Amgen (AMGN) set for a big day

Shares of Amgen (AMGN) are flying higher in response to a Phase 3 trial of experimental drug denosumab, a bone strengthening medicine, worked better than a potential rival (Novartis’ Zometa) in reducing or delaying bone problems in breast cancer patients. This study only increases the likelihood that denosumab will reach blockbuster status – a “blockbuster drug” is one that generates at least $1 billion in annual sales.

Amgen expects a decision from the U.S. Food and Drug Administration on whether it can sell denosumab for osteoporosis by October 19. Amgen is also studying denosumab to see if it can prevent serious fractures and other damage that frequently occurs in patients with cancer that has spread to the bones.

Amgen currently has five blockbuster drugs, which helped push global sales to $15 billion in 2008. Still, a potential blockbuster like denosumab that could eventually generate $2 billion to $3 billion of annual revenues, could help take the pressure off Amgen’s other drugs, which are facing higher scrutiny from the FDA as well as increased competition from both branded and biosimilar (generic biologic) drugs.
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Peter J. Lazaroff