Amgen drug expected to get approval

For Amgen, the release of its next would-be blockbuster medicine may be a chance to avoid pitfalls of the past.

After sales of heart drug Repatha finally increased in last month’s quarterly earnings, investors are focusing on Amgen’s first-in-class migraine therapy as the stock seeks to recover from a rough few months for mature biotech companies.

The Food an Drug Administration is expected to let Amgen and its partner Novartis know by Thursday about the widely expected approval for Aimovig. The main concerns are how the migraine drug will be priced and how many patients it can attract before new competitors reach the market.

“The focus will be on an agreeable price with managed care companies that allows access to patients,” said Michael Yee, an analyst with Jefferies. Yee expects Amgen to list Aimovig in the mid- to high-thousanddollar range, with the price falling closer to $5,000 after rebates.

Pricing remains key after the biotech struggled to win over insurers with its $14,000-a-year Repatha injection. Rising list prices in the industry have prompted pharmacy benefits manager Express Scripts to pressure drugmakers to bring down the cost of the coming class of migraine preventives, known as CGRP inhibitors, Reuteers reported last month. Analysts expect Aimovig to generate almost $1 billion in sales by 2023 as Amgen looks to diversify to help replace revenue from its aging line.

In a review of CGRP inhibitors last month, the Institute for Clinical and Economic Review, a Boston nonprofit that evaluates the cost-effectiveness of new drugs, used a placeholder price of $8,500 per year for Aimovig.

“You can point to that recent evaluation that gave an upper-mid-single thousands price, which I think would be appropriate and support uptake,” William Blair analyst Matt Phipps said.

“The big thing with this class of drugs is that it is attacking a much more patient-symptomatic disease, and has pentup patient demand that is notable,” Phipps said. “Nobody is knocking on their doctor’s door for a (drug) like Repatha, because they don’t feel better immediately” while Aimovig may offer them quick relief.

Another difference: Amgen will be first to market with an expected lead time of about six months. Rival treatments from Eli Lilly, Teva Pharmaceutical, and Alder Biopharmaceuticals are expected to be approved at the end of this year or early next year.

While the FDA decision expected this week will serve as an important next step for some investors and analysts, Yee at Jefferies notes that another approval brings more potential for complications the introduction of billion-dollar drugs now that the industry is particular sensitive to drug pricing.