Is Amgen losing confidence in Novartis-partnered migraine program?

Analysts say the deal is a vote against expectations for this market.

Novartis will play a bigger role in the marketing of migraine drug erenumab—thanks to a reworking of its 2015 commercialization deal with Amgen—but analysts say the move may reflect reduced sales expectations.

Erenumab is an antibody to calcitonin gene-related peptide (CGRP), a class which analysts at Bernstein predict could grow into a $6 billion category at peak. Amgen is considered to be in pole position in the market, as it is expected to file for approval very soon. Why then is it giving away a sizable chunk of its marketing rights to Novartis?

It could reflect a recognition that the market for this new generation of migraine drugs is shaping up to be a bit of a battleground, says Bernstein. Amgen is vying with three other CGRP inhibitor developers—Eli Lilly, Teva and Alder Biopharmaceuticals—and all four drugs have shown similar efficacy in late-stage testing, completely eliminating migraines in 10% to 20% of patients and cutting attacks in half in more than 50%.

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Under the new terms—of which the finances are being kept under wraps—Novartis claims co-commercialization rights to erenumab in the U.S. and takes sole responsibility for the drug in Canada while retaining rights in the rest of the world other than Japan, where Amgen will keep full control.

"This is a vote against expectations for this market," say the Bernstein analysts in a research note. "Amgen is a major pharma company and despite [Novartis] being a 'friend', it is almost inconceivable to believe it would share the lucrative US market if it believed this will be a $10 billion-plus market (as some expect)."

They note however that the decision to part with Novartis is practical, particularly as Amgen's commercial operations currently have their hands full rolling out cholesterol-lowering antibody Repatha (evolocumab) and UCB-partnered romosozumab, due for an FDA verdict later this year, and battling competitors to big-selling anti-TNF drug Enbrel (etanercept).

Further, Amgen currently lacks a commercial field force in neurology, while Novartis has one in place detailing multiple sclerosis drug Gilenya (fingolimod).

"We think that Amgen, fresh from the battles of the PCSK9 and anti-TNF markets, have taken a very realistic look and decided not to double down on anti-CGRP," say the analysts.

Amgen wouldn't be the first to look askance at the commercial prospects for the CGRP inhibitor drug class in light of potentially fierce competition. Merck & Co decided to sell its oral CGRP inhibitor program—including phase 3 candidate MK-1602—to Allergan in 2015 for $250 million, with analysts suggesting that was prompted by the view that the pipeline looked a little overcrowded.

According to Amgen's commercial boss Anthony Hooper, the revised terms with Novartis will "create meaningful value over the life of this first-in-class program by enabling us to more effectively, and perhaps even more rapidly, reach people who live with the impact of migraine on a daily basis."