Sales of Amgen Inc.'s blockbuster EPO products are facing a further downturn, this time thanks to the Centers for Medicare & Medicaid Services (CMS), and the company's stock on Tuesday lost 3.7 percent as a result.
Specifically, its shares (NASDAQ:AMGN) fell $2.06 to $54.01, well off the stock's 52-week high of $77.
The agency late Monday publicized its proposal to limit coverage of erythropoiesis-stimulating agents (ESAs) for beneficiaries with certain cancers and related neoplastic conditions, a decision that's the latest in a wave of negativity based on safety questions about the red blood cell boosters.
Last week, members of an FDA advisory committee recommended curbing EPO use, the agency added a black box warning to the label two months ago, and Congress has continued a longstanding probe into the products.
The CMS proposal could become final by the middle of August, an agency spokesperson told BioWorld Today.
Private insurance often follows CMS' lead, and the agency attributed its restrictions to EPO's harmful side effects on a patient's underlying cancer and its belief that the disease increases the risk of adverse events related to EPO use.
Approved as supportive-care drugs to treat anemia in patients on chemotherapy and those with chronic kidney failure, a number studies have since shed light on safety issues showing that higher-than-recommended doses can lead to multiple complications. Those emerging safety concerns, which include thrombosis, cardiovascular events, tumor progression and reduced survival, prompted CMS to conduct a reimbursement review over the past few months.
Amgen, of Thousand Oaks, Calif., makes all the products in question: Aranesp (darbepoetin alfa), Epogen (epoetin alfa) and Procrit (epoetin alfa). Aranesp alone accounted for $4.1 billion of Amgen's total product sales last year. Procrit is sold by Johnson & Johnson, of New Brunswick, N.J.
In research notes, several analysts who follow Amgen said they were surprised by the scope and swiftness of the agency's pronouncement, and many have downgraded its shares in recent days given their growing expectation of slumping EPO sales.
Chris Raymond of Robert W. Baird & Co. said between 20 percent and 30 percent "of our already lowered Aranesp estimates are at risk," so he's dropped his revenue estimates to $3.8 billion, $3.2 billion, $3.3 billion and $3.4 billion over this year and the following three, respectively. During the same time frame, JPMorgan's Geoffrey Meacham predicted Aranesp revenue of $3.78 billion, $3.5 billion, $3.5 billion and $3.7 billion. Far more pessimistic was Joel Sendek with Lazard Capital Markets LLC, who forecasted $2.4 billion in revenue next year, followed by $2.3 billion and $2.3 billion.
An Amgen spokesperson told BioWorld Today that the company is reviewing CMS' proposal and "carefully examining" the scientific evidence underpinning it. The company "believes" that those drugs are safe and effective when used according to their FDA-approved labels, and Amgen officials have long stressed that only such suggested use is promoted.
In proposing its national coverage decision, CMS said that ESA treatment "is only reasonable and necessary" under specified conditions for treating anemia in certain cancers.
Going forward, it would preclude reimbursement for a host of anemia conditions, including anemia of cancer not related to cancer treatment; in cancer or cancer treatment patients due to deficient levels of folate, B-12 and iron, as well as hemolysis, bleeding or bone marrow fibrosis; in anemic patients with uncontrolled hypertension; from myelodysplasia or myeloid cancers; associated with the treatment of myeloid cancers or erythroid cancers; and associated with radiotherapy.
CMS also would cut coverage in patients treated with anti-angiogenic drugs such as Avastin (bevacizumab, Genentech Inc.) or antibodies directed against the epidermal growth factor receptor like Erbitux (cetuximab, ImClone Systems Inc. and Bristol-Myers Squibb Co.) and Vectibix (panitumumab, Amgen), as well as in patients with thrombotic episodes related to malignancy and those with erythropoietin-type resistance due to neutralizing antibodies.
In addition, the agency would no longer reimburse for prophylactic use to prevent chemotherapy-induced anemia and to reduce tumor hypoxia.
The proposal also said hemoglobin levels immediately prior to starting EPO should be less than 9 g/dL in patients without known cardiovascular disease and less than 10 g/dL in those with ischemic disease that cannot be treated with blood transfusion. Multiple analysts said about half of all chemotherapy-induced anemia patients begin with hemoglobin below 9g/dL.
The products' recently revised labeling includes more conservative prescribing instructions to advise doctors to monitor hemoglobin and adjust doses to maintain the lowest level necessary to avoid blood transfusions, warning that ESAs increase the risk of death and cardiovascular problems when dosed to target hemoglobin levels above 12 g/dL.
CMS also recommended some strict ceilings on EPO use, namely its proposal to cap coverage at 12 weeks per year and to halt reimbursement after four weeks if the treatment is not improving patients' hemoglobin and hematocrit levels.
In addition to use in oncology and anemic renal failure patients, the EPO products also are approved for a few non-renal applications. CMS, which is continuing to review its monitoring policy for their use in kidney disease, might also begin analyzing their non-renal use outside cancer. In addition, the FDA is planning an advisory committee meeting in the fall to discuss the safety of ESA dosing in anemic renal failure patients.
A public comment period on CMS' coverage of EPO in cancer is open until June 13.
The CMS coverage decision on EPO is one of several problems facing Amgen these days. There's possible competition to EPO on the horizon, the Supreme Court has decided against hearing an appeal brought by Amgen on a lower court's patent ruling and the company is facing an SEC investigation into allegedly slow timing of study data disclosure.