Amgen Closer to Prolia Approval - Analyst Blog

In a major breakthrough, Amgen (AMGN) received good news with respect to its much awaited drug Prolia (denosumab). Amgen received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) for Prolia, for the treatment of osteoporosis in postmenopausal women and bone loss associated with hormone ablation in men with prostate cancer, both of whom are at increased risk of fractures.

The positive opinion is based on data from six phase-III trials. It was observed that Prolia administered as a subcutaneous injection twice yearly (60mg) reduced the incidence of fractures. In addition, we are pleased to see that in all the six studies Prolia's was found to increase bone mineral density at all skeletal sites measured.

We believe Prolia represents the future of Amgen. Based on encouraging phase-III results, we believe the candidate has the potential to capture a major share of the osteoporosis market once launched. This market represents huge commercial potential with global sales of osteoporosis medications coming in at about $8.4 billion in 2008. The clinical results on denosumab so far are positive for the company, and reinforce our belief that the drug could be a blockbuster.

In July 2009, Amgen entered into collaboration with GlaxoSmithKline (GSK) whereby, both the companies will share commercialization of denosumab for osteoporosis indications in Europe, Australia, New Zealand and Mexico. Glaxo will be responsible for commercializing denosumab for all indications in countries like China, India, Brazil and Taiwan where Amgen does not have a commercial presence. Glaxo’s strong marketing presence in these areas and expertise in primary care markets should help denosumab capture significant share once launched.

Prolia has yet to receive marketing approval in the U.S. The drug received a complete response letter from the US Food and Drug Administration (FDA). While no new studies have been requested for the treatment of the postmenopausal osteoporosis (PMO) indication, additional studies will be needed for the prevention of PMO.

With all Amgen’s key products slated to lose patent protection in the next few years, the company has a lot riding on the timely approval of Prolia. We have a Neutral recommendation on the stock.
Read the full analyst report on "AMGN"
Read the full analyst report on "GSK"
Zacks Investment Research