Showdown Looms Over Arthritis Medications

In large stainless-steel tanks that look as if they belong in a beer factory, Abbott Laboratories Inc. is brewing what could become the next big rheumatoid arthritis drug.

Abbott’s Humira, already tested in 2,300 patients, poses a direct threat to Enbrel, the rheumatoid arthritis treatment that is the crown jewel of Amgen Inc.’s $9.6-billion acquisition of Immunex Corp. Though Humira is months from market, the rivalry between Abbott and Amgen already is intense.

The competition for patients got off to an early start this month as Abbott made Humira available to as many as 5,000 people with advanced disease through a clinical trial. Abbott expects to grab some of the 32,000 patients who are on a waiting list for Enbrel, a drug in high demand but in chronic short supply.

The showdown with Abbott may decide whether Amgen’s decision to buy Immunex last December was a stroke of genius or a costly blunder. Amgen, based in Thousand Oaks, grew into the world’s largest biotechnology company chiefly by protecting the monopoly held by its anti-anemia drug, Epogen.

With Enbrel, Chairman and Chief Executive Kevin W. Sharer is taking conservatively run Amgen into one of the most competitive drug categories in biotechnology. Amgen has lowered Enbrel sales forecasts twice since the takeover.

Analyst Martin Auster of SunTrust Robinson Humphrey said Amgen won’t make money on Enbrel until 2005, a year later than expected. “It is hard to understand why they felt a need to do the deal,” he said.

Shares of Amgen rose $1.11 to close at $49.79 on Nasdaq on Friday. Abbott rose 63 cents to $43.08 on the New York Stock Exchange.

The adversaries will square off this weekend in New Orleans at a medical meeting attended by 8,300 arthritis specialists. For Abbott, the scientific conference offers a critical opportunity to tout Humira, which it cannot advertise because it is an unapproved drug.

Abbott executives predict patients will prefer Humira, a longer-lasting drug that is taken less often than Enbrel. Humira is taken twice monthly; Enbrel is a twice-weekly drug. The medications are injected, like insulin.

“For some patients, that will make a difference,” said Northwestern University rheumatologist Eric Ruderman. A consultant to Amgen and Abbott, Ruderman said the drugs otherwise appear comparable. The drugs block TNF, a molecule responsible for the joint inflammation of rheumatoid arthritis, which affects 2.1 million Americans.

“There is going to be a big marketing battle, and no one knows how it is going to play out,” Ruderman said.

The early outcome hinges on when Amgen can end a two-year shortage of Enbrel that has driven the number of patients on the drug below 79,000 from 85,000 in March. Since Amgen closed the Immunex purchase in July, completion and approval of an Enbrel factory in West Greenwich, R.I., has been its top priority.

Teams of outside experts have poked around every corner of the plant in preparation for a Food and Drug Administration inspection next month.

A clean review from the FDA would allow Amgen to open the factory before Humira’s expected launch in April.

At the same time, Amgen must rebuild the confidence of patients and doctors who stopped using Enbrel as supplies tightened. A week after Abbott announced its clinical trial, Amgen moved to blunt the effect by launching a 5,000-patient trial of its own for people with rheumatoid arthritis, using supplies of Enbrel made in Rhode Island that have not been cleared for sale.

In advance of this weekend’s medical meeting, Amgen took influential doctors on a tour of its factory, hoping to create a buzz among rheumatologists.

Abbott, too, is courting physicians. For months now, it has sponsored dinner meetings where clinicians who are consultants to Abbott lecture doctors about rheumatoid arthritis and answer questions about Humira. Five hundred doctors have expressed interest in offering the drug free to patients in Abbott’s clinical trial.

Leading a tour of Abbott’s factory in Worcester, Mass., last week, production chief Peter Moesta showcased twin 6,000-liter tanks that can produce enough Humira to supply 200,000 patients annually, more than twice the number of people on Enbrel.

To build its stockpile, Abbott also is using a 3,000-liter tank to grow colonies of cells programmed to produce Humira, an antibody drug.

By contrast, Amgen’s new factory will use six 8,000-liter tanks to produce enough medication for 100,000 patients, Moesta said. Amgen depends on outside contractor Boehringer-Ingleheim for current supplies of Enbrel, which is tricky to make.

After the tour, Abbott gathered 10 grateful rheumatoid arthritis patients who received Humira in a clinical trial. Their doctor, Charles Birbara, an associate professor of medicine at the University of Massachusetts, said three of the 75 patients he has treated with Humira have had serious side effects: tuberculosis, an unusual lung infection and encephalitis.

Abbott released a study Friday showing that the infection rate among patients on Humira was about the same as for patients taking only traditional rheumatoid arthritis drugs, such as methotrexate. The study didn’t compare Humira with Enbrel.

The timing for FDA approval of Humira isn’t certain. The agency has been accused lately of dragging its feet, and Abbott’s half-million-page application for the drug, hauled to Washington from Chicago in an 18-wheeler, was the largest ever submitted to the FDA.

And Abbott has a history of manufacturing problems. It relaunched Abbokinase this month after withdrawing the blood-clot buster in 1998 because of quality lapses.

Still, Abbott isn’t Amgen’s only worry. Genentech Inc., Biogen Inc. and Pharmacia Corp. are among a clutch of companies developing drugs for inflammatory disease.

In June, a Johnson & Johnson drug knocked Enbrel from its perch as the best-selling biotechnology drug for inflammatory disease. Until recently, J&J;’s Remicade hadn’t been viewed as competitive with Enbrel because it causes allergic reactions in some patients and must be administered intravenously by doctors.

Sales of Remicade, which also is used for Crohn’s disease, a bowel disorder, rose 63% to $293 million in the third quarter. Enbrel sales sank 7% to an estimated $185 million during the same period.

Analysts and physicians doubt that Amgen will reclaim patients doing well on Remicade, which should post more than $1 billion in sales in 2002, compared with less than $800 million for Enbrel.

In the eyes of some, Amgen can afford to lose rheumatoid arthritis patients to competitors because Enbrel is the only biotechnology drug approved for psoriatic arthritis, which affects at least 500,000 people.

“Amgen’s strategy is to press ahead in other indications,” said Deutsche Bank Alex. Brown analyst Dennis Harp.

Even so, Amgen must do everything right to make the Immunex purchase pay off as promised, with Enbrel sales of $3 billion by 2005.

Recently, Lehman Bros. analyst Craig C. Parker predicted that the market for all drugs in Enbrel’s class would total just $4 billion by 2006. If he’s right, Amgen needs to capture every penny that does not already go to J&J; to reach its previously stated goal.

Said Amgen Vice President Kevin Young, head of the company’s Enbrel business, “It is going to be an interesting spring.”