Amgen Proves It Has the Superior Drug

Updated from Tuesday, July 7

Amgen(AMGN Quote) said a pivotal clinical trial showed its experimental bone drug denosumab was superior to a competing drug from Novartis(NVS Quote) in preventing fractures and other bone-related problems in patients with breast cancer -- positive results that sent the company's shares sharply higher in after-hours trading.

Denosumab is the most important new drug to come out of Amgen's research labs in years and a key to the company's future growth as sales of its flagship anemia drugs, Epogen and Aranesp, have flagged in recent years.

The Food and Drug Administration is currently reviewing denosumab as a treatment for osteoporosis, with an approval decision expected later this year.

The breast cancer study is the first of several pivotal studies being conducted by Amgen to determine whether denosumab's ability to reverse bone loss might also help cancer patients who often suffer fractures when tumors grow, or metastasize, into bones.

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Analysts and investors who follow Amgen were already expecting denosumab to be a blockbuster (read: billion dollar-plus revenue generator) for the company as an osteoporosis treatment. The cancer market could tack on another billion dollars in denosumab sales.

Amgen shares closed Tuesday at $52.33 ahead of the denosumab announcement, but advanced 14% to $59.37 in after-hours trading.

In the phase III study enrolling more than 2,000 breast cancer patients, denosumab was able to reduce the risk of developing an on-study skeletal-related event by 18%, compared with Novartis' Zometa.

A skeletal-related event was defined as a bone fracture, radiation to bone, surgery to bone or spinal cord compression.