Amgen (AMGN) recently received US Food and Drug Administration (FDA) approval for two new indications of Prolia (denosumab).
In addition to approving Prolia as a treatment for increasing bone mass in women at high risk for fracture receiving adjuvant aromatase inhibitor therapy for breast cancer, the FDA approved Prolia as a treatment for increasing bone mass in men at high risk for fracture receiving androgen deprivation therapy for non-metastatic prostate cancer. The approvals were based on data from two phase III studies.
Prolia/Xgeva Could be a Blockbuster
Prolia is a key product in Amgen’s portfolio. Amgen received a major boost in 2010 when it gained approval for Prolia/Xgeva (denosumab). While Prolia gained approval in the EU for 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 FDA approved the product for the treatment of osteoporosis in postmenopausal women at increased risk of fractures or patients who have failed or are intolerant to other osteoporosis treatments.
Based on encouraging phase III results, we believe Prolia has the potential to capture a major share of the osteoporosis market, which represents a huge commercial opportunity.
Denosumab is also marketed under the trade name Xgeva. Xgeva is approved in the US (November 2010) and European Union (July 2011) for the prevention of skeletal-related events (SRE) in patients with bone metastases from solid tumors.
The clinical results on Prolia/Xgeva so far are positive for the company, and reinforce our belief that the drug could be a blockbuster.
Amgen has a collaboration agreement with GlaxoSmithKline (GSK) whereby both companies will share commercialization of Prolia for osteoporosis indications in Europe, Australia, New Zealand and Mexico. Glaxo also has the right to commercialize denosumab for all indications in countries, excluding Japan, where Amgen does not have a commercial presence, including countries like China, Brazil, India, Taiwan and South Korea.
Neutral on Amgen
We currently have a Neutral recommendation on Amgen, which is supported by a Zacks #3 Rank (short-term “Hold” rating). Amgen has a lot riding on the successful commercialization of Prolia/ Xgeva.
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