Amgen's Bone Density Drug Needs to Prove Itself

| About: Amgen Inc. (AMGN)

You can see by the market's reaction to recent trial results what it thinks of this marketplace and the potential for Amgen (NASDAQ:AMGN). This is a very different market than cancer -- much tougher to crack, lower-margin drugs and less growth potential. I don't think the results will push the company forward too much.

Denosumab, if approved, will eventually go head-to-head with very-low-cost generic Fosamax, a market leader -- and Fosamax (from Merck (NYSE:MRK)) is a pill, while Denosumab requires an injection.

The Amgen drug may only succeed with later-stage patients not responding well to Fosamax or comparable drugs, depending on how it compares in a head-to-head trial that will produce data in the first half of 2008.

A lot depends on that trial -- if Amgen's drug does not do demonstrably better in trial, why would a patient or their payer pay for an expensive injectible compared to an oral, low-cost generic?

Bottom line: stay away from Amgen until it hits 40 -- and when it hits 40, continue to stay away until it produces more and better news about its pipeline.

AMGN 1-yr chart: