Amgen / Roche / Affymax / 1402
Check out this Forbes article guys... fascinating stuff. A few things really strike me about this whole situation. Pariticularly, I knew Amgen's trouble with EPO were big.. but I really had no idea they were this big... and how much of a ripple effect its having in the industry.
There is a good summary here of Amgen's battle with ROCHE over Roche's Anemia drug Mircera, and the alleged patent infringement. There is a also a perspective on where Affymax's anemia drug fits and its time to market.
Lastly, very interesting to see comments by the Rodman and Renshaw analyst on the subject... particularly because of their involvement with Prometic.
Bottom line... its more and more evident that we are REALLY playing in the big leagues with 1402, especially if the statistical results are as compelling as we hope... Its going to be extremely interesting to see exactly how Blood Magazine characterizes 1402 and if they will editorialize where they think it might fit in this whole equation...
Its also abundantly clear to me that we MUST be getting interest from the biggest of the big players on this drug... simply because the stakes are SO HUGE... and the fact that even if we are only an insurance policy at this point.... we are worth a heck of alot of money.
Imagine what kind of interest that might get for our little microcap if the big US players start coming in and speculating on the future of the drug and the company if Blood says its viable... I think its a very real possibility...
Amgen's Next Opponents ( FORBES )
Amgen just beat back an attempt by Swiss drug giant Roche to invade its turf: the $10 billion U.S. market for drugs to treat the anemia that occurs after kidney dialysis or treatment with cancer chemotherapy.
But even as Amgen (nasdaq: AMGN - news - people ) defends its anemia franchise against threats on all sides--including cuts in what insurers and the government will pay for--investors will ask whether it can conquer a new disease: osteoporosis, the chronic bone weakening that afflicts 10 million Americans, most of them women. Amgen Chief Executive Kevin Sharer has hopes that a new drug, denosumab, could become a "double blockbuster," both as a twice-a-year treatment for osteoporosis and as a remedy for cancers of the bone.
For denosumab to succeed, Amgen will have to battle with Novartis (nyse: NVS - news - people ) and its once-a-year osteoporosis infusion, Reclast, and Merck (nyse: MRK - news - people ), which is racing toward the market with its own first-of-its-kind osteoporosis pill. It won't be on the market until 2011 but John LeCroy, an analyst who covers Merck for Natexis Bleichroeder, is already speculating it could be another Merck blockbuster.
That's a tough fight for Amgen, which has had one of the roughest years in its two-decade history. Anemia drugs Epogen and Aranesp generate half its sales. Worries that these medicines actually harm patients when overused have caused doctors to cut prescribing them. Congress has investigated the company's pricing practices, and shares are down 20%.
Roche had been battling to bring its own anemia drug, Mircera, to the U.S. Mircera, like Aranesp and Epogen, is a man-made version of a hormone that causes the body to produce red blood cells. In 2005, Amgen sued Roche, saying Mircera infringed its patents. A Boston federal court sided with Amgen, saying Mircera infringed on 11 Amgen patents. Roche said it will consider appealing; Amgen will ask for an injunction on Mircera being sold.
This decision isn't changing anyone's mind on Amgen's stock. Joel Sendek, an analyst at Lazard Capital Markets who says to sell Amgen's stock, argues that Mircera will still hurt Amgen internationally and that sales of anemia drugs are still going to be slower than Wall Street expects. But Geoffrey Porges, an analyst at Sanford C. Bernstein who recently turned bullish on Amgen, says, "This is the second or third in a series of things that are falling Amgen's way." Although the company is "not out of the woods," he thinks "serious investors" are increasingly taking a look at the stock.
A big question is whether Amgen can deliver new blockbusters before the inevitable competition to its anemia medicines arrives. Shares in biotech Affymax (nasdaq: AFFY - news - people ) rose 8% Tuesday because that biotech is developing an Epogen replacement that shouldn't infringe on any Amgen patents. It should be ready in 2011. Mircera could finally come to market a year later, when Amgen's intellectual property expires. Denosumab is the best chance for replacing the sales those competitors may steal.
Denosumab is an antibody that blocks the RANK ligand, a protein that tells the body to remove bone. With RANK blocked, bones are less likely to become brittle. But osteoporosis medicines can take a long time to test. Amgen's late-stage trial, in 8,000 women, is expected to finish up in the second half of next year. Although Amgen is not making predictions, that would make an approval possible in 2009 or 2010.
The current top osteoporosis drug is Merck's Fosamax, which generates $3 billion in sales a year. But many women don't take Fosamax or its main competitor, Actonel from Procter & Gamble (nyse: PG - news - people ), because they cause stomach upset. These drugs also can cause joint pain, and in rare cases a buildup of bone in the jaw. Reclast, from Novartis, is in the same chemical class as Fosamax and Actonel, but it must be given as an intravenously, directly into a vein. It has the same rare side effects on bone as the pills.
Reclast is long-acting--women can't forget to take their pills. In one of Novartis' biggest studies of the drug, it reduced hip fractures by 35% and the risk of death by 28%.
Denosumab works in an entirely new way. Will it turn out to be safe? Results so far are good, but it took years for questions to be raised about the anemia drugs. Some patients have allergic reactions to antibody drugs. Analyst Michael King at Rodman & Renshaw argued in September that denosumab could show an efficacy advantage over Reclast. Another advantage: Denosumab can be given as a simple shot; Reclast patients need to be hooked up to an intravenous line. But James Reddoch at Friedman, Billings, Ramsey has written notes to investors saying that Reclast is, in fact pretty good--and that its efficacy will be hard to beat.
Merck isn't going to sit down and let a biotech walk off with the osteoporosis market. Its new drug, an inhibitor of the enzyme cathepsin K, showed promising results in a mid-stage trial earlier this year. GlaxoSmithKline (nyse: GSK - news - people ) and Novartis are working on similar medicines, but are thought to be far behind. It is a pill that might escape the side effects of Fosamax and Actonel.
Amgen's research chief, Roger Perlmutter, was previously a star researcher at Merck. For several years it seemed he was building the pipeline Merck should have had, including an osteoporosis blockbuster. Now Merck, a few years ago seen as a laggard, is the drug industry's darling, and Amgen is in the doghouse. Wall Street's perception of a big drug maker can change in an instant. Can Amgen convince the naysayers?