Investors Hold Their Breath for Amgen's D-Day of 2015

Published: Jul 14, 2015

Investors Hold Their Breath for Amgen (AMGN)'s D-Day of 2015
July 10, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Amgen investors are waiting with bated breath for what’s being called “the single most important decision” for the company in 2015: The U.S. Food and Drug Administration (FDA)’s upcoming Prescription Drug User Fee Act decision on cancer drug Kyprolis.

Kyprolis, used for refractory multiple myeloma, raked in $100 million sales last year as only a third-line treatment approval, and is on pace to bring in more than $500 million for 2015. That’s lead some market watchers to comment they think the drug is a shoe-in for approval, even if it’s had a rocky ride with late-stage trial results.

“I believe that Kyprolis has a compelling case for approval in the United States where progression-free survival improvements are usually more than enough to get a thumbs-up from the FDA,” wrote columnist Sean Williams over at The Motley Fool. “Overseas I'd peg Kyprolis' approval shot around about 50 percent since overall survival tends to be where the EMA focuses its efforts when approving new drugs.”

Data from Phase III trials in March showed patients taking Kyprolis as part of their drug regimen lived approximately 18.7 months without their multiple myeloma worsening, which is about twice as long as patients taking Velcade, a popular treatment produced by Takeda Pharmaceuticals and Johnson & Johnson .

Multiple myeloma is a blood cancer that kills more than 10,000 patients in the U.S. annually. Kyprolis patients showed fewer cases of weakness or numbness in their hands and feet, but had higher rates of cardiac and renal failure than those taking Velcade, Amgen said.

Amgen has been on a charm offensive with stakeholders and under immense pressure to deliver results for 10 late-stage products up to 2016.

So far, it’s brought home some serious winners. Blincyto, an immunotherapy for acute lymphoblastic leukemia, and Corlanor, a drug designed to reduce the chance of hospitalization for patients with chronic heart failure, have both overcome FDA hurdles and were approved earlier this year.

An approval for Kypolis would be an even bigger win, said Williams, even if much of that boost is already “baked in” to the company’s valuation.

“But even if Kyprolis is approved, I'd opine that it's already well-reflected in Amgen's stock price. In order for Amgen shares to head higher, Wall Street and investors are going to want to see the company successfully launch its plethora of new products,” he wrote. “If Kyprolis marches into blockbuster territory with relative ease (let's say by 2017), then Amgen's valuation may deserve a boost, and its purchase of Onyx will be vilified.”

If, however, Kyprolis doesn't gain approval in the U.S. or the EU, it could be difficult for Amgen to ultimately justify the price it paid for Onyx Pharmaceuticals, Inc., and for mgen to maintain its current valuation.

In just a matter of a few weeks we should know which scenario is most likely to play out.

In mid-June, Amgen enjoyed a boost after the FDA’s Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) voted unanimously to approve the use of Amgen (AMGN)’s Repatha (evolocumab). That was tempered however, after the FDA backpedaled by indicating it should only be used for a rare type of high-risk disease.

The panel voted 15-0, recommending that Repatha should be approved to treat homozygous familial hypercholesterolemia (HoFH). HoFH is a rare genetic disorder that results in extremely high levels of cholesterol. It has been known to cause heart attacks in children.

In addition, the panel voted 11-4, recommending Repatha be approved for other uses, primarily heterozygous familial hypercholesterolemia (FH), a similar, but less rare genetic disorder.

Analysts project that Praluent could generate $1.9 billion for Sanofi in 2020 and Repatha could generate $2.5 billion for Amgen in the same period. You can see our analyst wrap-up on the decision here.

A major concern of the panel is apparently that, even though the drug appears very effective at lowering the so-called bad cholesterol, LDL, they want evidence that the drug also shows evidence that using the drug will decrease incidents of heart attacks and strokes. This would typically require a larger outcomes trial.

On Fri, Jul 10, 2015 at 7:21 AM, Riley McDermid wrote: Amgen investors are waiting with bated breath for what’s being called “the single most important decision” for the company in 2015: The U.S. Food and Drug Administration’s upcoming Prescription Drug User Fee Act decision on cancer drug Kyprolis.

