Amgen Ready for Infusion : After a 5-Year Dry Spell, It Has 2 Promising New Drugs

Amgen Inc., the Thousand Oaks-based biotechnology giant, has pumped $1.6 billion into research and development over the last five years without a new drug to show for it.

But now, the dry spell may be over.

Amgen, which last introduced a new drug in February 1991, now has 11 drugs in human tests, two of which the medical community is excited about and anxious to use. Analysts consider the two drugs an all-but-sure bet to win Food and Drug Administration approval in the next few years.

Amgen needs some new products because while it has skillfully milked the market for its two existing biotech drugs, rival drugs now in development will probably start eating away at the company’s near monopoly in a few years, analysts say. The firm dearly needs a new source of revenue.

Amgen’s current two drugs are red and white blood cell biotech drugs that help treat everything from AIDS to cancer. Those two innovative drugs now dominate their markets, and thanks to them Amgen posted a 31% jump in its net income, to $322 million, on a 16% rise in revenue, to $1.1 billion, for the six months ended June 30.

But Amgen’s two drugs soon “will be facing severe competition for the first time,” said Jim McCamant, editor of Medical Technology Stock Letter.

Having a new pair of drugs will get Amgen, along with its competitors, into a likely $1.5-billion-a-year market. While neither of Amgen’s new drugs will match the $1-billion-a-year blockbuster sales of its current drugs, these new drugs are still likely to produce a hefty 25% profit margin for every $1 in revenue, McCamant said.

“This is a very significant thing for shareholders,” McCamant said. “No. 1, the drugs probably should grow [in sales] for a while, and it will be the first new revenue” for Amgen since the start of the decade.

One of Amgen’s two new promising drugs treats breathing problems in patients with Lou Gehrig’s disease. The other aims to stop chronic bleeding in cancer patients.

Lou Gehrig’s disease, named after the Baseball Hall of Famer who died from it at age 37 in 1941, is formally known as amyotrophic lateral sclerosis. It’s a disease of the nervous system that usually strikes young people, and although their minds stay sharp, they gradually become paralyzed and die, usually within five years. Many ALS patients suffocate to death when their breathing muscles stop.

About 5,000 people are diagnosed with ALS each year in the U.S., and about 30,000 people now have the disease. There is no cure, but there are several drugs on the horizon.

One is Rilutek, developed by Rhone-Poulenc Rorer. It attempts to slow damage to the body’s nerve cells, which control muscles. It came to market in January, even though the drug had some mixed test results and the cost is about $7,200 a year per patient.

“Physicians are sort of using it with a shrug, like we have nothing else,” said Stephen Sabba, analyst with Sturza’s Institutional Research.

A small biotech company, Cephalon Inc., is about to apply for FDA approval to sell its own ALS drug.

Amgen’s entry into the ALS field is called BDNF, and in early human tests it seemed to slow the loss of breathing capacity in patients.

“The language in this disease is a bit awkward. These people are never improving. They are just deteriorating more slowly” if these new drugs work, Sabba said.

Amgen is testing BDNF on 1,000 ALS patients, an enormous study given the small universe of those afflicted with the disease.

“We didn’t have any trouble recruiting patients,” said Leonard Schleifer, chief executive of Regeneron Pharmaceuticals, Amgen’s partner in the drug.

“A lot of ALS patients eventually die from an inability to breathe or from complications of pneumonia,” said George Morstyn, Amgen chief medical officer. His hope is that BDNF will “help slow down significantly” the now-inevitable weakening in lung strength among ALS patients.

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Final test results should be out early next year, and if they look good, Amgen-Regeneron is expected to apply for FDA approval soon after. Given the severity of this disease, the FDA could approve BDNF in six months.

Analysts peg the potential market for ALS drugs at $250 million to $500 million a year in the U.S.

Regeneron, a small Tarrytown, N.Y., biotech company that uncovered BDNF, needed financial help and teamed up with Amgen, which is now running the human tests.

