Amgen’s share price tumble on worries about cardiovascular risk with Kyprolis shows how nervous investors are that the group overpaid for Onyx Pharmaceuticals, the originator of the blood cancer drug. The $10.4bn price tag depended heavily on heady expectations for Onyx’s star asset, which in turn is dependent on its ability to expand into earlier lines of multiple myeloma treatment.
A rather innocuous comment from Bank of America-Merrill Lynch analysts about the risks after meetings with competitor Celgene knocked $2.5bn off of Amgen’s market capitalisation and forced the California group to take the extraordinary step of clarifying what the other company had said. After months of unalloyed exuberance, it is now apparent that the market is sensitive to any signs that the biotech bubble might be deflating.
Second line or bust
The Bank of America analysts told clients that Celgene management believed that a different cardiotoxicity profile was emerging for Kyprolis than previously thought, based on concerns from specialists treating advanced multiple myeloma. Kyprolis is a proteasome inhibitor, like the older drug Velcade; unlike the Johnson & Johnson and Takeda competitor, however, Kyprolis is irreversible and as such may affect cardiovascular tissue differently.
The FDA cautions about cardiovascular risk with both - Kyprolis’ label has explicit warnings about heart failure, ischaemia and pulmonary hypertension, compared with the more limited warnings for Johnson & Johnson and Takeda's Velcade of low-blood pressure and monitoring of patients at risk for or suffering heart failure.
Thus, Celgene, which markets the biggest seller in the space in Revlimid, believes treatment with Kyprolis could be largely reserved for higher-risk multiple myeloma patients, including the third-line treatment for which it is now approved.
Investors have ascribed much of the drug's value to the expectation that it will be able to be used as a second-line treatment – positive data from the Aspire study would support this (Amgen’s Focus on Kyprolis data shows need to Aspire, August 16, 2013). The drug is forecast to become the second-biggest seller in the space by 2018, with sales of $1.9bn, according to EvaluatePharma’s consensus.
After the Bank of America comments became widely known, Amgen was forced to go on the offensive, and called the analysts' note "misleading". The group also said it spoke to Celgene, which said it had told the analysts of “anecdotal reports” of cardiotoxicity from multiple myeloma treatment centres, but that the event rates did not differ from those found in clinical trials.
The damage was already done: shares fell 3% yesterday to $112.25. They rose less than 1% to $113 in early trading today.
What, me worry?
Given that the as yet unrealised value of Kyprolis played a role in Amgen’s negotiations to acquire Onyx, yesterday’s commotion no doubt had investors reassessing the 7% rise in Amgen’s value after the transaction (Level-headed negotiating hands Onyx to Amgen at last, August 27, 2013).
It is true that cardiovascular risks are well characterised and thus should not cause much worry. This is a view taken by ISI Group analyst Mark Schoenebaum, with the caveats that Kyprolis trial populations so far were at lower baseline risk than those of Velcade, and no comparison can be made until the head-to-head Endeavor trial reads out in 2015 or 2016. This study includes a dose double that of the labelled indication, raising the risk that a clearer cardiovascular signal could emerge, however.
Mr Schoenebaum said the worst-case scenario would be for Kyprolis to remain in its current third-line position – a disappointment, to be sure, but nowhere near the disaster faced by Ariad Pharmaceuticals with suspension of US sales of its leukaemia drug Iclusig.
But in the context of a biotech bull market that is turning decidedly cautious as 2013 draws to a close, this was news that Amgen did not need.