Kyprolis, used for refractory multiple myeloma raked in $100 million sales last year as only a third-line treatment approval, and is on pace to bring in more than $500 million for 2015. That’s lead some market watchers to comment they think the drug is a shoe-in for approval, even if it’s had a rocky ride with late-stage trial results.

“I believe that Kyprolis has a compelling case for approval in the United States where progression-free survival improvements are usually more than enough to get a thumbs-up from the FDA,” wrote columnist Sean Williams over at The Motley Fool. “Overseas I'd peg Kyprolis' approval shot around about 50% since overall survival tends to be where the European Medicines Agency (EMA) focuses its efforts when approving new drugs.”

Data from Phase III trials in March showed patients taking Kyprolis as part of their drug regimen lived approximately 18.7 months without their multiple myeloma worsening, which is about twice as long as patients taking Velcade, a popular treatment produced by Takeda Pharmaceuticals (TKPYY) and Johnson & Johnson (JNJ).

Multiple myeloma is a blood cancer that kills more than 10,000 patients in the U.S. annually. Kyprolis patients showed fewer cases of weakness or numbness in their hands and feet, but had higher rates of cardiac and renal failure than those taking Velcade, Amgen said.

Amgen has been on a charm offensive with stakeholders and under immense pressure to deliver results for 10 late-stage products up to 2016.

So far, it’s brought home some serious winners. Blincyto, an immunotherapy for acute lymphoblastic leukemia, and Corlanor, a drug designed to reduce the chance of hospitalization for patients with chronic heart failure, have both overcome FDA hurdles and were approved earlier this year.

An approval for Kypolis would be an even bigger win, said Williams, even if much of that boost is already “baked in” to the company’s valuation.

“But even if Kyprolis is approved, I'd opine that it's already well-reflected in Amgen's stock price. In order for Amgen shares to head higher, Wall Street and investors are going to want to see the company successfully launch its plethora of new products,” he wrote. “If Kyprolis marches into blockbuster territory with relative ease (let's say by 2017), then Amgen's valuation may deserve a boost, and its purchase of Onyx will be vilified.”

If, however, Kyprolis doesn't gain approval in the U.S. or the EU, it could be difficult for Amgen to ultimately justify the price it paid for Onyx, and for Amgen to maintain its current valuation.

In just a matter of a few weeks we should know which scenario is most likely to play out.

In mid-June, Amgen enjoyed a boost after the FDA’s Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) voted unanimously to approve the use of Amgen (AMGN)’s Repatha (evolocumab). That was tempered however, after the FDA backpedaled by indicating it should only be used for a rare type of high-risk disease.

The panel voted 15-0, recommending that Repatha should be approved to treat homozygous familial hypercholesterolemia (HoFH). HoFH is a rare genetic disorder that results in extremely high levels of cholesterol. It has been known to cause heart attacks in children.

In addition, the panel voted 11-4, recommending Repatha be approved for other uses, primarily heterozygous familial hypercholesterolemia (FH), a similar, but less rare genetic disorder.

Analysts project that Praluent could generate $1.9 billion for Sanofi in 2020 and Repatha could generate $2.5 billion for Amgen in the same period. You can see our analyst wrap-up on the decision here.

A major concern of the panel is apparently that, even though the drug appears very effective at lowering the so-called bad cholesterol, LDL, they want evidence that the drug also shows evidence that using the drug will decrease incidents of heart attacks and strokes. This would typically require a larger outcomes trial.


As New Jersey Biotech Booms, Will It Overtake Other States As Prime Location?
A week after Celgene Corporation announced it is officially the mystery buyer of Merck & Co. ’s former 1 million-square-foot R&D site in Summit, N.J., it quickly became our most popular story last week.

The company announced last Wednesday that it is buying the space, ending months of speculation about what Big Pharma company might move into the neighborhood.

The Summit, N.J. site is zoned research/office. The New Jersey site would put operations closer to some of the major biotech and pharmaceutical hubs on the East Coast.

But, by far, the most tempting part of doing business in the state remains New Jersey’s operating tax credit, which allows companies to sell their net operating losses to the New Jersey Treasury. One of the state’s most recognizable biotechs, Celgene, used the program until it became profitable, which was key to it staying in the state, said local officials.

That has BioSpace is wondering if New Jersey is becoming the new face of biotech. What do you think? Can the Garden State compete with other longtime stalwarts like California or Boston?

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