Acceleron, Celgene Take Aim at Amgen’s Multibillion-Dollar Anemia Market

8/5/11Follow @xconomy

Amgen became the biotech industry’s biggest company largely because of a drug it developed in the 1980s for treating anemia. Plenty have tried, and failed, to knock Amgen off that pedestal ever since. But now a deepening alliance between Summit, NJ-based Celgene (NASDAQ: CELG) and Cambridge, MA-based Acceleron Pharma is taking one, and possibly two, more serious shots at the industry giant.

Celgene, the world’s third biggest biotech by market valuation, said earlier this week that it had agreed to expand its partnership with Acceleron to get the right to co-develop not just one, but also a second experimental drug the smaller company has designed against anemia. If the challengers are successful, they will prove to physicians that they can boost the body’s production of oxygen-carrying red blood cells to help patients fight anemia, without some of the safety concerns that have dogged Amgen’s products the past five years. And if that can be proven, the rivals will be in position to grab a piece of a market that, despite the safety worries, still generated $5 billion in worldwide sales for Amgen last year.

Celgene has had a remarkable growth run of its own the past decade with treatments for various blood cancers, but companies of that size need to aim high to sustain fast growth. That’s what has led it to zero in on a big new opportunity like anemia, says Acceleron CEO John Knopf. “When you’re a $25 billion company, you need a big hit,” Knopf said on a recent visit to his company’s offices.

How big is the anemia drug business exactly? Amgen lost $29 billion in stock market value in 2007 after its two anemia drugs were tied to higher risk of heart attack, stroke, and death when used at high doses, prompting the FDA to slap tight restrictions on their use. The worldwide market for anemia drugs generates more than $10 billion in sales each year, for patients with various states of kidney disease, and cancer patients who get anemic from chemotherapy that kills off otherwise healthy red blood cells just like tumors.

A little bit of science is required to understand how the new products are being made differently. Amgen’s drugs are genetically engineered forms of a hormone called erythropoietin that stimulates the production of red blood cells that carry oxygen through the blood, which people need to feel vigorous. One product is primarily designed for treating patients who are on kidney dialysis (Epogen), while the other (Aranesp) is a longer-lasting form that requires fewer injections, and is positioned for patients with less severe kidney disease and the chemotherapy-induced anemia.

Acceleron’s first alternative to this is … Next Page »

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