Abbott Labs to Challenge Amgen With Free Drug

Abbott Laboratories said Wednesday that it will supply an experimental rheumatoid arthritis drug free to patients who need it, a direct challenge to Amgen Inc., which is laboring to end a shortage of a similar medication.

The move by Abbott marks the beginning of a high-stakes competition for a multibillion-dollar market that is dominated by Enbrel, the crown jewel in Amgen’s purchase of Immunex last year. However, sales of Enbrel have not grown since the $9.6-billion acquisition because of a series of production snafus and a shortage of manufacturing capacity.

Abbott said it is prepared to supply the experimental drug to as many as 5,000 patients in the United States by the end of this year, or about one-quarter of the 23,000 people on Amgen’s waiting list for Enbrel.

Abbott said it will continue to supply free medication to patients until it is approved by the Food and Drug Administration, probably by April. Patients or their health insurance plans pay between $10,000 and $12,000 a year for Enbrel.

Abbott’s action increases the pressure on Amgen to complete a factory in Rhode Island dedicated to Enbrel production. Amgen has said that it expects to receive FDA approval to operate the plant in the first quarter of 2003.

Craig West, an analyst for A.G. Edwards in St. Louis, said Amgen must do everything right in 2003 in order to reach its Enbrel sales target of $1.2 billion. To make that number, he said, Amgen must have 125,000 patients on Enbrel by the end of next year, up from 79,000 in June.

An Amgen spokesman did not respond to a request for comment.

Abbott’s drug, D2E7, is considered as effective as Enbrel but is expected to be more convenient to use. Patients must inject Enbrel twice weekly, but in clinical trials patients used D2E7 twice monthly.

Abbott is offering the drug to patients through an “open access” clinical trial approved by the FDA. The company expects to begin providing the drug to patients next week, Steven Fischkoff, global clinical director for D2E7, said in an interview. Since announcing the program to the medical community last week, Abbott has received inquiries from 300 doctors, he said.

Abbott’s shares closed at $40.30, up 83 cents on the New York Stock Exchange, and Amgen shares fell 17 cents to $45.62 on Nasdaq. Abbott also announced Wednesday a restructuring that includes elimination of 3% of its work force.