Amgen Proves It Has the Superior Drug

When calculating the risk of developing the first and all subsequent skeletal-related events, denosumab was again superior to Zometa, with a relative risk reduction of 23%, according to Amgen.

Both results were statistical significant, the company added.

The fact that denosumab demonstrated superiority over Zometa was an upside surprise for many investors, who, generally speaking, were expecting the two drugs to show equivalent efficacy.

The superiority observed in the breast cancer trial also bodes well for the success of the ongoing denosumab cancer studies. The most important and potentially lucrative of these trials involves prostate cancer patients, who have a very high rate of bone metastases.

With these results, denosumab could become the dominant drug to treat bone-related cancer complications, totally supplanting Zometa, said JPMorgan biotech analyst Geoff Meacham, in a note to clients Tuesday night.

Meacham upped his 2012 denosumab sales estimate to $3.5 billion from $2.4 billion. He has an overweight rating on the stock with a $70 price target.

On the safety side, Amgen said the incidence of osteonecrosis, or death of bone, in the jaw was seen "infrequently" in patients treated with denosumab and Zometa, with no statistically significant differences between the two treatment arms.

Bone drugs like Zometa are known to cause osteonecrosis of the jaw, or ONJ, which has grown into a significant risk factor. A link between denosumab and ONJ could be a potential negative but won't likely be commercially damaging as long as the rates between the two drugs are reasonably close.

The rate of infections, overall survival and time to cancer progression also were similar between patients treated with denosumab and those treated with Zometa.

In an email note to clients Tuesday night, Deutsche Bank analyst Mark Schoenebaum called the breast cancer results a "best case outcome," with denosumab superior to Zometa and no apparent increase in ONJ. Based on these results, he said, Amgen's stock price should trade into the $60s.