FDA Panel to Review Denosumab

The U.S. Food and Drug Administration’s (FDA) Advisory Committee for Reproductive Health Drugs will be reviewing Amgen’s (AMGN) key pipeline candidate, denosumab (proposed trade name: Prolia) on August 13, 2009.

Amgen is seeking approval for denosumab for the treatment and prevention of postmenopausal osteoporosis and bone loss in patients undergoing hormone ablation for either prostate or breast cancer. The committee will review and discuss the safety, efficacy, and overall risk/benefit profile of denosumab.

While the company has presented encouraging phase III results on denosumab demonstrating the candidate’s superiority over Novartis’ (NVS) Zometa in the treatment of bone metastases in patients with advanced breast cancer, we think there could be a delay in approval of the candidate based on the FDA’s concerns regarding the safety profile of the drug.

The FDA is concerned that patients using denosumab are more likely to develop skin, ear and urinary tract infections compared to patients on placebo. The agency is also concerned about an increase in the risk of cancer associated with the use of the drug. These issues will be discussed by the Advisory Committee.

While the agency is not required to follow the committee’s recommendation, it usually does. A final decision on denosumab is expected in October 2009.

Denosumab represents significant commercial opportunity for Amgen – the product has the potential to become a leading treatment for osteoporosis and could achieve multi-billion dollar blockbuster status once launched. Denosumab’s main competitors would include GlaxoSmithKline’s (GSK) Boniva, Novartis’ Zometa and Merck’s (MRK) Fosamax among others.

With all its key products slated to lose patent protection in the next few years, Amgen has a lot riding on the timely approval of denosumab. We are bullish on denosumab, but any hiccup, either with respect to a delay at the FDA, a miss in any of the other ongoing clinical programs, or safety concerns post-launch, will weigh heavily on the shares.
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