Amgen shares up as lawmakers enter anemia drug row

By Doris Frankel and Lisa Baertlein

CHICAGO/SAN FRANCISCO, Sept 5 (Reuters) - Shares in Amgen Inc (AMGN.O: Quote, Profile, Research, Stock Buzz) rose 2 percent on Wednesday and its options surged after U.S. lawmakers urged the government to reconsider payment limits for anemia drugs, which accounted for about half Amgen's 2006 sales.

The U.S. Senate on Tuesday passed a nonbinding resolution urging the Centers for Medicare & Medicaid Services to immediately reconsider payment limits for use of anemia drugs by elderly and disabled people with cancer.

CMS in July pared coverage for Amgen's Aranesp as well as Johnson & Johnson's (JNJ.N: Quote, Profile, Research, Stock Buzz) Procrit in July, due to safety concerns.

Amgen reaped $6.6 billion from sales of Aranesp and its older anemia drug Epogen last year. Sales fell 10 percent in the first half of this year, due to the CMS move and the U.S. Food and Drug Administration's decision in March to slap its strongest warning label on the drugs, which belong to a class known as erythropoiesis-stimulating agents (ESAs).

Analysts called the Senate's action a positive development for Amgen, which has been grappling with the blow to its most important business.

"The news is viewed as a positive for Amgen's future sales and earnings. It is welcome news to shareholders, who have seen shares of Amgen fall 24.84 percent so far this year prior to Wednesday's rally," said Frederic Ruffy, analyst at Optionetics, an options education firm in California.

Shares in Amgen rose $1.22, or 2.4 percent, to $52.56 in heavy volume on the Nasdaq.