Amgen Reaches Contract With Glaxosmithkline to Sell Bone Drug
London-based Glaxo will pay $120 million initially for near-term milestones to share profits in Europe, and sell Amgens drug in countries where the Thousand Oaks, California- based company doesnt have a presence including China, Brazil, India and South Korea, the companies said in a statement. Amgen will market the drug in the U.S. and Canada and retain rights to sell it for cancer in Europe once approved.
Amgen is looking for denosumab to generate revenue and replace declining sales of its core medicines that treat anemia and arthritis. Denosumab, designed to be injected twice yearly, will be reviewed Aug. 13 by U.S. Food and Drug Administration advisers as a treatment for osteoporosis in post-menopausal women. It also is being tested against a variety of cancers.
“When you talk about the osteoporosis setting you are dealing with a very competitive market against a well-known generic, so a sure-footed marketing and partnering strategy will be critical,” said John Sonnier, an analyst with William Blair & Co. in Chicago, in a telephone interview before the announcement.
$2 Billion
Denosumabs annual revenue may reach $2 billion of the $8.7 billion market for osteoporosis by 2018, according to a June report by the sales research firm Decision Resources, based in Waltham, Massachusetts.
“This is a cancer and renal company, and they have been in partnership discussions for a while now,” Yaron Werber, an analyst at Citigroup in New York, said yesterday in a telephone interview.
The drug may cost patients about $1,200 a year, Werber said. Assuming Amgen receives a 25 percent royalty on sales outside the U.S., denosumab can generate $958 billion worldwide by 2012, Werber said. The companies didnt disclose the specifics of how profits will be shared.
“Our collaboration with GlaxoSmithKline will help Amgen bring the promise of denosumab to patients in Europe and other parts of the world more effectively than if we commercialized the drug globally on our own,” said Amgen Chief Executive Officer Kevin Sharer in the statement.
Partner in Europe
Jim Daly, an Amgen senior vice president, said at a Nov. 7 investor meeting that a sales force of 800 to 1,500 would be needed to promote the drug in Europe, and 500 to 1,000 representatives would be needed in the U.S.
More than 200 million people worldwide, including 25 million in the U.S., have osteoporosis, a disease that causes bones to deteriorate and break. The condition mostly affects elderly women.
Amgen will charge about $850 a year for denosumab, in line with other brand-name medicines for osteoporosis, said Eric Schmidt, an analyst with Cowen & Co. in New York, in a note to clients. He estimates the drug will generate more than $1 billion a year by 2015.
Competitors
Fosamax had $3 billion in sales in 2007 before cheaper generic copycats came on the market, diminishing revenue, according to data compiled by Bloomberg.
Amgen is betting doctors and patients want an alternative that adds benefit beyond those offered by Fosamax and other osteoporosis pills known as bisphosphonates. Those include Boniva, sold by Basel, Switzerland-based Roche Holding AG and Glaxo, Novartis AGs Reclast and Procter & Gamble Co.s Actonel.
Boniva generated $434.3 million in sales last year for London-based Glaxo and $1.02 billion for Roche. Actonel generated more than $1 billion last year, Procter & Gamble spokeswoman Tom Millikin said in a May 13 interview. Reclast, also marketed as Aclasta outside the U.S., had $254 million in revenue last year, according to preliminary annual sales results released by Novartis on Jan. 28. The medicine was approved in August 2007 by U.S. regulators and in October that year by European officials.
Amgens drug is faster acting, easier to give to patients, and free of side effects found with bisphosphonates, studies so far have shown. Fosamax and similar medications can, in some cases, make jaw bones crumble, and are tied to nausea, diarrhea and constipation, doctors say.