Good News for Amgen Is God News for Biotech
February 03 2017 - 12:59PM
Dow Jones News
By Charley Grant
Biotechnology, lately the stock market's laggard, may finally be
on the mend.
Amgen announced a highly anticipated clinical trial involving
its new anti-cholesterol drug, Repatha, was successful in reducing
the risk of cardiovascular events in patients with heart disease.
That should bolster the case for doctors to prescribe Repatha,
which carries a price tag above $14,000 a year before rebates and
discounts, instead of older statins that cost much less. Amgen
shares were up 4% Friday morning. Shares of smaller biotech
companies developing similar drugs were higher as well.
The good news comes with some caveats: Amgen won't present the
complete trial data until March, so it remains unclear to what
extent Repatha improves health outcomes. Repatha is also subject to
a legal battle with Regeneron and Sanofi surrounding the
intellectual property of their competing drug, Praluent.
Still, the positive result is significant. Repatha came to the
market in 2015 amid high expectations, but total sales so far have
been less than $150 million. Payers have pushed back against the
drug's relatively high price absent hard data on cardiovascular
outcomes, and as a result most of the prescriptions issued were
turned down by payers such as insurers.
But expectations for Repatha are still high over the long term.
Analysts expect nearly $3 billion in annual sales by 2022,
according to FactSet. Negative data on the drug would have called
those expectations into question.
Since sentiment plays a large role in biotech stock prices, the
trial success is also good news for the industry overall.
While drug pricing controversies and fears of new regulation
battered stocks last year, so did a relative absence of positive
clinical data. New drug approvals dipped to a multiyear low in
2016, and high profile clinical trial failures in key diseases like
Alzheimer's and lung cancer helped dim investor enthusiasm.
Risks to the sector haven't vanished altogether. But with the
Nasdaq Biotechnology Index more than 25% below all time highs, a
little positivity might go a long way for shareholders.
Write to Charley Grant at charles.grant@wsj.com
(END) Dow Jones Newswires
February 03, 2017 12:44 ET (17:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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