Amgen shares fall on drug fears
Shares of Amgen Inc. fell Monday amid rekindled worries over the safety of the biotechnology firm’s core anemia drug business and an analyst downgrade.
Researchers at the Mayo Clinic in Rochester, Minn., reported Monday that use of erythropoiesis-stimulating drugs, or ESAs, may be associated with a higher risk of leukemia among people with a rare bone marrow disorder called myelofibrosis.
On another front, Lazard Capital Markets analyst Joel Sendek said in a client note that new data from an analysis of past anemia clinical trials suggested that mortality risk might be higher than previously reported in trials that targeted higher hemoglobin levels.
The new meta-analysis data was presented at the American Society of Hematology’s annual meeting in Atlanta.
Sales of anemia drugs, including Amgen’s Aranesp and Epogen as well as Johnson & Johnson’s Procrit, have declined since March, when the Food and Drug Administration put its strictest “black box” warning labels on the drugs.
The new label warned doctors to use the lowest dose needed to avoid blood transfusions and not to exceed the upper hemoglobin safety limit of 12 grams per deciliter of blood.
The FDA strengthened the safety warning in November to reflect concerns that the drugs elevate risk of death, heart attack, stroke and the progression of certain cancers.
Amgen said late Thursday it was advised that the FDA’s Oncologic Drugs Advisory Committee would conduct another review of the safety of the entire class of oxygen-boosting anemia drugs in the first quarter of 2008.
Amgen and Johnson & Johnson recently rattled investors by reporting trial results showing safety risks that were serious but not statistically significant in patients with breast cancer and cervical cancer.
Thousand Oaks-based Amgen reaped $6.6 billion, or nearly half of its sales, from Aranesp and Procrit last year. J&J; is less reliant on anemia drug sales.
Sanford C. Bernstein & Co. analyst Geoff Porges on Monday downgraded Amgen shares to “market perform” from “outperform” before the release of the Mayo Clinic study results.
“These events, and their downside impact, suggest to us that neither the company’s earnings multiple nor its earnings outlook are likely to improve through at least the first part of 2008,” said Porges, who also reduced his target price to $60 from $67.
Shares of Amgen fell 2.1%, or $1.11, to $50.99. Its high for the year was $76.95 on Jan. 22.
