Amgen's Prostate Cancer Drug Attracts Renewed Enthusiasm From Investors

| About: Amgen Inc. (AMGN)

By Michael Fitzhugh

Amgen’s (NASDAQ:AMGN) recently approved cancer drug denosumab delayed the spread of prostate cancer to men’s bones by an average 4.2 months, stalling the occurrence of fractures, pain, and other skeletal problems according to a new late-stage study that surprised investors and boosted the company’s share price. The drug, however, did not improve the length of time men taking it can survive the cancer.

Marketed as Xgeva for cancer-related bone injury, it is the first drug to slow the spread of cancer to bones. If Amgen is able to gain approval for its use in prostate cancer it could add hundreds of million of dollars to the drug's potential sales, according to the analysts.

A lower dose of the drug, marketed as Prolia, is already approved by the U.S. Food and Drug Administration. But that approval, made in June, only permits the drug’s use as a treatment for postmenopausal women with osteoporosis who are at high risk for bone fractures. Xgeva was approved to help prevent cancer-related bone injury in November.

News of the prostate cancer trial’s result added weight to the company’s claims that the drug could reach $1.9 billion in U.S. sales by 2015 and attracted renewed enthusiasm from investors, who drove shares in the Thousand Oaks, California company up by nearly 5 percent to $56.76 in high volume trading on December 14, the day the study results were released.

Amgen noted that patients taking Xgeva in the prostate cancer trial suffered higher rates of hypocalcemia and osteonecrosis of the jaw than those in a placebo arm, but not at a higher rate than in prior trials of the drug.

Xgeva is a fully human monoclonal antibody that binds to a protein essential for the formation, function, and survival of osteoclasts, cells that break down bone.

Amgen has yet to fully analyze the study’s results, but the company expects to present a full account of the data at an upcoming medical conference, it says.