Amgen could pick up research that may be valuable for other nervous system diseases, such as Parkinson’s or Alzheimer’s. It’s now testing BDNF in Europe to see if the drug can treat limb numbness and nerve damage in diabetic patients.

Within the medical community, the thinking is that Amgen wouldn’t have bankrolled such a big trial for BDNF unless it was fairly sure it had a winner.

“I’d say there’s a very good probability [BDNF] does work. . . . So people are really waiting for the end of the year to see that data coming out” of the final trials, Sabba said.

Amgen’s other major drug in progress is MGDF, a gene-spliced copy of a protein that produces platelets, the oval-shaped disks that make blood clot. Doctors have been hoping for a platelet drug for decades to stop chronic bleeding, especially in cancer patients undergoing chemotherapy.

Amgen is in a three-way race in this arena. The market for effective platelet drugs is pegged at $500 million to $1 billion a year in the U.S.

Amgen’s MGDF is being tested at many of the same medical centers where its white blood cell product, Neupogen, turned out to be a wonder drug.

“I’m impressed. [MGDF] does what it’s advertised to do with minimal side effects. It looks like Neupogen. I think it will get approved,” said Dr. Gary Schiller of UCLA’s School of Medicine.

Lung cancer, ovarian cancer and bone marrow transplant patients often develop low platelet counts because chemotherapy wantonly kills both good and bad cells. Patients with low platelet counts often suffer heavy bleeding in the intestines, mouth, lungs or brain, which can be fatal.

The only option for doctors is to stop or slow chemotherapy and give platelet transfusions. But transfusions are expensive, short-term measures, because the body eventually develops an immunity to outside platelets. Meanwhile, the cancer cells can keep growing.

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The early medical returns have doctors enthusiastic, but Amgen has two rivals to worry about.

Genentech, in South San Francisco, has a similar platelet drug called TPO that’s also earned sterling results in human tests. Both Amgen’s and Genentech’s drugs could hit the market by 1999.

It’s also unclear which company will get the dominant patent for the two drugs. Amgen’s MGDF drug has additional material attached to it that the company claims lengthens the drug’s half-life and which analysts speculate may enable doctors to use Amgen’s platelet drug in smaller doses and less often.

“Until patent courts rule, nobody knows how similar or different” the two rival drugs are, said Amgen spokesman David Kaye.

Both companies are at least a year behind Genetics Institute Inc. in Boston, which has a different platelet drug in development called IL-11. But Genetics Institute’s drug has a broader impact on the body, analysts say, and it may eventually show more side effects.

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Seeking New Growth

Biotechnology giant Amgen has made its fortune through two blockbuster drugs, but it’s struggled to get a third to market. It now has 11 experimental drugs in human tests, with two close to receiving FDA approval. A look at Amgen’s resume:

POSSIBILITIES:

* Amgen and Regeneron Pharmaceuticals are in final tests of BDNF, which is designed to treat breathing problems, on patients who suffer from Lou Gehrig’s disease, a fatal nervous system disorder. Only one other such drug is now available. Analysts say the potential market is $500 million annually.

* MGDF aims to stop chronic bleeding in cancer patients undergoing chemotherapy by spurring production of platelets, which help blood clot. Tests in humans have been impressive. The market for platelet drugs is potentially $1 billion a year. Two other companies are developing platelet drugs.

BLOCKBUSTERS:

* Neupogen, a drug that stimulates the production of certain white blood cells, is used to ward off infections in patients undergoing chemotherapy. Neupogen sales were $936 million n 1995.

* Epogen stimulates the production of red blood cells and is used in the treatment of anemia associated with chronic renal failure in patients on dialysis. Epogen sales were $882.6 million in 1995.

PROFIT:

Quarterly earnings, in millions of dollars:

1994, 4th quarter: 4.8*

1996, 2nd quarter: $178.7

*Sharp drop was due to costs related to Amgen’s acquisition of Synergen Inc.

Sources: Times staff and wire reports

Researched by JENNIFER OLDHAM / Los Angeles Times