Amgen: Today’s Review Critical For Anemia Reimbursements (AMGN)

Amgen (NASDAQ:AMGN) has a huge day ahead of it.  The biotech giant is presenting data today on the appropriateuse of Erythropoiesis Stimulating Agents in Chronic RenalFailure patients to a joint meeting of U.S. Food and DrugAdministration advisory committees.  We noted just last week how this chance of increased reimbursement rates could create a major catalyst for the shares.  We even compared the similarities in the scope for shareholders to the past blow-up and recovery witnesses at Biogen-Idec (NASDAQ:BIIB), although the actual events were different circumstances.

The company is presenting data that shows these are safe when used appropriately and will explain the critical roles these agents play in managing anemia in CRF patients.  It will also review some of the potential risks in recent trials.  Amgen will also lay out the need for an appropriate hemoglobin level and will show the importance of an ongoing trial to redeuce cardiovascular events.  The company alsoidentifies areas for future study and will present data that suggests patient response is a stronger risk factor for poor outcomes than ESAdose.

Some analyses have shown that higher ESA doses are associated withpoor outcomes. But Amgen noted that it is difficult to determineif higher doses cause worse outcomes, or if higher doses are observedin patients who are poor responders because of worse health status.  The company is also saying that certain ‘hyporesponders’ that have poor response have a greater burden of illness and a greater risk or mortality and a patient’s underlying health may be a better predictor than use of these drugs alone. The FDA already has a black box safety warning on all ESA labels as of now.  It will also address its TREAT trial that will investigate survival advantages in a 4,000 patient study  to determine the impact of anemia therapy on mortality andcardiovascular morbidity in patients with CKD and type 2 diabetes.

As far how idely these have been used, this is the top-reimbursed area in drugs from Medicare and Amgen claims over 2.2 million Chronic RenalFailure patients have used its Aranesp or EPOGEN.  A vote is not likely until much later in the day and the outcome is still not at all certain.

Jon C. Ogg
September 11, 2007

Jon Ogg produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER; he does not own securities in the companies he covers.