FDA Panel Tightens Anemia-Drug Standards

Schoenebaum has an outperform rating on Amgen; his firm doesn't have a banking relationship with the company.

Other analysts aren't as bullish. Morgan Stanley's Steve Harr advised clients Thursday to sell the Amgen rally. He believes greater-than-expected cuts to Aranesp sales are looming, which could jeopardize Amgen's ability to earn at least $4 a share this year.

Harr has an equal rate, or neutral, rating on Amgen and his firm doesn't have a banking relatonship with the company.

Troubling Data

Drugs like Aranesp, formally known as erythropoiesis stimulating agents, or ESAs, stimulate the production of hemoglobin in patients undergoing cancer treatments, which can often cause severe anemia. For years, it was believed that aggressive use of anemia drugs was better for cancer patients and potentially helped them live longer.

But over time, that dogma has come under attack as clinical trials produced data showing that higher doses of anemia drugs led to worse outcomes for cancer patients.

In some of these studies, cancer patients treated with Aranesp had a higher risk of death compared to those who weren't treated with the drug. Some scientists believe that ESAs might actually encourage tumor growth.

These issues led the FDA to convene its first advisory panel meeting last May, which was followed by the agency's decision to revamp the Aranesp and Procrit labels to recommend the lowest dose of the drugs. It also recommended that patients' hemoglobin levels not rise above 12 grams per deciliter.

The Centers for Medicare and Medicaid Services, the agency in charge of government-run health insurance, has instituted even more restrictive policies. It refuses to reimburse doctors and hospitals for use of anemia drugs above a threshold of 10 g/dl.

Since these actions by the FDA and Medicare, additional clinical studies -- notably in lung, breast and head-and-neck cancer -- have been published linking anemia drugs to poor outcomes for cancer patients.

Granted, all of these studies used higher doses of the drugs than currently recommended, but it nonetheless spurred the FDA to call together cancer experts again on Thursday to determine whether further restrictions need to be put in place.

Company Concessions

Even before the meeting began, Amgen officials conceded that there needed to be more safeguards against overuse of Aranesp in cancer patients.

During its presentation to the advisory panel, the company said it would agree to labeling changes that would instruct doctors to delay the use of Aranesp until patients had a hemoglobin level of 10 g/dl -- lower than the current recommendations.

The company also agreed that Aranesp should not be used continuously in patients that don't respond to the drug. It also will voluntarily halt all broadcast advertising of the drug.

But at the same time, Amgen officials, joined by colleagues from Johnson & Johnson, strenuously argued that the benefit of anemia drugs outweigh the risks. The companies pointed to data from 59 studies of various types of cancer patients in which no clear or consistent signal of harm could be found to definitively link the drugs to increased death or tumor growth.

The FDA argued otherwise, citing eight studies in which patients treated with Aranesp or Procrit either died sooner or had their tumors grow faster.

Further studies are underway, designed specifically to address the question of whether anemia drugs are safe for use in cancer patients. Definitive answers, however, likely won't come for years.

Know What You Own: Amgen operates in the biotechnology and healthcare sector, and some of the other stocks in its field include Genentech DNA, Biogen BIIB, Genzyme GENZ, Bristol-Myers Squibb BMY and Glaxosmithkline GSK. These stocks were recently trading at ($81.33, +1.47%), ($60.65, +2.14%), ($74.02, -0.32%), ($21.39, +0.14%) and ($41.51, -1.45%) respectively. For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.