) recently suffered a pipeline setback with the company deciding to
halt the development of its oncology candidate, ganitumab (AMG
479).The decision was based on the recommendation of an independent
Data Monitoring Committee (DMC).
The randomized, multicenter, double-blind, phase III study
(GAMMA) evaluated whether the combination of AMG479 and
) Gemzar improved overall survival in patients suffering from
metastatic adenocarcinoma of the pancreas versus placebo and
Gemzar, as a first-line therapy.
However, after conducting a pre-planned interim analysis of the
data, the DMC concluded that the combination of AMG479 and Gemzar
would not be likely to improve the survival in patients compared to
Gemzar plus placebo. However, the DMC's analysis of the data from
the phase III study did not raise any safety concern(s).
In addition to the GAMMA study, Amgen also decided to halt a
phase II study which was evaluating AMG479 in patients suffering
from locally advanced pancreatic cancer.
Though disappointed with the discontinuation of the phase III
study of AMG479 in the pancreatic cancer indication, we are
encouraged by the deep pipeline at Amgen, which represents
significant commercial potential. Moreover, Amgen's efforts to
expand the label(s) of its marketed products such as Prolia/Xgeva,
Sensipar, Vectibix and Aranesp also encourage us.
We are pleased with the strong performance of Amgen in the first
half of 2012. We believe that drugs such as Enbrel (arthritis
and psoriasis) should continue performing well in the coming
quarters. Management too raised its guidance for 2012, while
releasing the second quarter 2012 earnings results.
The company now expects earnings in the range of $6.20 - $6.35
per share on revenues of $16.9 - $17.2 billion. Earlier, Amgen had
guided toward earnings of $5.90 - $6.15 per share on revenues of
$16.1 - $16.5 billion. Earnings guidance reflects the up-front and
milestone payments received from Takeda,
) and Astellas Pharma in the first half of 2012.
We currently have a Neutral recommendation on Amgen. The stock
carries a Zacks #2 Rank (Buy rating) in the short run.
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