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Posted by: Arlene Weintraub on October 19
Drug company executives—and their investors—used to dread the prospect of the U.S. Food & Drug Administration delaying approval of a new product. Nowadays, however, such delays seem par for the course. Take, for example, the news on Oct. 19 that biotech giant Amgen received a “complete response” letter on its experimental osteoporosis drug, Prolia (scientific name: denosumab). Amgen will have to provide more information about the drug before the agency will approve it. Investors had been expecting Prolia to be a long-awaited blockbuster for Amgen, and they pushed the company’s stock up 30% over the summer to just north of $60. News of the delay was barely a blip: shares traded down just a percent or two the morning of Oct. 19.
Amgen applied for approval for Prolia in treating and preventing post-menopausal osteoporosis (PMO), as well as bone loss in some cancer patients. In August, an advisory panel to the FDA expressed some concerns about side effects seen in the trials, such as serious infections or cancers. The agency has not yet responded to Amgen’s application for Prolia to be approved for cancer-related bone loss, but it did tell the company that it would need to do more studies to justify marketing the drug to prevent PMO. In terms of using it in patients who already have PMO, the agency merely requires more information, including some clarification on how Amgen plans to monitor patients after the drug is approved.
Amgen executives aren’t providing details about how they plan to respond, except to say that they’ll be able to provide the information on Prolia for PMO treatment quickly. “Amgen is fully committed to working with the FDA to make Prolia available to patients in the near future,” said Roger M. Perlmutter, executive v.p. of R&D in a statement. The prospects for the other indications are up in the air, though Amgen is prepared to launch the drug as soon as it has a green light.
One reason Amgen’s news is being treated more as a disappointment than a disaster may be that complete response letters have become somewhat routine in pharma. The FDA has stepped up its focus on safety, and its efforts to better understand side effects often cause it to miss its own deadlines for approving drugs.
And the FDA isn’t just picking on Amgen. In the last few months, the FDA has fired off a slew of complete response letters to Johnson & Johnson—most of them asking for more information about side effects. CEO William Weldon says the industry needs to be prepared for more such scrutiny. “I do think more and more we’re going to see complete response letters rather than a decision made at the [expected] dates,” Weldon said in a September interview with BusinessWeek. “There’s a need for industry to understand what is required by the FDA, and then make sure we’re doing the scientific work, the clinical trials, and everything else that’s going to answer the questions. As we all understand more and more what’s needed, the scientific rigor will get even better. So hopefully we’ll be able to meet the dates and get the approvals.”
As for Amgen, analysts expect the delay to have a modest dampening effect on revenues next year. Christopher Raymond, an analyst for Robert W. Baird & Co., lowered his 2010 sales estimate for Prolia from $375 million to $295 million. He didn’t change his “outperform” rating, nor did he lower his price target of $70 a share. In an October 19th report, he wrote, “we think PMO treatment issues are primarily procedural,” and “we still anticipate a YE09 approval.” Now the onus is on Amgen to prove he’s right.
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