Corporate Advisory Insight: ODAC Panel

Eklavya Saraf from Thomson Finacial's Corporate Advisory Services group gives a brief look at the possible outcomes in the upcoming March 13th ODAC Panel meeting regarding Amgen's ESA drugs Transcript: With the recent volatility ahead of the ODAC panel meetings, we wanted to provide insight regarding the meeting this Thursday, March 13th concerning the use of ESA agents. Amgen shares have been under pressure due to concerns that the ODAC will recommend limiting the usage of ESAs in oncology settings, perhaps even restricting use in specific large market indications such as breast cancer. In May of 2007, the ODAC voted 12-5 to restrict ESA usage in tumors where safety signals exist (i.e. breast, head and neck, and lung). Aranesp is used primarily to treat anemia caused by kidney failure or chemotherapy. However, recent studies have shown that when used in high doses, the compound might exacerbate the conditions of certain patients suffering from advanced breast, head and neck, or lung cancers. The meeting could impact $1.3BN in Aranesp revenues from US and ex-US sales in cancer patients. The recently updated black box warning for shortened survival now includes all breast cancer patients and cervical cancer patients. Investors are expecting one of the following three likely scenarios: 1) An endorsement of label restriction 2) Further tumor type restriction 3) Complete withdrawal of marketing authorization of cancer With so much uncertainty, investors are focusing on the company's ability to offset revenue loss. They question whether Denosumab can become a large enough opportunity to fix the company, and speculate whether the company will reduce its R&D expenditure further to make up for possible revenue losses. Thomson Financial Corporate Advisory services clients will receive the news as soon as it happens. Until then, thank you for tuning into our briefing.

YouTube | March 11, 2008

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