Amgen Vs. Merck, Lilly In Osteoporosis Competition

| About: Amgen Inc. (AMGN)
This article is now exclusive for PRO subscribers.

In early January Amgen (NASDAQ:AMGN) and Belgian partner UCB announced results from a Phase 2 trial evaluating romosozumab (also known as AMG 785/CDP7851) in postmenopausal women with low bone mineral density.

Osteoporosis affects many women following menopause and the disease weakens bones over time, making them thinner and more likely to break.

In Phase 2 the 12 months treatment with romosozumab, compared to placebo, significantly increased BMD (bone mineral density) at the lumbar spine, hip and femoral neck. Increases at the lumbar spine and hip were significantly greater than those observed with current treatments by Fosamax made by Merck (NYSE:MRK) and by Forteo made by Eli Lilly (NYSE:LLY).

Romosozumab is one of the most promising candidates in Amgen's pipeline.

Phase 2 results

The Phase 2 study enrolled 419 postmenopausal women aged 55 to 85 years in 28 centers worldwide. 367 patients received 1 of 5 dosing regimens of romosozumab injections (70, 140, or 210 mg once a month or 140 or 210 mg every 3 months) or one of the 2 open-label comparators: 70 mg oral Fosamax weekly or 20 microgram Forteo, injected daily. The other 52 participants received placebo injections either monthly or every 3 weeks.

The women all had low BMD that was not severe enough to be diagnosed as osteoporosis.

The primary endpoint was the percentage change in BMD from baseline at the lumbar spine at the end of 12 months.

In total, 383 women completed the 12 monthly visits and romosozumab increased the bone mineral density in their spine by 11.3 percent, compared to a 7.1 percent increase with Forteo. The new drug also performed much better than Fosamax, a bisphosphonate medication that increased spinal bone density by 4.1 percent.

Overall, the treatment is one-and-a-half to three times more effective than current osteoporosis drugs in rebuilding bone density at the lumbar spine, as reported in the Jan.1 online edition of the New England Journal of Medicine.

Michael R. McClung, MD, from the Oregon Osteoporosis Center, Portland, said:

"Most osteoporosis drugs work by stopping the progression of bone loss, but they don't have the capability of rebuilding the skeleton. This really is a new day in the consideration of how we treat osteoporosis, with the capability of truly stimulating bone production and rebuilding the skeleton, not simply keeping it from getting worse."

The new drug also appears to be safe, with no major side effects reported.

More data are needed, however, before romosozumab is approved to treat osteoporosis, a serious bone-thinning disease, in the U.S. Two Phase 3 trials are underway treating approximately 10,000 postmenopausal osteoporosis patients.

Mechanism of action

The bone is a living organ like any other it goes through cycles of breakdown and rebuilding. Two stages of the bone renewal cycle are bone resorption (breakdown or removal) and bone formation.

During resorption, special cells, called osteoclasts, on the bone's surface dissolve bone tissue and create small cavities. During formation, other cells, called osteoblasts, fill the cavities with new bone tissue.

Accordingly, there are two categories of osteoporosis medications: antiresorptive medications that slow bone loss and anabolic drugs that increase the rate of bone formation.

Antiresorptive medications are bisphosphonates, Prolia (made by Amgen) and estrogens that slow the bone loss in the breakdown part of the remodeling cycle.

Anabolic drugs, like Forteo from Eli Lilly, increase the rate of bone formation. Currently, Forteo is the only osteoporosis medicine approved by the FDA that rebuilds bone. But Forteo has had a limited success compared to other agents, due to the requirement of daily injection, a black-box warning about osteosarcoma in rats, and its high cost.

Change of direction

In February Amgen and UCB cancelled plans for late-stage testing of romosozumab for healing of fractures, and decided to focus on developing it for a potentially bigger and more lucrative market, treating osteoporosis in postmenopausal women.

The decision was based on economics but also prompted by the fact that the regulatory requirement have been tightened on drugs for fracture treatment. Romosozumab, if approved, would only be taken for a few months for healing fractures, while women with osteoporosis would take it for a year or more.


Fosamax, made by Merck, approved for sale in the U.S. in 1995, was a high flyer for a while, generating sales as much as $3 billion a year until patent protection lapsed in 2008. Merck is working on a successor, called odanacatib.

Forteo, a daily injectable drug made by Eli Lilly, was approved by the FDA in 2002. In 2012 the company reported $488 million in sales, down from its peak.

Amgen itself is marketing a drug for bone treatment under two different brand names.

