Amgen is shelving its own development of the phosphate binder AMG 223 for treatment of hyperphosphatemia in chronic kidney disease, after Phase II results disappointed.

The oral compound, which prevents the absorption of ingested phosphate, was the main asset acquired via a purchase of Santa Clara, Calif.-based Ilypsa for $420 million not too long ago (¹ Also see "Amgen, Ilypsa Spin Out Relypsa To Further Cardiovascular, Renal Pipeline" - Pink Sheet, 30 October, 2007.). Amgen spun its Ilypsa subsidiary off into a company called Relypsa soon afterward (² Also see "Amgen, Ilypsa Spin Out Relypsa To Further Cardiovascular, Renal Pipeline" - Pink Sheet, 30 October, 2007.).

AMG 223 was poised to compete with Genzyme's leading U.S. phosphate binder sevelamer ( Renagel/Renvela ).

During a Jan. 26 earnings call, Amgen suggested that results from a Phase II dose ranging study were good enough to support approval, but were unlikely to prove superior to available treatments.

"We want to introduce drugs that are truly superior, and 223 certainly looks like it has the properties necessary to permit registration as a phosphate binder, but it didn't meet our current criteria in light of our other portfolio opportunities," said Exec VP-R&D Roger Perlmutter.

"We have decided to look at a range of options for the development of this molecule rather than pursuing it by ourselves," Perlmutter said on the call. Amgen later declined to provide further comment on its plans.

At the time of the Ilypsa purchase in 2007, analysts expected the compound could take a significant share of the $1.5 billion phosphate binder market. Partner Astellas, which holds rights in Japan, described it as a second-generation Renagel - able to absorb phosphate far more efficiently, improving compliance and safety (³ Also see "Astellas VP-Business Development Masaki Doi: An Interview With “The Pink Sheet” DAILY (Part 2 0f 2)" - Pink Sheet, 12 March, 2007.).

Robert W. Baird & Co. analyst Christopher Raymond described Amgen's 223 announcement as "disconcerting" in a Jan. 27 note. "Amgen paid $420 million for this agent (through the Ilypsa acquisition) just 18 months ago as a potentially best-in class phosphate binder," he noted. "While management was opaque as to what specifically was deemed unsatisfactory about this agent, we suspect it did not live up to its promise of a better dosing profile."

The downside of Renagel is that patients have to take nine pills a day, whereas AMG 223 had promised results with only one pill per meal.

In a Jan. 27 note on Genzyme, Oppenheimer analyst Brian Abrahams observed that study results suggest the pill burden for AMG 223 would not have improved upon Renagel or its successor Renvela.

Considering the patent expiry of Renagel/Renvela in 2013 and likely introduction of generics in 2014, it makes sense for Amgen to de-emphasize development, Abrahams concluded.

Abrahams added that while the news is positive for Genzyme, the firm's upcoming next-generation phosphate binder is "critical for long-term protection of the renal franchise" (⁴ Also see "Genzyme: Next-Generation Sevelamer Bound For Clinic Next Year" - Pink Sheet, 13 February, 2008.). Genzyme has indicated it will soon start a Phase II/III study of this compound in dialysis patients.

Genzyme Investors Breathe Sigh Of Relief

Amgen's purchase of Ilypsa had caused Genzyme "a lot of angst," Raymond recalled in an interview. At the time, the drug was expected to enter Phase III right away and the purchase price suggested high value. Instead of proceeding to Phase III, Amgen appears to have taken a more cautious path by performing a Phase II dose ranging study.

Considering the expected entry of Renagel generics and the apparent failure to show superiority, AMG 223 value has diminished, analysts say. "It's hard to see what kind of price they would get when the evidence shows it does not offer an advantage," Raymond said. Rodman & Renshaw analyst Christopher James agreed that finding a buyer could prove challenging. However, he said, it seems likely that partner Astellas will proceed with development.

- Emily Hayes (e.hayes@elsevier.com)

Amgen's Phosphate Binder Loss May Be Genzyme's Gain

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