West Coast Editor

With their shareholder-approved merger set to close this weekend, Amgen Inc. and Abgenix Inc. finished their rolling biologics application begun late last year for panitumumab, the monoclonal antibody for colorectal cancer.

Amgen’s stock (NASDAQ:AMGN) closed Thursday at $72.62, up 60 cents. Abgenix’s shares (NASDAQ:ABGX) ended the day at $22.48, up 7 cents.

Christopher Raymond, analyst with Robert Baird & Co. in Chicago, maintained his "outperform" rating on Thousand Oaks, Calif.-based Amgen, with a $90 price target, and said he was "not sure enough people are paying attention" to the increasing value of the company’s Aranesp, the second generation of the red blood cell booster Epogen (epoetin alfa).

"The use of Aranesp in [chronic kidney disease] is likely a lot higher than people think, and maybe a lot higher than what Amgen has talked about it being historically," Raymond told BioWorld Today, citing a physician survey by Baird.

"What was most surprising to me was that 27 percent of their stage-three patients" are getting Aranesp, and these folks are not as sick," he added. By the end of this year, as much as 20 percent of Aranesp’s use might be in CKD patients, Raymond estimated.

In mid-December, Amgen made the offer to take over Abgenix, of Fremont, Calif., at $22.50 a share, or about $2.2 billion in cash. On Wednesday, 71 percent of the outstanding shares of Abgenix - more than 99 percent of the voting shares attending the meeting - cast ballots in favor of the transaction. (See BioWorld Today, Dec. 15, 2005.)

Amgen began working with Abgenix on panitumumab after acquiring Immunex Corp., of Seattle, for $10.3 billion in 2002.

The first epidermal growth factor receptor inhibitor to show a statistically significant improvement in progression-free survival in those who have failed standard chemotherapy, panitumumab could threaten New York-based ImClone Systems Inc.’s Erbitux (cetuximab), whose shares fell 20.6 percent in November, while Abgenix’s rose 37.7 percent, on the release of the top-line Phase III data. (See BioWorld Today, July 17, 2002, and Nov. 4, 2005.)

Full data from the Phase III trial will be disclosed next week at the American Association for Cancer Research meeting in Washington.

In another survey by Raymond’s firm, in the fourth quarter of last year, 26 percent of physicians polled mentioned panitumumab as the most promising new therapy or treatment strategy for third-line colorectal cancer, "not that surprising, given [panitumumab’s] strong top-line data-set, showing [the drug’s] superior dosing and safety profile," he wrote in a research report Thursday.

The compound "could displace Erbitux faster than some might expect," Raymond wrote, modeling revenues at $84 million in 2006, $299 million in 2007, and $730 million in 2008.

"I know I’m at the higher end [of estimates]," he said. "There is a train of thought out there that says Amgen will have to capture patients who are not already in the Erbitux camp. I don’t think so."

Amgen has "a sales force on the ground enmeshed with oncologists, and it’s probably the best oncology sales force out there," he said.

If panitumumab reaches the market for that indication, as well as head and neck cancer, its peak worldwide sales could reach $2 billion, Amgen said.

The buyout of Abgenix not only gives Amgen full rights to panitumumab, but brings aboard a 100,000-square-foot manufacturing plant and XenoMouse, the fully human monoclonal antibody technology, while eliminating a tiered royalty Amgen would have paid to Abgenix on future sales of denosumab (formerly AMG 162), which was created with XenoMouse.

Denosumab targets the RANK ligand and could be useful against osteoporosis, treatment-induced bone loss, bone metastases, multiple myeloma and rheumatoid arthritis. In February, Amgen reported Phase II data showing that twice-yearly injections of denosumab significantly increased bone mineral density in the total hip, lumbar spine, distal 1/3 radius and total body compared to placebo. Results of the one-year study appeared in the New England Journal of Medicine.