Amgen's Denosumab Turned Down Again, but It May Not Be as Bad as It Seems

When it rains at Amgen, it pours.

Just a few days ago, the FDA rejected two of six approval applications for bone loss drug denosumab (a.k.a. Prolia). The agency said it wants a new clinical trial for the prevention of post menopausal osteoporosis, and it wants more information (but thankfully not a time-consuming new trial) on denosumab's ability to treat the same condition.

Now, buried 24 paragraphs into Amgen's third quarter earnings release, comes the news that the FDA rejected the remaining four denosumab applications: treatment and prevention of bone loss associated with breast cancer hormone therapy and with prostate cancer hormone therapy. The agency wants new clinical trials across the board to make sure denosumab isn't making the cancers worse.

To top it off, Amgen also revealed that additional analyses from a failed Phase III trial of Aranesp (darbepoetin alpha) showed the drug not only lacked efficacy â€" it was associated with a higher risk of cancer and stroke.

But the black cloud hanging over Amgen may be short-lived.

For starters, the stroke and cancer issues with Aranesp aren't all that surprising, given the drug's label, and most analysts predict they won't affect sales (which are on the decline anyway thanks to a maelstrom of labeling and reimbursement issues over the past few years).

As for denosumab, Deutsche Bank analyst Mark Schoenebaum says the postmenopausal osteoporosis treatment market, where denosumab is closest to approval, is worth three times more than all the rest combined. And the biggest opportunity is yet to come, if the drug gains approvals for the reduction of fracture risk in various cancers and for the prevention of bone metastases.

And even as the clouds hovered over the drugs of Amgen's past and future, there was a bright spot for the present: aside from Aranesp, the rest of Amgen's portfolio posted modest sales increases in Q3 versus Q2. Those sales, combined with lower spending, led to earnings that beat analyst expectations for the quarter.