Amgen Reports Positive Data From Study For Osteoporosis Treatment Denosumab - Update

(RTTNews) - Friday, Amgen Inc. (AMGN | Quote | Chart | News | PowerRating), the biggest biotechnology company in the world, revealed positive findings from a pivotal fracture trial evaluating its RANK Ligand inhibitor, denosumab, for treating postmenopausal osteoporosis. Following the news, the Thousand Oaks, California-based company's stock surged over 14% in the extended session.

Osteoporosis, often referred to as the "silent epidemic," is a disease of bone that leads to an increased risk of fracture, especially in women following menopause. The economic burden of osteoporosis is comparable to that of other major chronic diseases like cardiovascular disease or asthma.

In the pivotal, three-year, international, Phase 3 study of about 7,800 women with osteoporosis, patients were randomized to receive denosumab, by subcutaneous injection once every six months, or placebo injections.

For the primary endpoint, treatment with denosumab resulted in a statistically significant reduction in the incidence of new vertebral fractures compared with placebo treatment. Women receiving denosumab also experienced a statistically significant reduction in the incidence of new non-vertebral and hip fractures compared with those receiving placebo.

The incidence and types of adverse and serious adverse events observed in the study were similar between both groups. The most common adverse events across both treatment arms were arthralgia, back pain, hypertension and nasopharyngitis.

According to Roger Perlmutter, Executive Vice President of Research and Development at Amgen, "This long-awaited study demonstrated that denosumab treatment both increased bone mass and reduced the risk of skeletal fractures in women with postmenopausal osteoporosis. We are encouraged by the magnitude and consistency of the treatment effect and pleased with the safety results."

Denosumab is being viewed as a potential revenue spinner for Amgen, which is being hurt by lower sales for its blockbuster anemia drugs Epogen and Aranesp due to health concerns. The two drugs, used for chemotherapy induced anemia, reportedly accelerated the growth of certain tumors.

A study showed in April that denosumab increased bone density in early-stage as well as late-stage postmenopausal women. Amgen said in May that denosumab achieved greater bone mineral density than Merck & Co Inc.'s (MRK | Quote | Chart | News | PowerRating) oral drug Fosamax, with similar side effects.

In June, Deutsche Bank initiated coverage of Amgen stock with a "Buy" rating and a price target of $52. Analyst Mark Schoenebaum said he thinks Amgen's base anemia business has not yet hit bottom, yet believes the risk/reward of denosumab data is appealing.

Schoenebaum feels the Street is almost universally bearish on denosumab, with most observers being concerned about its safety profile and/or its commercial prospects. The analyst believes this bearishness helped create a unique risk/reward equation ahead of data this fall.

The analyst believes that the denosumab bull thesis will likely take time to play out. If the drug candidate fails in clinical trials, the analyst believes Amgen could be acquired. The biotechnology giant is expected to announce second quarter results on July 28. The Street expects earnings of $1.02 per share on revenues of $3.58 billion.

AMGN closed Friday's regular trade at $61.20, up 8 cents from the previous close, on 8.39 million shares. The stock added 14.02% to trade at $61.48 in the extended session. For the past year, the stock trended in the range of $39.16-$59.08.

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