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Radius Shares Jump as Amgen’s Bone Drug Suffers a Setback in Phase 3

Xconomy San Francisco — 

Amgen revealed late Sunday that safety problems have emerged in clinical testing of its closely watched osteoporosis drug, romosozumab (Evenity)—a development that will at minimum delay the drug’s path to approval, if not keep it off the market altogether.

The Thousand Oaks, CA, company said while romosozumab met its main goal and some key secondary goals in a 4,093-patient Phase 3 study called Arch, the study also showed an “imbalance” in serious cardiovascular side effects. Some 2.5 percent of patients on romosozumab had these side effects, compared to 1.9 percent on the osteoporosis drug alendronate (Fosamax). Amgen (NASDAQ: AMGN) didn’t specify what the heart problems were.

The Arch study was the second of two large, long Phase 3 trials intended to support FDA approval of romosozumab, and until now, a decision was expected by July 19. Amgen, however, said that it no longer expects the drug to be approved this year. The FDA will review the new data first before making a decision. In a research note, Leerink Partners analyst Geoffrey Porges speculated potential approval could be delayed until mid-2018 or later. The FDA will likely convene an advisory committee to review the data—a new, additional hurdle for Amgen—and “probably place significant restrictions on the product’s use, if it is approved at all,” Porges wrote.

The disclosure is a big setback for Amgen, which has been chasing rival Radius Health (NASDAQ: RDUS) to win approval of an osteoporosis drug that can help build up the strength of bones rather than just prevent them from becoming more brittle. Eli Lilly was the first to market with this type of drug when teriparatide (Forteo) was approved back in 2002, and despite its high price and reported pushback from payers—the New York Times has more here—it generated more than $1.5 billion in sales in 2016. Only now is direct competition emerging. The FDA cleared Radius’s drug, abaloparatide (Tymlos), on April 28, and romosozumab was expected to follow soon. Shares of Radius climbed more than 14 percent in pre-market trading on Monday morning on news of Amgen’s setback.

These drugs are potentially important options for osteoporosis patients who are at high risks of bone fractures despite treatment with other drugs. Osteoperosis is a degenerative bone condition that affects an estimated 10 million people in the U.S.—8 million women and 2 million men, according to the National Osteoperosis Foundation. The disease is typically first treated with generic bisphosphonates, like alendronate, that are meant to prevent bones from decaying further than they already have. But while the drugs are cheap, patients who take them can still suffer bone fractures. Amgen’s antibody drug denosumab (Prolia) is also prescribed to help preventing bones from breaking down. It booked $1.64 billion in sales in 2016.

Romosozumab, co-developed by Amgen and UCB, is part of a different group of treatments meant to strengthen bones instead. In the Arch study, patients on romosozumab for a year, and then alendronate for a subsequent year, had a 50 percent reduction in the risk of new spine fractures compared to patients on alendronate alone for two years. Romosozumab followed by alendronate also led to a 19 percent reduction in risk of other fractures compared to treatment with alendronate alone, Amgen said.

Shares of Amgen fell 2.6 percent early Monday morning.