another good summary .......
Tuesday December 22 11:21 AM ET
Anemia Drug Ruling Boosts Amgen
By PHIL GALEWITZ AP Business Writer
NEW YORK (AP) - Amgen Inc. (Nasdaq:AMGN - news) solidified its position on top of the biotechnology world with its legal victory over Johnson & Johnson involving its blockbuster anemia drug.
The ruling could add nearly $1 billion in annual sales to the $2.34 billion company, analysts say. Amgen already is twice as big as its nearest biotech rival.
An arbitrator ruled Friday that the Thousand Oaks, Calif.-based company owns the exclusive rights to its next-generation anemia drug to succeed its franchise anemia drug EPO while rejecting Johnson & Johnson's demand that it be allowed continued marketing rights on the next generation latest drug, known as NESP.
The decision means Amgen Inc. could see a big boost in sales for a product that makes up nearly half its total sales. While the drug makes up just 5 percent of J&J's sales, the loss represents the latest in a series of setbacks that have analysts wondering about the health giant's future profit growth.
Amgen's stock, which shot up 14 percent on the news Monday, added 1.8 percent by late this morning, rising $1.871/2 to $102.183/4 a share on the Nasdaq Stock Market. J&J, which tumbled $2.621/2 on Monday, was up 683/4 cents at $77.561/4 at late morning on the New York Stock Exchange.
EPO, short for erythropoetin, was created by Amgen in the early 1980s and is now one the top selling drugs in the world. It took in more than $3 billion last year for its three manufacturers, Amgen, J&J and Roche.
The drug, which Amgen sells under the brand name Epogen, is injected three times a week. It fights anemia, a common and serious problem in patients with failing kidneys, cancer patients undergoing chemotherapy, and other surgical patients. Anemia causes severe fatigue and heart pains.
NESP, also created by Amgen, is short for novel erythropoeisis stimulating protein. This drug, now entering the final phase of human testing, is expected to largely replace EPO because it is injected just once a week. The improvement could enable patients to eventually give themselves the drug at home, analysts say.
In 1985, Amgen sold Johnson & Johnson U.S. marketing rights to EPO for all treatments except kidney dialysis. At the time Amgen was a struggling, cash-starved startup. J&J also got right to sell the drug for all uses overseas except for China and Japan. It markets the drug under the name Procrit.
Johnson & Johnson, based in New Brunswick, N.J., claims NESP is also covered by the original licensing agreement with Amgen because it was basically an upgraded version of EPO. Amgen claimed NESP is a completely different drug and the arbitrator ruled in its favor.
As a result of the decision, analysts expect Amgen's share of the market to go from $1.36 billion to more than $2 billion when NESP becomes available in 2001, and higher in subsequent years.
Before the ruling, some analysts had doubted the company's research prowess. Amgen is working on major new drugs for weight loss and Parkinson's disease, but both are least four or five years away.
''Before this ruling we did not know if they had a pipeline,'' said Matt Geller, analyst with CIBC Oppenheimer. ''Now this shows they do.'' |
