Amgen faces more hurdles
It’s been a brutal summer for Amgen Inc. -- and the heat goes on.
After a series of regulatory setbacks, layoffs and financial jolts, the company faces additional hurdles over the next few weeks surrounding its top-selling anemia drugs, Epogen and Aranesp, which together accounted for nearly 50% of Amgen’s sales last year.
Depending on how the next month plays out, Amgen’s recent blues could begin to lift. But should some of the chips not fall its way, the company’s fortunes and perhaps its two-decade-long status as the industry’s leader will be more in doubt than they are today.
On Tuesday, the Thousand Oaks giant faces a highly anticipated hearing in front of a Food and Drug Administration committee. The panel could recommend restrictions on doses of the anemia drugs.
The FDA hearing comes just a week after a trial with high stakes for Amgen got underway in Boston. In that case, Amgen hopes to block a competitor’s effort to get Amgen’s patents on its anemia drugs voided. A verdict is expected by early October.
In July, the federal Medicare agency sharply reduced how the government reimburses for the anemia drugs. Amgen has criticized Medicare’s decision as “incompatible with good clinical practice,” and when the company last month announced plans to cut its workforce as much as 14%, it blamed the move partially on the Medicare decision.
Now, Amgen has begun -- with some success -- a high-profile push in Washington to get Medicare to reverse the decision.
Although such reversals are rare, the Senate passed a nonbinding resolution last week calling on the agency to reassess its new guidelines. Amgen stock -- which has fallen 25% since the start of the year -- climbed on the news.
“We are going to know a lot more about what the company’s future looks like by early fall,” said Les Funtleyder, a biotech analyst with Miller Tabak & Co. “I’m sure people inside the company are crossing their fingers.”
In the meantime, all eyes are on Tuesday’s hearing.
Dr. Rob Brenner, executive director of Amgen’s nephrology medical affairs, said the company planned to make a strong case that its drugs are safe and effective when used according to their labels. “There is no question these therapies are beneficial to patients with kidney disease,” Brenner said.
The FDA has approved Epogen and Aranesp to treat anemia in people with kidney disease. Aranesp is also approved to treat anemia associated with chemotherapy.
People without anemia normally have hemoglobin levels of 13 to 18 grams per deciliter. Research has shown that using drugs to keep anemic patients’ hemoglobin levels at 10 to 12 is beneficial because this level enables the blood to carry enough oxygen for the patient to avoid a transfusion. Before the drugs arrived nearly two decades ago, that was the best way to treat severe anemia.
In recent years, some doctors have aimed to boost anemic patients’ hemoglobin levels even higher by prescribing larger doses than the labels recommend.
But after a series of recent studies -- including a high-profile one conducted by Amgen itself -- showed the drugs could be harmful in higher doses, regulators have become increasingly cautious about the class of drugs. Johnson & Johnson sells a similar product under the brand name Procrit.
This spring, the FDA warned about risks of the drugs such as cardiovascular problems and added a black-box warning -- its most severe. But officials have said they were waiting for the outcome of this week’s hearing to make any final changes to the drugs’ labels, which would restrict use of the products.
On Friday, some analysts zeroed in on a segment of the pre-meeting briefing materials about patients who don’t respond well to lower doses of the drugs -- patients known as “hypo-responders.” The agency said such patients might be “at an increased risk for serious cardiovascular events.”
It’s estimated that as much as 20% of dialysis patients fall into this category.
Some analysts took the government’s language in the briefing as a sign it might recommend new restrictions on the drugs.
“We are incrementally cautious on Amgen after reviewing the FDA’s briefing documents for the Sept. 11” meeting, said Christopher Raymond, a biotech analyst with Robert W. Baird, in a research note.
The agency also said Friday that it was proposing to stop allowing drug makers to claim that such drugs offer lifestyle improvements such as more energy and better sleep. The FDA said Amgen agreed recently after a review of the data that it “does not support retention” of such claims.
Some patients have begun taking matters into their own hands ahead of regulators’ final decisions.
Bonnie Benton, a Mission Viejo real estate agent who has been on dialysis for three years and has regularly taken Epogen, decided not to take any more of the drug a month ago.
Although the consequence may be that Benton will have to have blood transfusions, she is willing to take the risk. “Until recently, I never questioned my meds,” she said.
On Friday, Amgen’s shares closed at $50.90, down $1.11.
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