Amgen Gets Romo FOMO

| About: Amgen Inc. (AMGN)

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".

Amgen's late-stage pipeline
Product Indication Summary Pharmacological class Global sales 2022e ($m)
Filed
Erenumab Migraine Anti-calcitonin gene-related peptide ((CGRP)) MAb 884
Evenity Osteoporosis Anti-sclerostin MAb 428*
ABP 980 Breast cancer Anti-human epidermal growth factor (HER2/ErbB-2) MAb 129
ABP 215 Non-small cell lung cancer Anti-vascular endothelial growth factor receptor (VEGFr) MAb 98
Phase III
ABP 710 (Remicade biosimilar) Rheumatoid arthritis Anti-tumour necrosis factor alpha (TNFa) MAb 224
ABP 798 (Rituxan biosimilar) Non-Hodgkin lymphoma, rheumatoid arthritis Anti-CD20 MAb 79
Omecamtiv mecarbil Congestive heart failure Cardiac myosin activator 47
Renexus Retinitis pigmentosa Ciliary neurotrophic factor ((CNTF)) -
Blisibimod IgA nephropathy B-cell activating factor ((BAFF)) inhibitor -
Trebananib Ovarian cancer Anti-angiopoietin ((ANG)) 1 & 2 MAb -
Fulranumab Osteoarthritis Anti-nerve growth factor ((NGF)) MAb -
Rilotumumab Non-small cell lung cancer Anti-hepatocyte growth factor ((HGF)) MAb -
Ganitumab Bone cancer Anti-insulin like growth factor receptor (IGF-1R) MAb -
CNP520 Alzheimer's disease Beta secretase cleaving enzyme (BACE) 1 inhibitor -
*Consensus prior to CRL. Source: EvaluatePharma.

Arch's loose keystone

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.

Top-five osteoporosis drugs in 2022
Global sales ($m)
Product Company Mechanism 2016 2022e Patent expiry
Prolia Amgen Anti-RANKL MAb 1,635 2,866 2024
Forteo Eli Lilly Parathyroid hormone 1,500 631 2018
Reclast Novartis Bisphosphonate 326 510 2013
Viviant Pfizer Selective oestrogen receptor modulator ((SERM)) 133 489 2015
Evenity Amgen/UCB Anti-sclerostin MAb - 685* 2026
*Includes Japanese sales from Astellas. Consensus prior to CRL. Source: EvaluatePharma.

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.

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