Amgen’s Phosphate Binder Loss May Be Genzyme’s Gain
This article was originally published in The Pink Sheet Daily
Executive Summary
Once expected to plunder Renagel market share, AMG 223 suddenly gets left on the shelf.
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Amgen appears to be shelving 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 back in 2007 (1 (Also see "Amgen, Ilypsa Spin Out Relypsa To Further Cardiovascular, Renal Pipeline" - Pink Sheet, 30 Oct, 2007.)). Amgen subsequently spun off the remaining products in the Ilypsa portfolio into a new company called Relypsa that garnered $33 million in funding from a group of venture backers led by 5AM Ventures and New Leaf Venture Partners. As part of the deal, Relypsa took a high-throughput polymer drug discovery platform and potassium binder ILY-105 for hyperkalemia, among other programs. Amgen took a minority equity stake in the company (2 (Also see "Amgen, Ilypsa Spin Out Relypsa To Further Cardiovascular, Renal Pipeline" - Pink Sheet, 30 Oct, 2007.)). AMG 223 was poised to compete with Genzyme's leading U.S. phosphate binder sevelamer ( Renagel/Renvela ). But during a Jan. 26 earnings call, the Thousand Oaks, Calif.-based biotech suggested that while results from a Phase II dose ranging study were good enough to support approval, they were unlikely to prove superior to available treatments. "We have decided to look at a range of options for the development of this molecule rather than pursuing it by ourselves," said Roger Perlmutter, executive vice president of research and development during a pipeline update. 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 Mar, 2007.)). During a question and answer session in the Amgen earnings call, which was dominated mainly by updates on osteoporosis drug denosumab and anemia therapy Aranesp, Perlmutter explained: "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," he said. Dosing profile may have fallen short 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," Raymond wrote. "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. Similarly, 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 deemphasize development, Abrahams wrote. "We no longer consider it [AMG 223] a potential threat to Renagel/Renvela," he wrote. Abrahams added that while the news is positive for Genzyme, that 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 Feb, 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 ahead with development. The AMG 223 news is unlikely to faze Wall Street, which is mainly concerned about the future of recently-filed anti-bone loss therapy denosumab, James added (5 (Also see "Amgen Submits Denosumab BLA Ahead Of Expectations" - Pink Sheet, 19 Dec, 2008.)). The loss does perhaps put more pressure on Amgen to deliver with denosumab. Raymond noted that release of denosumab breast cancer SRE Phase III data are likely delayed, as management noted in the earnings call that data adjudication for this trial is still ongoing. "While we are not alarmed by this timeline, we think some investors had anticipated Q1 '09 data," he wrote. - Emily Hayes ([email protected]) |