FDA Beefs Up Anemia Drug Warning Labels

The Food and Drug Administration has updated warning labels on anemia drugs made by Amgen(AMGN Quote - Cramer on AMGN - Stock Picks) and Johnson & Johnson(JNJ Quote - Cramer on JNJ - Stock Picks) to reflect previously disclosed concerns linking excessive use of the drugs in cancer and kidney disease patients to higher rates of death, heart attacks and blood clots.

The updated label for so-called erythropoiesis-stimulating agents like Amgen drugs Epogen and Aranesp was widely expected, but determining how it will affect anemia drug use -- and Amgen revenue -- in the future is still being sorted out by investors.

Amgen shares were recently up a penny to $56.21 in recent trading.

Revisions to FDA drug labels may seem rather arcane, but it's tremendously important here because Aranesp and Epogen have come under intense pressure because of safety concerns. As a result, sales are falling.

Epogen sales fell 5% in the third quarter to $602 million; while Aranesp sales slumped 23% to $818 million.

Consensus estimates call for Aranesp sales to fall 17% next year. Epogen sales are expected to fall 4% next year and drop another 2% in 2009.

For chronic kidney failure or kidney dialysis patients, the new label recommends that patients be given an anemia drug like Epogen to maintain their hemoglobin level between 10 and 12 grams a deciliter -- a recommendation that generally fits within current treatment guidelines.

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