Promising White Blood-Cell Drug Award of Patent Boosts Amgen Stock

Investors last week bid up the price of Amgen stock on news that the small Thousand Oaks company has been awarded the first U.S. patent on a promising biotechnology drug that triggers production of white blood cells and may help treat cancer patients undergoing chemotherapy.

But biotechnology analysts have cautioned that while Amgen probably has cemented its lead in producing the white blood-cell drug called “granulocyte colony stimulating factor,” or G-CSF, there are four similar drugs being developed by rival companies including Schering-Plough, Japanese rival Chugai Pharmaceutical Co., and Genetics Institute, a small biotechnology company in Cambridge, Mass. All of which makes it unclear which company, or companies, will emerge as the dominant provider of white blood-cell drugs.

Genetics Institute is hurrying to complete its work on a slightly different drug called GM-CSF that also produces white blood cells. Bruce Eisen, chief patent counsel for Genetics Institute, conceded that despite all the new white blood-cell drugs being developed, “Frankly, to this day nobody is sure of their exact clinical properties, which is why they are being tested.”

None of these drugs has been approved for sale yet by the U.S. Food and Drug Administration. Still, Peter Drake, an analyst with Vector Securities International, pegs the annual domestic market for white blood-cell drugs at $400 million a year by 1993, with over half of that for cancer patients undergoing chemotherapy. He also believes that the drugs may be useful in treating burn patients, bone-marrow transplants and perhaps AIDS patients.

Stimulate Cell Production

All of these drugs are hormones that help produce white blood cells in the bone marrow. The most common of the white blood cells are called granulocytes and play an important role in supporting the immune system by fighting off bacteria.

Cancer patients undergoing chemotherapy have many of their white blood cells destroyed and may develop serious infections. Amgen is concluding promising clinical tests on G-CSF, and the hope is that patients given G-CSF can withstand greater doses of chemotherapy that can kill the cancer cells without destroying or depleting the number of white blood cells.

In biotechnology, scientists isolate genes and splice them together to produce large quantities of hormones and proteins that occur only in small amounts in the body. Thus they are available, often for the first time, for use as therapeutic drugs.

Eisen said he expects both G-CSF and GM-CSF to be approved for sale by the FDA by early 1991. Amgen spokesman Mark Brand said Amgen expects to file this summer for FDA approval to sell G-CSF. The typical wait for FDA approval to sell biotechnology drugs has been about two years.

Although there are various white blood-cell drugs being developed, Amgen’s patent award was significant, said Jim McCamant, editor of Medical Technology Stock Letter in Berkeley, because Amgen was in a close race with Chugai. But Amgen’s patent appears to be comprehensive, he said, and covers both the gene work and the process of manufacturing G-CSF in the laboratory. “It’s unlikely for there to be other patents that would cause Amgen problems,” in the G-CSF area, he said.

G-CSF figures to be Amgen’s second commercial biotechnology drug. The company expects to receive FDA approval this month to sell erythropoietin (EPO), an anti-anemia drug that produces red blood cells and has a potential U.S. market of $400 million a year. Although analysts said Amgen is about six months to a year ahead in the race to be the first to market EPO in this country, it is locked in several EPO patent-infringement lawsuits with Genetics Institute and its U.S marketing partner, Chugai. The lawsuits have yet to be resolved.

Still, Amgen’s strong position in two promising drugs accounts for the company’s $685 million stock market value, second among all biotechnology companies behind only Genentech.

McCamant believes that chemotherapy will make up the biggest market for the white blood-cell drugs, and he favors Amgen’s G-CSF drug over the others “because G-CSF may not have as many side effects.”

Possible AIDS Application

G-CSF, as well as other white blood-cell drugs, may prove useful in treating AIDS patients. Although Brand cautioned that there is still a lot of research to be done, he said that UCLA is testing G-CSF on AIDS patients undergoing treatment with AZT, the only drug approved for sale in this country that seems to inhibit the AIDS virus. The problem with AZT is that it has various side effects.

“AZT kills good cells and bad cells. There is a possibility that by keeping the white blood cell count up high you would not have some of the side effects with AZT,” Brand said.

A hospital in Boston is testing a similar drug, GM-CSF, with AIDS patients as well, Eisen said.

Although there is still plenty of uncertainty over which company will dominate the white blood-cell market, news of Amgen’s patent has continued to buoy the stock. Amgen’s stock closed Monday at $41.00 per share, up $2.00 since the patent award was announced.