Prolia was first approved by the FDA in June 2010 for preventing fractures in postmenopausal women with osteoporosis. The agency approved the same drug, with a different dosage and a different name (Xgeva) a few months later for cancer patients to delay fractures and stave off severe bone pain.

Prolia achieved more than half a billion dollars in revenue in its first full year on the market and then reached blockbuster status last year with $1.2 billion in combined Xgeva/Prolia sales. It has sold $802 million in the first half of 2013.

Separately, a small company, Radius Health, Inc (NASDAQ:RDUS) is developing BA058-SC, a potentially best-in-class bone-building anabolic agent. Radius is running a Phase 3 trial from which results, expected at the end of 2014. An injection-free transdermal version is tested in Phase 2.


Osteoporosis is a serious disease. Half of the women past menopause and older than 50 years will have a fracture due to osteoporosis. Hip fractures are a major cause of disability among older people.

According to the National Osteoporosis Foundation, an estimated nine million adults in the U.S. have osteoporosis and another 48 million have low bone mass. This means 60 percent of adults of age 50 and older are at risk of breaking a bone and should be concerned about their bone health.

In postmenopausal osteoporosis, bone-removing cells get rid of bone at a rate that is too fast. This puts postmenopausal women with osteoporosis at risk for breaking a bone. Such a break, or fracture, may be a life-changing event. About half of all women over age 50 will have an osteoporosis-related fracture, and once that happens, the chances of another are much higher.

Osteoporosis-related fractures are responsible for an estimated $19 billion in costs annually in the U.S., and are expected to rise to approximately $25 billion by 2025.

The cost of osteoporosis, including pharmacological intervention in the EU in 2010, was estimated at 37 billion euros.

Osteoporosis is the most common bone disease and is twice as common in women as in men.

Most people do not know they have osteoporosis until they fall and break a bone, usually their spine, wrist, or hip. However, it can be found out if a person has osteoporosis by measuring mineral density in the bones.

Asian markets could become particularly important.

The incidence of hip fracture has risen 2 to 3 fold in most Asian countries during the past 30 years and it is clear that men are not immune to this trend. Low calcium and vitamin D intake across the region is a potential contributor to the poor bone health in men and women.

A recent report by the International Osteoporosis Foundation cites osteoporosis as a looming crisis throughout the Asia Pacific region.

According to the report, China will have 48.5 million people suffer from osteoporotic fractures by 2050. The number of Filipinos at high risk for osteoporosis will reach four million by 2020 and 10.2 million by 2050. Up to 90 percent of Thais at high risk of osteoporosis are not identified or treated. One-in-four Indonesian women aged between 50 and 80 years are at risk of osteoporosis. More than seven million Vietnamese women will be at risk of osteoporosis in 2050.

Investors' summary

Amgen's third quarter revenues increased by 10 percent to $4.7 billion year-over-year and adjusted earnings per share increased 16 percent to $1.94.

Total product sales increased 11 percent with strong contributions from Neupogen, Neulasta, Enbrel, Prolia and Xgeva.

Combined Neulasta and Neupogen sales increased 18 percent year-over-year, Enbrel sales increased 7 percent, Aranesp sales decreased 10 percent and Epogen sales were flat.

Xgeva sales increased 30 percent in the third quarter to $261 million and 5 percent on a sequential basis, reflecting increased segment share.

Prolia sales increased 62 percent year-over-year to $178 million due to increased segment share and decreased 5 percent on a sequential basis impacted by seasonality.

The company generated $1.6 billion of free cash flow in the third quarter, in line with the third quarter of 2012.

Debt outstanding at the end of September included $3.1 billion from bank loans to fund the acquisition of Onyx Pharmaceuticals, which closed on Oct. 1, 2013. The Company received an additional $5 billion of bank loans on Oct. 1, to complete the acquisition.

The Company's fourth quarter dividend of $0.47 per share was paid on Dec. 6. The Company did not repurchase its own shares in the quarter.

For the full year of 2013, the Company expects total revenues to be in the range of $18.3 to $18.5 billion, and adjusted EPS to be in the range of $7.35 to $7.45.

The osteoporosis program is relatively small compared to other programs like Amgen's massive late-stage effort to develop AMG 145, a potential blockbuster cholesterol drug that targets the PCSK9 protein. Amgen also has other large programs like the biosimilars venture jointly run with Actavis.

But romosozumab is a very promising compound aimed at a huge market and expected to reach sales of $905 million in 2022, following its anticipated launch in 2016.

In biotech you can never be sure how different gambles work out: sometimes huge projects fail and smaller ones turn out to be the real money makers.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.