Amgen Looking Anemic

Updated from 10:07 a.m. EDT

Shares of Amgen (AMGN Quote) sank Tuesday, at one point striking a 52-week low, after the biotech suffered another setback for its multibillion-dollar anemia drugs Epogen and Aranesp.

The latest blow came from the Centers for Medicare and Medicaid Services, which said it may limit payments for the drugs in response to rising reports of safety concerns. The proposal would restrict the types of cancers for which the drugs can be used and put limits on the length of treatment for chemotherapy-induced anemia.

The agency announced its proposal after the previous market session had ended, and investors wasted no time bailing out on Amgen when the new trading day began. Recently, the stock dropped $2.67, or 4.8%, to $53.39 on volume that was nearly triple the daily average for the past three months.

Amgen fell as low as $52.36, its worst level of the last year.

Last year, Aranesp's sales totaled $4.1 billion, and Epogen had revenue of $2.5 billion. Together, they accounted for 46% of Amgen's revenue.

The government's proposal also affects Johnson & Johnson's (JNJ Quote) Procrit, which is the same as Epogen and is licensed from Amgen. Shares of J&J slipped 44 cents to $62.17. A year ago, Procrit provided $3.2 billion in sales, or 6% of J&J's corporate revenue.

The anemia drugs are called erythropoiesis-stimulating agents, or ESAs. They are genetically engineered versions of a natural protein made by the kidney. The protein, erythropoietin, increases the number of red blood cells.