Amgen Pins Hopes on Bone-Drug Study

Amgen's (AMGN) hopes for a turnaround hinge largely on the details of a phase III study of the bone-building drug denosumab, which the company will release next week.

Amgen's FREEDOM study investigates the use of denosumab, a drug injected just under the skin once every six months, as a new treatment for women with post-menopausal osteoporosis.

If denosumab can match or surpass the efficacy and safety track record of currently prescribed osteoporosis drugs, it has the potential to generate $2 billion to $3 billion in new annual sales for Amgen, according to various analyst estimates.

That's revenue Amgen desperately needs as it fights to right itself after a disastrous 18 months in which safety, regulatory and reimbursement issues pelted its highly profitable anemia drug franchise and sent shares of the company plummeting.

Researchers will present full results from the denosumab FREEDOM trial Tuesday at the American Society for Bone and Mineral Research (ASBMR) annual meeting in Montreal.

Investor expectations for these data are high. Amgen shares are up 11% since late July, when the company announced via press release that the FREEDOM trial was a success, albeit leaving the details for the ASBMR presentation.

Amgen shares closed at $60.51 Tuesday, off the denosumab-fueled high of $65 in mid-August.

The FREEDOM study tests denosumab against a placebo, and thus doesn't provide a viable comparison to its competition. Wall Street observers will nonetheless consider its efficacy and safety track record with regard to currently prescribed osteoporosis drugs, most notably Merck's (MRK) Fosamax (now generic and administered as a daily or weekly pill) and Novartis' (NVS) Reclast, a once-yearly intravenous infusion.

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