Shares of

Amgen

(AMGN) - Get Report

edged up Monday, a day after the company presented results of a clinical trial showing a favorable performance of an experimental osteoporosis drug called AMG-162.

Analyst M. Ian Somayia of Thomas Weisel Partners said he was impressed by results showing that AMG-162, which is injected every six months, "was more effective in increasing bone mineral density" than was Fosamax, which, in the comparison test, was administered weekly. (Fosamax can be taken in pill or oral solution form once a week, or as a daily pill.)

Fosamax, the market leader for treating osteoporosis in post-menopausal women, is made by

Merck

(MRK) - Get Report

, which pulled its arthritis drug Vioxx last week. Patients receiving the Amgen drug had a much lower rate of gastrointestinal discomfort than did patients taking Fosamax.

The research showed that AMG-162 demonstrated a statistically significant gain in bone mineral density at the total hip compared with a placebo at 12 months, Amgen said. And at all doses tested, AMG-162 increased total hip bone-mineral density to a degree that was "similar to or greater than that resulting from" treatments with Fosamax during the 12-month study.

"We believe this profile could enable AMG-162 to displace Fosamax as the antiresorptive agent of choice for the 300,000 patients with hip and 700,000 vertebral fractures in the U.S.," Somaiya said in a research report Monday as he reaffirmed a peer perform rating on Amgen's stock. (He doesn't own shares, but his firm is a market maker.) Antiresorptive drugs prevent the breakdown and loss of bones.

However, AMG-162 is still many years away from the marketplace. Somaiya and other analysts say 2008 is probably the earliest Amgen could obtain approval by the Food and Drug Administration. The research results announced Sunday came from a phase II test, which is the second of three phases on the way to FDA approval. The more extensive phase III testing has only recently begun, and it could take 18 to 24 months to complete.

"We believe AMG-162 has blockbuster potential in the osteoporosis market, but

we note that the market is very competitive," said Mark E. Augustine of Credit Suisse First Boston in a report to clients issued the day after Amgen announced its test results at the American Society for Bone and Mineral Research in Seattle. Augustine said Amgen had estimated the 2003 market for post-menopausal osteoporosis at more than $4 billion. Fosamax recorded $2.78 billion in sales last year, he said.

Augustine noted that

NPS Pharmaceutical

(NPSP)

is expected to submit an application for its experimental drug Preos by year-end, and that

Novartis

(NVS) - Get Report

is conducting phase III tests of its drug Zometa to treat osteoporosis. Zometa has been approved by the FDA for patients whose cancers have spread to their bones and for patients suffering from multiple myeloma, a cancer of the blood.

Augustine, who is neutral on Amgen, noted that the company is conducting other phase III tests of AMG-162 in hopes of expanding its uses. In addition to eyeing the osteoporosis market, the company wants to know if the drug will work in improving bones weakened by hormone treatments for certain cancers and for several types of cancer that have spread to bones. (He doesn't own shares; his firm has had an investment banking relationship with Amgen in the last 12 months.)

Amgen's stock was up 11 cents to $57.87, having moved as high as $58.45.