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Amgen stock gets a big boost from a study of bone-strengthening drugs

The biotech giant's stock jumps 13.9% after its experimental denosumab is rated higher than rival Novartis AG's Zometa.

July 09, 2009|Nathan Olivarez-Giles

Biotech giant Amgen Inc. saw its largest single-day stock-price jump in four years after announcing that its experimental bone-strengthening medicine worked better than a potential rival in a study comparing the two drugs in breast cancer patients.

On Wednesday, the Thousand Oaks company's shares rose $7.27, a day-over-day increase of 13.9%, to close at $59.50 on the Nasdaq exchange.

The stock boost began Tuesday night, when the study results for denosumab, Amgen's experimental osteoporosis drug, showed success in the first of three studies with cancer patients.

Wednesday's stock price rise was Amgen's largest since July 20, 2005, when it reported a 38% quarterly profit jump.

The study, which began in 2006 and included 2,049 participants, found that denosumab reduced the risk of developing skeletal complications in advanced breast cancer patients by 18% when compared with Novartis AG's Zometa, a leading osteoporosis drug, said Lisa Rooney, an Amgen spokeswoman.

It is too early to know how soon the medicine will be reviewed by the Food and Drug Administration, Rooney said.

The next clinical trial comparing the two drugs will begin this year and survey patients with solid cancerous tumors in other parts of the body. A third study will take place next year focusing on the two drugs' effectiveness with prostate cancer patients, she said.

Denosumab is an antibody designed to inhibit a protein called RANK Ligand, which leads to the breakdown of bones, a particular problem for cancer patients whose tumors spread to the bone, the Amgen spokeswoman said.

Analysts raised projections on peak annual revenue for the drug and price forecasts for Amgen stock Wednesday in reaction to the study's results.

"This represents a real breakthrough and sets a high bar for future competitors," said Geoffrey C. Porges, a senior analyst with Bernstein Research, in a Wednesday report to clients.

Cowen and Co. told its investors that denosumab "sets a new standard in oncology medicine." Credit Suisse analysts told investors they project that denosumab could overtake Zometa as the leading drug for cancer-related bone disease.

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nathan.olivarezgiles@latimes.com

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