Amgen Inc. is sticking to what it knows as it finally moves some of its mid-stage pipeline into later stages. Two of its most promising pipeline candidates, AMG 827 and AMG 785, are intended to be follow-on products to two of Amgen’s biggest franchises: Enbrel (etanercept) and Prolia/Xgeva (denosumab).

The world’s largest biotech gave an in-depth overview of its pipeline on April 21, when it held its first business review meeting since 2008 (see chart).

Shareholders have grown frustrated with the company’s focus on its more mature marketed products, while it has left its pipeline to flounder. Now Amgen has been forced to turn its attention to bringing its mid-stage pipeline forward as revenues from its older franchises start to face erosion by generic competition. Yet the biotech isn’t moving far from its comfort zone, focusing on compounds that will be able to complement its already marketed products.

Over the next five years Amgen will report results for Phase III trials from five development programs.

Following A Blockbuster

The TNF inhibitor Enbrel has been one of the leading inflammatory disease treatments since its approval in 1998, with sales of about $3 billion annually. But the key Enbrel manufacturing patent expires in 2012, leaving the drug susceptible to generic competition (Also see "Market Snapshot: Anti-TNFs Grow Despite Tough Market" - Pink Sheet, 8 December, 2008.).

While Amgen has plenty of strategies to combat the loss of Enbrel revenues – including the strengthening of its intellectual property – one of its tactics is the development of AMG 827, an anti-interleukin-17 agent, for psoriasis.

AMG 827 is a fully human IgG2 antibody directed against a component of the IL-17 receptor, which also contributes to forming the receptor structure for IL-25. The compound blocks the activity of IL-17A, IL-17F and IL-25. Interfering with these pathways can block inflammation, Amgen believes.

“Because of our work with Enbrel and with a variety of other mechanisms, we have quite a lot of experience in psoriasis,” Amgen Exec VP-R&D Roger Perlmutter said at the recent business review meeting. “AMG 827 is unquestionably better than anything we've ever studied in terms of the speed of resolution of lesions as well as the complete nature of resolution. So the broad effect of this molecule is dramatic and was easily seen, even in our Phase I studies.”

Data from a Phase III psoriasis trial, which has not yet started, is expected to report out in 2013. Amgen is also studying the drug in Crohn’s disease. Leerink Swann analyst Joshua Schimmer estimates that the drug could have global peak sales above $500 million, even higher if AMG 827 is approved in more than just the psoriasis indication.

Building On A Young Franchise

Amgen spent 20% of its 2010 R&D investment on denosumab, a monoclonal antibody that targets the RANK ligand. The drug was launched in mid-2010 as Prolia for the treatment of postmenopausal osteoporosis and in late-2010 as Xgeva for the prevention of skeletal-related events in patients with bone metastases from solid tumors (Also see "Amgen Obtains Broader Label For Denosumab With Oncology Indication" - Pink Sheet, 22 November, 2010.). Additional indications are in the works, including treatment of bone metastases in breast cancer, as well as other cancers.

Sales of Prolia were $27 million in the first quarter, below Wall Street's estimate of $32 million. The shortfall marks the third consecutive disappointing quarter since Prolia's June launch. Xgeva, however, had sales of $42 million, well above analysts’ estimates of $23 million.

Despite the mixed start for the denosumab franchise, it is still expected to bring in peak revenues of $3 to $4 billion (which still is only a fraction of the $9 billion osteoporosis market). But while the aging Enbrel franchise had a broad range of indications, Prolia only targets a portion of the osteoporosis market.

AMG 785, also known as CDP7851, is being developed with Belgium-based pharmaceutical company UCB. The evening before Amgen’s business review meeting, UCB announced positive results from a Phase II study of AMG 785 in women with postmenopausal osteoporosis. While denosumab stops the excessive breakdown of bone, AMG 785, which blocks sclerostin, is designed to help build more dense bone material.

The Phase II study met its primary endpoint, showing increases in lumbar spine bone mineral density at 12 months for AMG 785 versus placebo. The drug was also compared to Eli Lilly & Co.’s Forteo (teriparatide) and Merck & Co.’s Fosamax (alendronate), and AMG 785 performed favorably in all comparisons. Injection site reactions were more frequent in patients taking the drug, but adverse events were generally the same in both groups.

The clinical trial included 400 postmenopausal women with low bone mineral density. Patients were either given a placebo or the drug at doses of 70, 140 and 210 mg subcutaneously once a month, and 140 and 210 mg every three months. Detailed results of the study will be presented at a future medical meeting.

Phase III study designs are under review and data is expected in 2015.

Filling Out Phase III

Aside from AMG 827 and AMG 785, Amgen expects at least three other Phase III programs to report data between now and 2015.

One of the other programs that the biotech highlighted during its business review was OncoVex, an oncolytic immunotherapy delivered by intratumoral injection that Amgen gained earlier this year through its acquisition of BioVex Group (Also see "Amgen Takes Out Cancer Vaccine Developer BioVex In Potential $1B Deal" - Pink Sheet, 24 January, 2011.).

OncoVex is an oncolytic virus technology engineered from the herpes simplex virus type 1. The oncolytic virus replicates only within tumor cells, producing cell lysis within tumors while leaving nearby healthy cells unharmed. The therapy is also intended to provoke an ongoing immune response that kills cancer cells elsewhere in the body.

A 50-patient Phase II study in melanoma was published previously by BioVex. And a Phase III study is under way with 430 patients, under a special protocol assessment with FDA. The company expects to complete enrollment this quarter.

The clinical trial is a two-to-one randomization to OncoVex plus GM-CSF versus subcutaneous administration of GM-CSF. The primary endpoint is six-month durable response rate with the understanding that it may take up to a year for individuals to show evidence of a response based on administration of the virus. Overall survival is a secondary endpoint.

Pruning The Pipeline

Investors can breathe a little easier now that some of the mid-stage pipeline has advanced, but plenty of Amgen’s programs are still years away from moving forward.

“The company has probably the deepest pipeline in biotech. It has about 12 products moving through Phase II trials and nine of which could provide Phase II data this year,” said Piper Jaffrey analyst Ian Somaiya.

Sanford Bernstein analyst Geoffrey Porges was also "pleased to see management halt investment in a number of programs that offer limited potential,” he wrote in a note.

During the business review meeting, Amgen highlighted six programs that it has halted because they lacked promise: AMG 102 for various cancers, AMG 221 for type 2 diabetes, AMG 827 for rheumatoid arthritis, AMG 853 for asthma, dulanermin for various cancers, and Nplate for myelodysplastic syndromes.

“[CEO] Kevin Sharer mentioned that it's important to stop these programs when it's obvious that they're not going to succeed. I would submit to you that it's important to stop these programs even before it's obvious that they're not going to succeed,” added Perlmutter. “We make our decisions based on an understanding of the extent to which the clinical profile reflects what we saw pre-clinically. We're not always going to be right.”

Holding the business review, presenting the pipeline and pointing out the critical eye the firm is taking towards advancing projects are all part of Amgen's efforts to burnish its R&D credibility. But the true test will come as the programs report out in the coming years and show whether Amgen will avoid the late-stage failures that have plagued other biopharmas trying to supplant their maturing products.

By Lisa LaMotta

Amgen Shifts Its Focus From Products To Pipeline, But Stays In Comfort Zone

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