December 14, 2010 / 12:37 AM / 9 years ago

UPDATE 2-Amgen shares rise on denosumab data

* Improves bone metastasis-free survival

* Overall survival similar between drug, placebo groups

* Shares rise nearly 7 percent (Adds analyst comments, background)

By Toni Clarke

BOSTON, Dec 13 (Reuters) - A clinical trial of Amgen Inc’s (AMGN.O) bone drug, Xgeva, has shown it can delay the time it takes for prostate cancer to spread to the bone, opening up a potentially huge new market.

The company’s shares rose nearly 7 percent in trading after the close of the market.

Results from a trial of 1,432 men with hormone refractory prostate cancer showed the drug, also known as denosumab, improved bone metastasis-free survival by a statistically significant 4.2 months.

“This was very, very positive news for the company,” said RBC Capital Markets analyst Michael Yee. “This is a potential $500 million to $1 billion opportunity — a new indication and a new potential market for denosumab.”

Denosumab, approved to treat osteoporosis under the brand name Prolia, is the first in a new class of medicines that work by blocking a protein that activates bone-destroying cells called osteoclasts.

The thesis of the prostate cancer trial was that agents that inhibit osteoclasts from breaking down bone might modify the tissue and make the bone less receptive to tumor activity.

When cancer spreads to the bone, it can seriously damage or weaken the bone around the tumor, producing fractures, spinal cord compression, or a need for radiation or surgery.

Analysts, on average, have forecast annual denosumab sales of $2.5 billion by 2014, according to Thomson Pharma.

Still, the drug did not improve overall survival, which was a secondary goal of the trial, and some analysts said the robustness of the data might be questioned.

“I’d call the benefit that we’re seeing here meaningful but somewhat modest,” said Eric Schmidt, an analyst at Cowen and Co. “There was no trend toward improved survival. That would have been a real nice benefit to have.”

Expectations for the study had been fairly low, so analysts said they expect the stock to rise when the market opens on Tuesday. Amgen’s shares rose 6.8 percent to $57.80 in after hours trading from a close on Monday of $54.10.

The company said the overall rate of serious adverse events were generally similar between Xgeva and the placebo group, with hypocalcemia, or too little calcium in the blood, and osteonecrosis of the jaw, a bone disease affecting the jaw, seen more frequently in the Xgeva arm. The rate of ONJ in the Xgeva group was similar to that seen in earlier trials.

Geoffrey Meacham, an analyst at J.P. Morgan, said he expects the drug to be approved in the second half of 2011 or early 2012. (Additional reporting by Deena Beasley and Bill Berkrot; editing by Andre Grenon)

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