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Which of Amgen’s Drugs Could Witness Muted Growth in 2016?

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Managing side-effects

While Xgeva, Neulasta, and Neupogen do not directly cure cancer, they are extensively used to manage the side-effects that arise from cancer and chemotherapy used by cancer patients. Specifically, Xgeva focuses on preventing SREs (skeletal-related events) while Neulasta and Neupogen are used to treat neutropenia infections.

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.

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Xgeva performance

Wall Street analysts have projected that Xgeva’s revenues will reach about $1.6 billion in 2016, which represents a YoY (year-over-year) growth of about 12.3%. Amgen (AMGN) aims to establish the superior clinical profile of Xgeva, as compared with Novartis’ (NVS) Zometa (zoledronic acid), for preventing SRE’s in patients with NDMM (newly diagnosed multiple myeloma). Data from this Phase 3 head-to-head trial is expected in the second half of 2016.

If Xgeva manages to establish its superiority, it could boost Amgen’s share price as well as that of the iShares Nasdaq Biotechnology ETF (IBB). Amgen makes up about 7.8% of IBB’s total portfolio holdings.

Neulasta performance

The innovative delivery system Neulasta Onpro Kit has accounted for $1 billion of Neulasta sales within the first year of its launch. While different from its peer counterparts, Amgen’s Neulasta Onpro kit has played an important role in improving overall patient compliance, which results in lower healthcare costs.

Although the drug lost its patent protection in the US in October 2015, Wall Street analysts have projected that in 2016, Neulasta’s sales will reach $4.7 billion, which would mean a YoY decline of only 0.4%. This further highlights the increasing penetration of the Neulasta Onpro Kit and its significance as an effective switching barrier for patients. (For more on Neulasta Onpro Kit, please refer to “Repatha and Kyprolis Will Likely Become Blockbuster Drugs.”)

Neupogen performance

After its US patent expiry in December 2013, Neupogen has witnessed a gradual decline in revenues. Wall Street analysts expect the drug to experience a revenue drop of about 18.6% and earn about $853.4 million in 2016. Neupogen currently faces tough competition from Sanofi’s (SNY) Leukine, Teva Pharmaceuticals’ (TEVA) Granix (through subsidiary Cephalon), and Novartis’ (NVS) Zarxio (through subsidiary Sandoz).

Now let’s explore Amgen’s bone health franchise in 2016.

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