Biotechnology giant Amgen, Inc. (NASDAQ:AMGN) has released positive data for its phase II study showing the efficacy and safety of its pipeline osteoporosis drug romosozumab. At an Endocrine Society meeting, Amgen reported that 19 patients showed significant increases in bone mineral density (BMD) following a second course of romosozumab.
According to top Oppenheimer analyst Leah R. Cann, romosozumab could make $90 million in sales in 2020 while the entire osteoporosis franchise, including postmenopausal osteoporosis treatment Prolis, could account for as much as 10.5%, or $2.7 billion, of Amgen’s product sales by 2020.
Cann believes that while romosozumab is the smallest of Amgen’s three late stage clinical products, it is nonetheless an “an important component of Amgen’s future osteoporosis franchise.” Upcoming patent expiry dates means that patents protecting Prolia will expire between 2017 and 2025, but the patents protecting romosozumab will only expire between 2026 and 2029. Cann is now anticipating a decision by the US Food and Drug Administration (FDA) regarding romosozumab’s approval in early third-quarter 2017.
Specifically, the data showed that the second course of treatment led to increases in BMD to an extent similar to the initial romosozumab treatment with increases of: lumbar spine (12.7%), total hip (5.8%), and femoral neck (6.3%) during months 36 to 48. Patients who received a second course of romosozumab after denosumab, saw a further increase in BMD by 2.8% at the lumbar spine, while maintaining BMD at the total hip and femoral neck. A similar adverse event (AE) profile was observed in all the romosozumab groups.
The results from the phase II study, which is now in its fourth year, come at a welcome time for Amgen following lackluster results for its key cholesterol-lowering drug Repatha back in March. Analysts questioned whether insurers would be willing to pay out $14,000/year for a 20% reduced risk of a cardiovascular event, especially when it comes to lower-risk patients. Investors had been hoping for a reduction of closer to 30% and a reduction in overall mortality. Share prices dropped 7% on the news from $180 down to $168.
However, if we look at this in context, AMGN has still come a long way from its $150 share price at the start of 2017. And the Repatha data did not deter Cann from sticking to his bull picture. He reiterated his Buy rating for AMGN with a $189 price target (15.2% upside) on April 2. Leah R Cann has an impressive track record according to financial accountability engine TipRanks which ranks him at #992 out of #4,562 analysts. The four-star analyst has a success rate of 79% and an average return per recommendation of 12.2%.
TipRanks also reveals that the market as a whole is confident on Amgen’s outlook with an analyst consensus rating of Strong Buy. Following the recent dip in share prices, the average 12-month analyst price target of $194 represents a considerable 18.24% upside from the current share price of $164.