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Amgen’s Neutropenia Drugs May See Falling Revenues in 2017

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Feb. 20 2017, Updated 9:06 a.m. ET

Neupogen revenue trends

Amgen’s (AMGN) Neupogen currently accounts for 50% of the total neutropenia market served by short-acting filgrastims. Intense branded and biosimilar competition in the US and Canada has negatively affected Neupogen’s revenue performance. Amgen expects this competition to further undermine Neupogen’s revenues in 2017.

If Neupogen can reduce its rate of revenue erosion in 2017, it may have a positive impact on Amgen stock and on the Vanguard S&P 500 ETF (VOO). Amgen makes up about 0.62% of VOO’s total portfolio holdings.

In 2016, Neupogen had sales of ~$765 million, which is a year-over-year (or YoY) drop of ~27.1%. The drug has witnessed solid competition from other neutropenia drugs such as Sanofi’s (SNY) Leukine, Teva Pharmaceuticals’s (TEVA) Lonquex, and Novartis’s (NVS) Zarxio.

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Neulasta revenue trends

In 2016, Neulasta’s sales totaled ~$4.6 billion, which is a YoY drop of ~1.4%, mainly due to reduced usage of myelosuppressive chemotherapy agents by cancer patients. This has affected the overall demand for neutropenia drugs. Amgen anticipates biosimilar competition for Neulasta as the competition it faced in 4Q16.

Amgen has been successful in managing Neulasta’s life cycle through the launch of the Neulasta Onpro Kit. This drug delivery option has been gaining traction and is currently being used by 50% of all Neulasta patients.

Amgen is also focused on direct-to-consumer (or DTC) marketing to spur demand for Neulasta. Lastly, the company has been actively involved in creating awareness about febrile neutropenia, which has been fatal for several patients.

In the next article, we’ll discuss Amgen’s PCSK9 inhibitor drug, Repatha, in greater detail.

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