Amgen's bone drug gets delayed by the FDA, and Wall Street isn't surprised

Drugmaker Amgen (AMGN) did not win the Food & Drug Administration's approval on Monday for its experimental osteoporosis treatment denosumab. Amgen, based in Thousand Oaks, Calif., had been banking on the drug's approval for company growth, but the FDA asked for more information before making a decision. Although the news was unsurprising, clearly, the road ahead for the drug is far bumpier than initially Amgen, analysts and investors had envisioned.

It's unclear how much time Amgen will need to meet the FDA's requests. Amgen applied in February for approval of denosumab -- or Prolia, by its trade name -- which it's studying in a range of bone-loss conditions, including rheumatoid arthritis and bone loss from treatment for breast and prostate cancer, and for its potential to delay bone cancer metastases and to inhibit and treat bone destruction across many stages of cancer.

The FDA did not ask for further clinical trials, although it requested more information on the design of Amgen's submitted post-marketing surveillance program and a new clinical program to support approval of denosumab for the prevention of postmenopausal osteoporosis. Amgen expects to receive a separate response for its application for treatment of bone loss caused by hormone treatments in breast or prostate cancer.

The FDA also has determined that denosumab must have a risk-evaluation and mitigation strategy (REMS), to weigh a new drug's benefits against known or potential adverse events after it's widely distributed. Amgen says the FDA has acknowledged receipt of its previously submitted proposed REMS materials and is trying to determine appropriate next steps. "We are confident that we can quickly respond to the FDA's requests," said Roger M. Perlmutter, Amgen's executive VP of research and development.

But not everybody agrees. Sally Church wrote in the Pharma Strategy Blog: "Whether the company has the sales muscle to compete in a highly competitive mass market segment with primary care doctors instead of specialists such as medical oncologists is a whole different ball game."

Although analysts had widely expected an FDA delay, Amgen shares dropped about 1.5 percent by midday, Dow Jones Newswire reported. Denosumab has the support of six Phase III trials, so many observers had expected a fairly speedy approval process. In August, independent advisers to the FDA indeed recommended denosumab's approval for treating postmenopausal women with osteoporosis and men undergoing prostate-cancer therapy. However, the panel recommended against using denosumab as a preventive therapy for osteoporosis, or to treat bone loss in breast-cancer patients because it questioned the lack of long-term safety data for the drug and its impact on the immune system. Analysts now expect approval in mid- to late-2010, but some fear that separate letters for different applications would mean more delays for some applications, rather than the broad range of indications as hoped.

U.S. approval would get Amgen entry to the $8.4 billion market for osteoporosis drugs, according to Bloomberg. Denosumab is expected to quickly reach blockbuster status -- maybe even by its first full year of sales, likely 2011 -- and become Amgen's sixth drug to exceed $1 billion in annual sales. Once approved, denosumab will face other challenges, such as competing drugs with cheaper generic versions that may be required as the first line of treatment.

Amgen has partnered with with GlaxoSmithKline PLC (GSK) to sell denosumab to osteoporosis patients in Europe and other overseas markets.

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