According to the IMS Institute for Healthcare Informatics, a part of IMS Health, the global oncology or cancer market is expected to reach revenues of $147 billion by 2018. Amgen is focused on strengthening its oncology portfolio.
Neulasta and Neupogen
Launched in 1991 and 2002, respectively, Neulasta and Neupogen are used to treat infections arising from neutropenia, a side effect of chemotherapy. According to WebMd, “People with neutropenia have an unusually low number of cells called neutrophils. Neutrophils are cells in your immune system that attack bacteria and other organisms when they invade your body.” A reduced number of neutrophils results in ulcers, rashes, and abscesses.
Neulasta and Neupogen are similar in function, but the former is administered only once per chemotherapy cycle, while the latter has to be given several times to obtain the desired result. Given Neulasta’s ease of use, many Neupogen patients have shifted to Neulasta. Amgen has also introduced an on-body injector for this drug, which has managed to reach 8% of the total Neulasta patients. This allows patients to inject the drug at home instead of visiting hospitals or clinics after their chemotherapy.
Neupogen lost its patent exclusivity in December 2013 and is facing competition in Europe from Teva Pharmaceutical’s (TEVA) biosimilar Granix. In March 2015, the Food and Drug Administration, or FDA, approved the first US biosimilar for Neupogen, Novartis’s (NVS) Zarxio. Additionally, Neulasta will also face patent expiry in the US in October 2015 and in Europe in August 2017. The FDA has received the application for Apotex’s biosimilar version of Neulasta. If this biosimilar is approved, it will likely lead to substantial revenue loss for Amgen (AMGN).
Kyprolis, launched in 2013 as a competitor to Celgene’s (CELG) product portfolio, is focused on multiple myeloma, a type of cancer. Amgen’s Xgeva is used to treat osteoporosis, or thinning of the bones, in patients suffering from certain types of cancer. Originally used as a second line of treatment, Amgen’s Vectibix was approved in 2014 as a first line of treatment for metastatic colorectal cancer, boosting its revenue potential. Finally, Nplate is used to treat low blood platelet counts in patients suffering from chronic immune thrombocytopenia, a disorder in which the blood does not clot.
Investors can get diversified exposure to Amgen’s strong oncology portfolio while avoiding unique company risks by investing in the iShares NASDAQ Biotechnology ETF (IBB). IBB invests 8.53% of its total holdings in Amgen.