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AMGEN EPOGEN LAUNCH: 25% OF DIALYSIS PATIENTS ON EPO

Executive Summary

AMGEN EPOGEN LAUNCH: 25% OF DIALYSIS PATIENTS ON EPO after four months on the market, Amgen CEO Gordon Binder reported at the Pru-Bache Capital Funding annual healthcare conference Oct. 11. Among the 75% of dialysis patients eligible under HCFA standards "we are treating today just under a third," Binder said, adding that "if you think about a four month marketing effort, 25 out of 75, or one-third of eligible patients under treatment, that's a very successful launch." With a total dialysis population of 110,000 and an average yearly patient treatment cost with $5,600, Epogen sales could total $51.3 mil for the first four months since the drug's approval in June, and $77 mil. by the end of the year. "Amgen sales are in the range of expectation," Binder told the group. Amgen reports product sales of $32 mil. for the three months ended Sept. 30. While that total includes products other than Epogen, the vast majority can probably be attributed to EPO; the firm reported product sales of $673,000 for the comparable quarter last year. In an Oct. 20 release announcing results, Amgen noted that "over 95% of dialysis centers have purchased Epogen since its June licensing." Discussing physicians' reaction to Epogen, Binder said: "We had expected that like a normal drug introduction, doctors would treat their sickest patients first. However, "because reimbursement is $40 [regardless of dose], it's essential that they average out the very sick patients against the patients that are not so needy, because otherwise the average dose of EPO is too high and they [would] lose money." As a result, a wider range of patients is being put on EPO faster, Binder explained, with the lower dose, moderately sick patients balancing out the sicker, high dose patients. Most patients receiving Epogen "are still in the rising phase" of dosing and "not at the maintenance level [yet]," Binder remarked. Consequently, "most dialysis centers really do not know what the impact of this on their profit will be," Binder observed. He also noted that the $40 per administration HCFA reimbursement level will face review sometime in December ("The Pink Sheet" July 3, T&G-3). The largest U.S. provider of dialysis services, National Medical Care, estimates its annual cost for EPO to be $80 mil. "We hope to break even, but you will see a revenue jump without a concomitant rise" in earnings because of the reimbursement levels, NMC Chairman Constantine Hampers, MD, said at the Pru-Bache conference. Commenting on the number of patients who will receive EPO, Hampers said: "We have budgeted for 68% [of all dialysis patients], but that may be low." The success of Amgen's Epogen launch is dimmed somewhat by the pending patent litigation. A decision in the Massachussetts federal court patent infringement case between Amgen and Genetics Institute is scheduled to be issued on or before Dec. 13, the "drop dead date." Final oral arguments are scheduled for Nov. 9. Genetics Institute says it "continues to hope for late 1989, or early 1990 approvals in the U.S., Japan and Europe" for its EPO, Marogen. The company's chief financial officer Garen Bohling said, "we believe that [marketing parenters] Upjohn and Boehringer Mannheim will get us very substantial market share." Chugai-Upjohn filed its PLA for anemia in dialysis patients in September 1988 and has supplemented that application with data on predialysis patients.

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