These are the days of Amgen Inc.

All eyes were on the biotechnology giant last week, when its $10.3 billion buyout of Immunex Corp. was completed although for less money than originally expected, it was still the largest deal in the industry thus far and as the deadline came for an FDA decision on Aranesp (darbepoetin alpha) in oncology.

Aranesp, the extended-release, second generation of Amgen's blockbuster Epogen (epoetin alfa), was approved in September as a red blood cell booster for dialysis and nondialysis patients with chronic renal failure. It's already being used off-label in cancer settings, but a label designating the indication means a larger chunk for Amgen of what's been estimated by analysts as a $2 billion market.

This week, analysts and investors await more Amgen news. The company's second-quarter earnings are expected Wednesday, and signs looked especially positive: Neulasta (pegfilgrastim), approved in February as the second generation of Amgen's white blood cell stimulator Neupogen (filgrastim), has been well received, apparently not taking away Neupogen sales but expanding the market quicker than analysts had forecast, too.

That's good news for Amgen, since Neulasta means 25 percent to 50 percent more revenue than Neupogen per cycle, noted Meirav Chovav, analyst with UBS Warburg. May sales of Neulasta (the latest month available), according to IMS Health, were $32 million, up from $16.2 million in April.

Neupogen is still adding to the bottom line, though, and Chovav raised her total second-quarter estimates for the combined Neulasta/Neupogen franchise to $410 million from $380 million.

As part of Amgen merger, Immunex earlier this year had to get rid of Leukine (sargramostim), its cancer drug which is similar to Neupogen, selling rights to the drug to Schering AG, of Berlin, for about $380 million. Schering's subsidiary, Berlex Laboratories Inc., last week said it will market, manufacture and seek new indications for Leukine at facilities in Bothell, Wash., and Seattle, naming Crohn's disease as a target. Aranesp sales were less inspiring, totaling $10 million in May, and Chovav expects a second-quarter total of $52 million but unfavorable news regarding a different version of the drug might end up benefiting Aranesp somewhat, said Elise Wang, analyst with Salomon Smith Barney.

That drug is Eprex, the brand name chosen by Amgen licensee and competitor Johnson & Johnson for epoetin alfa in Europe and Canada. In the U.S., J&J sells epoetin alfa as Procrit and, in the U.S. (unlike overseas), Amgen manufactures the drug for J&J.

As of last week, Eprex had been associated with 141 cases of pure red blood cell aplasia (PRCA). For these patients, Eprex given for chronic renal failure apparently worked in reverse, causing the bone marrow to fail to make red blood cells. Seventeen new cases have been reported since April. Of those, seven were reported this year.

J&J said it will change the labeling for Eprex in Europe. Wang said she expects a "Dear Doctor" letter explaining the potential problems to be issued in the European Union.

The label when changed will call PRCA with Eprex "rare" instead of "very rare," and the recommendation for subcutaneous rather than intravenous administration will be removed, with IV administration recommended for hemodialysis patients when feasible.

For chronic renal failure patients, IV administration also will be recommended when feasible, with subcutaneous delivery after studying the risk-to-benefit ratio for each patient. The guidance to use 20 percent to 30 percent more drug with IV administration will be removed.

Wang pointed to a sudden upsurge in PRCA cases when human serum albumin was removed from the Eprex manufacturing process in 1998. Aranesp is made with albumin in the U.S. and without it in Europe. Although two cases of PRCA have been reported, one patient had been treated previously with Eprex and NeoRecormon and the other was a complex case being administered marrow-toxic drugs. Neither developed detectable Aranesp antibodies.

Last month, J&J sent out "Dear Doctor" letters in Canada and Switzerland, saying 124 cases of PRCA had been recorded at the time, blaming subcutaneous administration for the problem. In all but one PRCA case, J&J said, the drug was given by that route. The recommended method for Eprex (and for competing products), J&J said, is intravenous.

Wang noted, though, that the number of patients who developed PRCA with other epoetin products is significantly lower, and PRCA has "not appeared to occur more frequently with the [subcutaneous] route of administration."

J&J said it didn't believe manufacturing differences could explain the problems, adding that the company knew of six suspected PRCA cases with F. Hoffmann-La Roche's NeoRecormon and eight with Epogen/Procrit.

Cory Kasimov, analyst with Ryan, Beck & Co. LLC, said the numbers are still strong against the way Eprex is made.

"Just from the statistics and everything else that is available at this point, it would appear although it's not definitive by any stretch that this is a manufacturing issue," he told BioWorld Financial Watch.

Amgen pointed out that only two of the eight Epogen/Procrit cases were patients who developed the neutralizing antibodies.

It's all being sorted out. In the meantime, "while the overall reported rate of this safety issue for Eprex remains relatively low, these regulatory actions may provide a competitive marketing advantage for Aranesp," Wang wrote in a research note. "Currently, this safety issue does not appear to be a class issue as there has been only one documented case of neutralizing antibodies with Epogen in 12 years, and none to date with Aranesp," she wrote, although exact reasons for the development of Eprex antibodies and PRCA in Europe are not clear.

Another shoe dropped late last week, when published reports said a criminal investigation had begun into the plant in Puerto Rico where Eprex is made, and a fired ex-employee was making allegations in a lawsuit that he was forced to falsify data.

J&J's stock fell 15.9 percent Friday, closing at $41.85. Almost as if to point out the differences, Amgen's shares rose 4.5 percent, ending the day at $35.46.

Kasimov said it's "not surprising" that J&J would try to deflect blame from manufacturing until a certain cause for the PRCA cases is determined.

"That's the way you'd expect them to play that," he said. "Otherwise, they would be backing themselves into a corner, and this is going to be a fierce marketing battle between the two companies."

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