Amgen Stock Soars as FDA Approves Antibacterial Drug

Amgen Inc.’s stock surged to a record close Thursday after the U.S. Food and Drug Administration cleared for sale the company’s latest drug, which fights bacterial infections in cancer chemotherapy patients. Analysts expect the drug to become the best-selling biotechnology drug yet developed.

The drug, called granulocyte colony-stimulating factor, or G-CSF, spurs production of white blood cells that are a key infection fighter in the body. Chemotherapy treatments destroy both cancerous cells and white blood cells, leaving patients vulnerable to sudden, potentially fatal infections. In some clinical tests G-CSF cut in half the number of chemotherapy patients admitted to hospitals because of infections. Some 225,000 chemotherapy patients are thought to be potential candidates for G-CSF treatment in the U.S.

Dr. Howard Ozer, chief of medical oncology in the department of medicine at the University of North Carolina, conducted a series of G-CSF clinical tests and expects the drug to be widely used in treating white blood cell deficiencies. The drug, he said, “is not what I call a breakthrough or a home run, but it’s definitely a triple.”

“It’s the biggest thing that’s happened to Amgen so far,” said biotechnology analyst David Stone with Cowen & Co. in Boston. Stone expects Amgen’s G-CSF sales to surpass its sales of Erythropoietin, or EPO, its first biotechnology drug, which treats chronic anemia in patients with kidney disease.

Amgen, based in Thousand Oaks, has been selling EPO at the rate of $300 million a year, making it the best-selling biotechnology drug. But while Amgen shares its U.S. market for EPO with a research partner, it has kept full marketing rights to G-CSF. Stone expects Amgen’s G-CSF sales to hit $200 million in its first full year and to rise steadily to $550 million a year by 1995.

The annual cost of G-CSF treatments, Stone said, will range from $6,000 to $10,000 per patient.

Amgen’s stock, which has more than quadrupled since early last year, closed Thursday at $95.50 per share, up $6.75 for the day.

Paul Dawson, Amgen’s vice president for sales and marketing, said G-CSF shipments would begin next week. Winning approval for a second drug “means we are on our way to being a major biopharmaceutical company,” he said.

Amgen will not have the lucrative white blood cell drug market to itself, however. Immunex Corp., a Seattle concern, is expected to win government approval soon to sell a similar drug called GM-CSF.

Another version of GM-CSF, developed in a joint venture between drug giants Schering-Plough Corp. and Sandoz of Switzerland, should be approved for sale in the United States by this summer, Stone said. In addition, Chugai, a major Japanese drug firm, and Upjohn should reach the market with their own version of G-CSF to rival Amgen’s in a couple of years, Stone said.

Jim McCamant, editor of Medical Technology Stock Letter in Berkeley, said that Immunex’s GM-CSF drug initially will be approved only for use in bone marrow transplants, a much smaller market than chemotherapy, and that “gives Amgen a nice head start.” Eventually, sales of the competing white blood cell drugs, he said, “will depend on various clinical trial results over the next few years.”

Stone said Amgen’s drug has slightly fewer side effects than Immunex’s drug, but that GM-CSF might prove more effective in preventing other infections because it spurs production of more cells.

G-CSF is a protein which triggers production of white blood cells in bone marrow.

Doctors believe these white blood cell drugs also will be useful in combatting a wide variety of bacterial infections as a result of trauma from major surgery, burns, pneumonia, alcoholism and other infections from chronic diseases. The worldwide white blood cell drug market could easily reach a couple of billion dollars in sales within a few years, Stone said.

The value of all of Amgen’s stock has soared to $3.7 billion, by far the largest of any biotechnology company. Still, McCamant has been urging investors to sell Amgen’s stock because a federal appeals court is expected to rule shortly over conflicting EPO patents held by Amgen and Genetics Institute of Cambridge, Mass. He expects the court to force Amgen to share the EPO market with its rival.