A complete response letter for Amgen's (NASDAQ:AMGN) osteoporosis candidate romosozumab is hardly a surprise. More puzzling is the fact the company is seemingly pushing ahead with the project in spite of worries over serious cardiovascular events.
After a series of disappointments Amgen is in desperate need of new growth drivers, which is likely a factor in its decision. Although romo's 2022 forecast has come down dramatically over the past few months, it is still the company's second-biggest pipeline project, according to EvaluatePharma consensus (see table below).
However, Bryan Garnier analysts believe the approval of romo, under the brand name Evenity, will now be pushed back to at least the second half of 2018 - if it gets the go-ahead at all, which is "far from a certainty".
One problem is that the resubmission will include data from the Arch trial, which found an increased number of serious cardiovascular side effects with romo (More break than make for Amgen as Romo trips over safety, May 22, 2017). The Arch trial did show a significant benefit on both vertebral and non-vertebral fractures - the earlier Frame trial had failed to show a reduction in the latter as well as raising another potential safety issue, osteonecrosis of the jaw.
All of this means that, even if approved, romo will likely struggle to make headway as an expensive biologic in a market awash with generic bisphosphonates.
Amgen also has a newer rival in the form of Radius Health's daily injectable parathyroid analogue Tymlos, which got the thumbs up from the FDA in April and is expecting a decision in Europe this month. Essentially a me-too version of Lilly's (NYSE:LLY) Forteo, it has shown a benefit over Forteo on bone mineral density measures, but could run into problems when Lilly's product comes off patent next year.
This could be one reason why Tymlos is not forecast to trouble the top-five osteoporosis drugs in 2022, with EvaluatePharma's sellside consensus forecasting sales of just $157m. HC Wainwright & Co analysts are more optimistic, estimating that revenues will approach $1bn by 2025, citing an under-diagnosed and under-penetrated osteoporosis market.
Radius's share price fell as much as 8% in trading this morning - perhaps some investors saw the event as chance to sell their shares, or saw the appointment of a new CEO, the ex-Novo Nordisk exec Jesper Høiland, as a sign that a long-awaited buyer will not emerge and Radius will be forced to market Tymlos itself in the US; the company has said it will seek a partner in Europe.
Radius is also developing a transdermal patch version of Tymlos. Currently in phase II, this could expand the market for the drug by 25-30% by addressing the arduous dosing schedules that hinder compliance with bisphosphonates (Event - Radius hopes for big break with abaloparatide, September 13, 2016).
With $282m in the bank at the end of March, Radius might need to raise more cash to launch Tymlos effectively, and it has formidable competitors in the form of Amgen and Lilly. But, with the romo rejection, the smaller group has a window in which to make the most of its advantage.