Widespread outrage over proposed reimbursement changes for anemia drugs in oncology pushed the Centers for Medicare & Medicaid Services to a less severe final decision, but some onlookers proved more sanguine than others about the future of Amgen Inc.'s franchise - and would-be competitors continued to line up.
The company's stock (NASDAQ:AMGN) closed Tuesday at $53.74, down $2.45.
Thousand Oaks, Calif.-based Amgen sells the erythropoietin stimulating agents (ESAs) Aranesp (darbepoetin alfa) and Epogen (epoetin alfa) for use in kidney disease and cancer. The two drugs accounted for almost half of Amgen's revenue last year.
CMS originally proposed that the use of ESAs in cancer patients should not start until hemoglobin levels reached 9 g/dL, and the length of treatment should go no longer than 12 weeks, with myelodysplastic syndromes (MDS) patients excluded altogether. (See BioWorld Today, July 24, 2007.)
But, as many expected, CMS backed off the 9 g/dL, adjusting the trigger to 10 g/dL, and allowed for longer total ESA treatment duration - as long as eight weeks after the final dose of chemotherapy (rather than 12 weeks total for the year).
In MDS, where public opinion was especially strong, the federal agency opted to make no decision, noting that MDS is pre-malignant and therefore does not fall within CMS' review - though the agency called the clinical evidence for the worth of ESAs in MDS less than robust.
The lack of action means local Medicare contractors can make their own decisions about whether to cover ESAs for MDS patients, a situation that Bret Holley, analyst with CIBC World Markets, signifies "an important win" for Amgen.
Also, under the final decision, ESAs are covered when used in combination Avastin (bevacizumab, Genentech Inc.) or Erbitux (cetuximab, ImClone Systems Inc.).
Joel Sendek, analyst with Lazard Capital Markets, was less thrilled than Holley. Though not as tight as originally proposed, the final coverage rules are "dramatically restrictive to future use of ESAs in oncology," Sendek wrote in a research report.
The 10 g/dL trigger level for coverage is not good enough, in Sendek's view. "We believe only 60 percent to 70 percent of Aranesp use in oncology is in patients with hemoglobin less than 10g/dL, meaning 30 percent to 40 percent of Aranesp sales in oncology are at risk," he wrote.
Sendek's thesis is borne out by Amgen's electronically collected medical records from 2005 to 2006, which showed 98 percent of ESA use in chemo-induced anemia started in patients with hemoglobin below 12 g/dL, and 84 percent in patients with levels below 11 g/dL. The company did not break the numbers down, but said the "vast majority" of patients are started at levels below 10 g/dL.
Christopher Raymond, analyst with Robert Baird & Co., had yet another slant on the CMS news. He pointed to previously published data showing that about half of ESA oncology patients start treatment at hemoglobin levels greater than 10 g/dL. Although those statistics were gathered before safety concerns about ESAs arose, Raymond said most oncologists have stayed with the policy.
What's more, Raymond wrote in his report on the CMS edict, industry sources contacted by Baird in the wake of the decision cited "an unnaturally narrow [hemoglobin] target range with too-specific triggers for ESA-dose increases, decreases and discontinuations, making adherence very difficult," which could make doctors "skittish relative to ESA use."
Studies have uncovered risks with ESAs that include thrombosis, cardiovascular events, tumor progression and reduced survival. Earlier this year, an FDA advisory committee recommended curbing their use, as Congress continued its probe into the products. (See BioWorld Today, May 16, 2007.)
Next month, the FDA's Cardiovascular and Renal Drugs Advisory Committee will discuss the use of ESAs in kidney disease, and the FDA's final label revision for the drugs when used in oncology is expected in the second half of this year.
ESA sales in 2006 totaled $10 billion, in a market where Amgen's Aranesp has pretty much beaten its only competitor, Johnson & Johnson's Procrit (epoetin alfa). On the horizon, though, are such threats as Basel, Switzerland-based F. Hoffmann-La Roche's continuous erythropoiesis receptor activator (CERA, branded Mircera).
In May, the FDA issued Roche an approvable letter for the drug, with approval expected this year. Court action in a patent infringement case involving Roche is slated for next month.
Palo Alto, Calif.-based Affymax Inc. is starting a Phase III program with Hematide in chronic renal failure patients, testing the compound's safety and efficacy in comparison to Amgen's products. Hematide is a pegylated peptide that binds to and activates the erythropoietin receptor. (See BioWorld Today, July 17, 2007.)
Biopure Corp., of Cambridge, Mass., has Hemopure, a purified hemoglobin for which Stephen Dunn, analyst with Dawson James, sees possibilities - especially if, as Dunn believes, it's the growth-factor component of ESAs that is to blame for safety problems with the compounds. Hemopure already is approved for anemic patients in South Africa, and under "compassionate use" provisions for those with life-threatening anemia in the U.S.
Affymax's shares (NASDAQ:AFFY) closed Tuesday at $23.87, down 81 cents. Biopure's stock (NASDAQ:BPUR) ended the day at 92 cents, down 2 cents.