In a latest development, the U.S. Medicare agency will seek an advisory panel’s recommendation regarding the use of anemia drugs developed by Amgen (AMGN) as well as Johnson & Johnson (JNJ), in patients with chronic kidney diseases. The advisory committee is likely to review the use of erythropoiesis-stimulating agents (ESAs) for anemia in patients with chronic kidney disease at a meeting to be held on March 24, 2010.
While, Johnson & Johnson has one ESA, Procrit, Amgen has two ESAs in its product portfolio, Aranesp and Epogen. Further review of these drugs became necessary as recent studies conducted over the past few years have shown that high doses could lead to heart complications or death in some cases. Accordingly, the FDA ordered strong warnings to be added to the labels.

During the second quarter, Amgen’s ESA franchise contributed 36% to total revenues. Aranesp sales declined 16% to $693 million (U.S. – $338 million, down 21%; ex-U.S. – $355 million, down 11%), mainly due to a decline in demand reflecting the negative impact primarily in the supportive cancer care setting. Aranesp also lost some share in both the U.S. and ex-U.S. markets. International sales were also impacted by foreign exchange fluctuations. Epogen sales increased 3% to $638 million reflecting an increase in demand, which was supported by patient growth and an increase in average net sales price.

Johnson & Johnson’s ESA franchise recorded a 12% decline in sales during the second quarter of 2009 primarily due to the declining markets for ESAs in the U.S.  Although sales from Aranesp and Epogen are quite crucial for Amgen, Johnson & Johnson is less dependent on contribution from Procrit, which contributed about 10% and 2% to pharmaceutical business revenue and total revenues respectively during the second quarter.
The inclusion of a safety-related boxed warning on the labels of Amgen’s Aranesp and Epogen and Johnson & Johnson’s Procrit had an adverse impact on the sales of these products. We believe the environment will remain challenging for them especially Aranesp, which is witnessing declining sales in both the supportive cancer care and nephrology settings for which it is approved. Amgen has also submitted a Risk Evaluation and Mitigation Strategy (REMS) with the U.S. Food and Drug Administration (FDA). The approval of this plan, potentially later this year, could limit Aranesp sales further.

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