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Can Amgen’s Prolia Continue Its Strong Growth Trajectory in 2016?

Amgen's Valuation Drivers in 2016: The Inside Story

(Continued from Prior Part)

Prolia’s performance

With the continuous adoption of new patients and repeat usage by more than 65% of existing patients, Prolia is expected to keep on being a key growth driver for Amgen (AMGN). In addition to its superior clinical profile, Amgen’s DTC (direct-to-consumer) promotion has also played a pivotal role in boosting Prolia’s sales in US markets.

Wall Street analysts have projected that Prolia’s revenues will reach about $1.5 billion in 2016, which represents a YoY (year-over-year) growth of about 14.5%. Prolia is expected to pose tough competition to Novartis’s (NVS) Reclast, Merck’s (MRK) Fosamax, and Eli Lilly’s (LLY) Elista.

Romosozumab research program

On February 21, 2016, Amgen and UCB announced positive data from the Phase 3 clinical trials for the investigational bone health drug Romosozumab, which aims to reduce the probability of primary vertebral fractures in postmenopausal women with osteoporosis.

The study also managed to establish the efficacy of the drug in reducing symptomatic vertebral fractures as well as non-vertebral fractures. This is considered an important result in negotiating with payers for reimbursement as well as while promoting the drug to physicians and patients. According to a recent press release by Amgen, non-vertebral fractures involve “fractures outside of the spine, excluding sites that are not considered osteoporotic, fractures due to high trauma or pathologic fractures.”

Positive Phase 3 results

On March 21, 2016, both companies also announced positive Phase 3 results demonstrating the use of Romosozumab for treating men with osteoporosis. (For more on these clinical trials, please refer to “Romosozumab: Will It Benefit Amgen in the Future?“)

If Romosozumab is approved by the regulatory bodies, it could boost Amgen’s share price as well as that of the iShares Core S&P 500 ETF (IVV). Amgen makes up about 0.65% of IVV’s total portfolio holdings.

In the next part, we’ll explore Amgen’s strategy for its cardiovascular franchise in 2016.

Continue to Next Part

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