Amgen, one of the biggest success stories of the biotechnology industry, has denied it is in crisis, despite facing a series of setbacks that pose the greatest challenge to the company in its 27-year history.
In an interview quoted in The New York Times Amgen chairman and chief executive Kevin Sharer said: “We are not in crisis, that’s for sure.” In a crisis “people don’t know what to do. People’s hair is on fire. Confidence is challenged. We’re not there”.
But the paper reports that some analysts are comparing this once-charmed company to a lumbering pharmaceutical giant that depends too much on an ageing portfolio.
Bear Stearns biotechnology stock analyst Mark Schoenebaum said: “The barrage of bad news that’s come out on Amgen in the past 60 days is absolutely unprecedented in the biotech sector.”
A series of setbacks have posed what many see as a serious threat to the company’s future. Recently Amgen shares took a battering following news that the firm had discontinued a late-stage trial of Vectibix® (panitumumab) designed to prove the drug’s efficacy as part of a potential first-line treatment for patients with colorectal cancer.
Further adding to Amgen’s woes, the US Food and Drug Administration has said that new safety and dosage information needs to be put on the labels of its two blockbuster erythropoiesis-stimulating agents, Aranesp® (darbepoetin alfa) and Epogen® (epoetin alfa), after studies suggested the drugs might cause heart problems or hasten the deaths of cancer patients. Preliminary data from an independent study looking at Aranesp for unapproved use in patients with head and neck cancer undergoing radiotherapy also showed that the drug fared no better than placebo.
The New York Times cites a report by Citigroup analyst Yaron Werber predicting that Amgen’s revenues will grow only 4% a year until 2010 – well below its 20% annual sales growth during 2003–6.
The company is said to have reacted to mounting uncertainty on future sales by taking cost-control steps, postponing the opening of a new factory in Ireland and cutting back on recruitment. Amgen has also revealed that chief financial officer Richard Nanula is to quit to “pursue other opportunities”.
While some industry commentators are beginning to raise questions about Amgen’s management, company executives have defended their strategies as being driven by science and sound medical considerations.