10. Amgen: Pushing hard on R&D, despite the risks

Sean Harper

2013: $4.08B
2012: $3.38B
Change: Up 20%
As a % of revenue: 22%
Head of R&D: Sean Harper

When Amgen ($AMGN) acquired the viral cancer vaccine T-Vec in a $1 billion buyout deal back in 2011, then-R&D chief Roger Perlmutter clearly felt he had a potential blockbuster on his hands. But those high hopes have always generated some skepticism among analysts, many of whom were nodding sagely when T-Vec recently just missed statistical significance for improving overall survival in a top-line analysis of its Phase III study.

Perlmutter's new job as head of R&D at Merck ($MRK) may give him a chance to prove that this therapy has some real potential. He recently executed a deal to pair Merck's hot immuno-oncology drug MK-3475 with T-Vec. And there's also a program matching T-Vec with Yervoy.

T-Vec remains one of Amgen's top late-stage drugs, a key program in a company that has continued to rely heavily on Perlmutter's earlier choices. Amgen is close to halfway through a blizzard of Phase III studies for its PCSK9 drug evolocumab (AMG 145), repeatedly demonstrating its ability to dramatically lower rates of bad cholesterol, which is right on track for a regulatory application later in the year.

Ironically, it was a steep Phase III tab that forced R&D's share of the budget to uncomfortably high levels, causing some deep unease among investors that triggered a reorganization of R&D under Perlmutter and may have played a big role in getting him forced out alongside CEO Kevin Sharer. Similar numbers, though, don't appear to be roiling the waters for new CEO Robert Bradway, with R&D spending up 20% year over year and consuming a bit more than 22% of the revenue stream at Amgen last year. Bradway, though, is still celebrating the positive effects of some smart dealmaking, including last year's acquisition of Onyx.  

But it hasn't all been smooth sailing. (It never is.) Last fall omecamtiv mecarbil failed a key Phase IIb heart failure trial, just weeks after Amgen paid Cytokinetics ($CYTK) $25 million to expand their licensing pact. And investigators say they'll wait for a read-out on the data from a Phase II study of an oral version of the drug before deciding whether to green-light a Phase III program or scrap the effort.

Another Perlmutter program, AMG 386, was pushed ahead in the clinic for ovarian cancer. Last summer Sean Harper touted the news that the anti-angiogenesis drug, now dubbed trebananib, achieved promising top-line results from the first of three Phase III studies.

Amgen and AstraZeneca ($AZN) pushed their IL-17 psoriasis treatment brodalumab into Phase III in the fall of 2012. Harper has already boasted that the therapy achieved primary and secondary endpoints in Phase II, with bullish expectations for their Phase III program. The big problem is that there are a number of rivals for this indication in Phase III, leaving Amgen to fight for a slice of the pie.

CEO Bradway was brought in to reposition the company for the future, and he's been winning kudos on that score. Amgen--now more of a pharma company than the Big Biotech it bills itself as--has reorganized and expanded in the Asian market while fighting along two fronts in the biosimilars niche--both developing new knockoffs as well as pushing state laws that are likely going to hamper adoption of cheaper replacements of the company's lucrative anemia franchise.

For more:
Special Reports: Top 15 highest paid biopharma R&D chiefs - Sean Harper | 20 Highest-Paid Biopharma CEOs of 2012 - Robert Bradway - Amgen
Amgen beats a path to the FDA, looking for an early approval of leukemia drug
Amgen's viral cancer vaccine T-Vec tackles melanoma tumors in PhIII

10. Amgen: Pushing hard on R&D, despite the risks

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