Monday, April 28, 2008

Amgen oncology franchise in free-fall?

Amgen announced their 1st quarter performance last week, and the results aren't pretty.

Sales of their growth factor franchise are suffering as Aranesp and Epogen revenues continue to decline since the FDA reviewed the risks associated with such therapies in March 2007.

There was a sequential (4Q07 to 1Q08) drop of $66 million and $84 million respectively. The FDA has yet to announce its new guidelines (read restrictions) on the use of the drugs on certain cancer patients who get fatigued from chemo, which could put even more pressure on sales. This is not good news for the already disgruntled shareholders.

The company is currently going through a major cost cutting and restructuring program. New product launches are needed to boost confidence and enthusiasm. The next likely candidate for approval, denosumab (D-Mab) for fracture data in postmenopausal osteoporosis, may contribute to the bottom line but whether it has the potential for blockbuster status remains to be seen.

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