|Merger Aversion |
Amgen's stock has drifted south since announcing the merger
Immunex ( IMNX) is hoping to make a big splash in New Orleans starting Friday, as dermatologists gather for the annual meeting of the American Academy of Dermatology in the first major medical conference of the year. The Seattle-based biotech firm will be talking up its blockbuster anti-inflammatory drug, Enbrel, as a potentially new treatment for psoriasis, a painful skin disorder. Enbrel is already the dominant drug in the multibillion-dollar market for rheumatoid arthritis, so expansion into psoriasis -- another billion dollar-plus market -- will bolster further Enbrel's growth. And of course, what's good for Immunex is good for Amgen ( AMGN), as the companies are in the midst of a $16 billion
merger. Amgen's own plate is chock full of tasty morsels for investors these days (more on these later) but the success of the merger depends heavily on Amgen being able to chow down on heaping portions of Enbrel-derived cash over the next several years.
And as patients took Enbrel longer, more of them improved. After six months of treatment, about half the patients saw symptoms reduced by 75%. These results are on par with or better than results from two other promising, but still unapproved, psoriasis drugs -- Genentech's ( DNA) Xanelim and Amevive from Biogen ( BGEN). The Enbrel data are from midstage testing, so Immunex doesn't expect to get Food and Drug Administration approval for Enbrel on psoriasis until 2004. Amevive, by comparison, could gain FDA approval in the second half of this year. But Enbrel has some built-in advantages. The drug is already on the market, so dermatologists could start using it off-label (for illnesses for which it hasn't received final FDA approval) in their psoriasis patients. In fact, many dermatologists, including Gottlieb, already are using Enbrel to treat patients suffering from psoriatic arthritis, a related disease for which Enbrel received FDA approval last month. Also, dermatologists could favor Enbrel over other, new psoriasis drugs because of its solid and lengthy safety record in more than 100,000 rheumatoid arthritis patients.