EU Approval for Amgen's Prolia - Analyst Blog

Amgen Inc. (AMGN) received a boost with the EU approval of its lead pipeline candidate, Prolia (denosumab). The European Commission granted approval for the use of Prolia in the treatment of osteoporosis in postmenopausal women at increased risk of fractures, and the treatment of bone loss associated with hormone ablation in men with prostate cancer at increased risk of fractures.

The approval was expected as Prolia had received a favorable recommendation from the European Medicines Agency’s (EMEA) Committee for Medicinal Products for Human Use (CHMP) in December 2009. In addition to the EU, Prolia gained approval in Norway, Iceland and Liechtenstein.

Prolia’s approval is a major positive for Amgen. Based on encouraging phase III results, we believe the product has the potential to capture a major share of the osteoporosis market once launched. The osteoporosis market represents huge commercial potential. It is estimated that about 30% of all post-menopausal women in Europe suffer from osteoporosis.

Amgen has a collaboration agreement with GlaxoSmithKline (GSK) for Prolia for the postmenopausal osteoporosis indication in Europe, Australia, New Zealand and Mexico. Glaxo will be responsible for commercializing the product for all indications in countries like China, India, Brazil and South Korea, where Amgen does not have a commercial presence. Glaxo’s strong marketing presence in these areas and expertise in primary care markets should help Prolia capture significant share once launched.

Prolia has yet to gain approval in the US. The company failed to receive first round approval for the product from the US Food and Drug Administration (FDA) and a final decision on the approvability of the product for the treatment of postmenopausal osteoarthritis should be out by July 25, 2010 in the U.S.

We currently have a Neutral recommendation on Amgen. With all the key products expected to lose patent protection in the next few years, Prolia’s EU approval is an important event for the company. We expect investor focus to remain on the approvability of the product in the U.S.
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