional data on the proposed osteoporosis drug Prolia. The company is seeking approval for several uses, which could make it the next significant moneymaker for the company.

Specifically, the FDA asked for more data on the drug as a potential treatment for bone loss in patients undergoing cancer treatment. On Monday, Amgen disclosed that the agency wants additional studies conducted on the drug as a preventive treatment in postmenopausal women.

Wall Street, though, expects the drug to be approved as a treatment for osteoporosis in postmenopausal women in the first quarter. The company has to submit a risk mitigation plan to the FDA for that indication.

Overall, analysts still hold a positive view of the company's prospects and expect Prolia, also called denosumab, to become a blockbuster drug. But, the road to rebuilding revenue after a year of declining sales of the company's anemia drug Aranesp may take a bit longer.

"While we agree that some degree of risk remains around Prolia approval in cancer, we heard nothing on the conference call last night that increased our concerns," said Deutsche Bank-North America analyst Mark Schoenebaum, in a note to investors.

He, along with several of his peers, also brushed off separate concerns over additional, potential safety issues with Aranesp. Sales of the drug have been sinking for about a year because of stricter warnings and safety concerns, including evidence it contributed to tumor growth and decreased survival rates for some cancer patients.

The warning label already includes information on cancer patient risks, he said, adding that the impact of new safety data will be modest.

R.W. Baird analyst Christopher J. Raymond, meanwhile, also brushed off the new Aranesp safety data, calling it "commercially immaterial." He said Prolia, meanwhile, could see its first approval as an osteoporosis treatment as early as the end of 2009.

Meanwhile, BMO Capital Markets analyst Jason Zhang expects the company to use ongoing study data for Prolia to meet the FDA's request for additional information in the cancer indication. He said that data should be available by the first quarter of 2010. The drug could be launched as an osteoporosis treatment in the first quarter, he said, with other indications following through 2010 and 2011.

2009-10-22 12:05:05