Biotech Values

[drbio45]

From Alex To -- AMGN: Could There Be a D-mab Commercial Strategy Centered on Cancer SRE?

maybe amgen stays out of osteoporosis market to increase pricing in the cancer market

• Amgen announced yesterday after the market close the top-line results of the third
and last of the 3 pivotal Phase 3 trials of D-mab in the cancer skeletal-related event
(SRE) trial. The study investigated the drug's ability to minimize fractures in cancer
patients with bone metastases. Like the two successful Phase 3 trials presented before,
this trial (in prostate cancer patients) demonstrated that D-mab is efficacious in this
setting. The drug demonstrated statistically superior results in lowering the number of
SREs as compared to Zometa, the most commonly used the drug in this setting. The
superiority is consistent when measured in the time to first event while on drug or in
the number of multiple fractures.

• One adverse event that is numerically more prevalent in this trial, as was the case
in the 2 previous pivotal trials, is osteonecrosis of the jaw (ONJ). While the higher
incidence of ONJ, no doubt, will be exploited by Novartis in defense of Zometa, we don't
think ONJ alone will be a killer of the drug in the regulatory sense. The devil will be
in the details. The most likely hold-up in the regulatory process, if there is one, will
still be any red flag relative to the incidence or progression of existing cancer. The
red flags could be from the pooled analysis of all of the D-mab trials to date. So, we
may not ascertain if there is any issue until we see the briefing documents for the
advisory panel meeting. Assuming Amgen files in 2H10, we will not get clarity until 2H11.
The cancer red flag which haunted D-mab in its osteoporosis panel can also be raised
again when a regulatory decision is due for the SRE indication.

• However, based on what we have seen so far, D-mab is clearly the best in the cancer
SRE market segment in terms of efficacy. Assuming the company successfully navigates
through the regulatory process and gets a clean label for the SRE indication, wouldn't it
be possible to construct a commercial strategy centered on cancer SRE, with peripheral
considerations for the osteoporosis market? In other words, if Amgen maximizes the
pricing of D-mab in cancer SRE, even to the point that the price is too high and not
competitive in osteoporosis market, Amgen may still maximize the overall commercial
potential for D-mab. With the difficulties Amgen encountered in the osteoporosis label in
front of both the FDA and EMEA, it is not certain how big the drug would be as a
treatment for osteoporosis even if Amgen prices competitively for that market and is
consequently price constrained in the cancer SRE market.

Alex To, MD
Managing Member
Cross Current Research, LLC
2 Research Way, 2nd Floor
Princeton, NJ 08540
609-243-0082 (office)
917-584-6903 (cell)
[e-mail]
https://www.crosscurrentllc.com