Chief Financial Officer David Meline said the decision was made in order to provide the financial support to areas that will provide long-term growth for the company.
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Amgen Chief Executive Officer Robert Bradway sees a bright future for the company as many of its inflammation and cardiovascular drugs posted double-digit earnings in the most recent quarter. Moving forward though, the company will be closing out the bulk of its neuroscience programs in favor of long-term growth areas.
In its quarterly report, Amgen posted double-digit growth in several of its branded products, including Prolia, Repatha, Aimovig, Kyprolis and Blyncito. Additionally, Bradway pointed to strong growth in Amgen’s biosimilar product line as a sign of future strength. In a call with investors and analysts, Bradway said these “bode well” for the company’s long-term outlook. Despite Bradway’s sunny outlook and the growth in those drugs, Amgen saw a 3% decrease in total revenues to $5.7 billion for the third quarter in comparison to the same quarter in 2018. The company said that decrease reflects the impact of generic competition against some of its key products.
Despite that growth, Amgen said it was forced to make some changes to its R&D programming. Like many other companies, it is opting to close out its neuroscience research. Chief Financial Officer David Meline said the decision was made in order to provide the financial support to areas that will provide long-term growth for the company. And that long-term growth has not come from neuroscience drugs.
“In careful evaluation of our pipeline and the challenges inherent in developing drugs for major neurologic diseases, we have made the decision to end our neuroscience research and early development programs with the exception of programs centered on neuroinflammation that will be pursued by our inflammation TA,” Meline said, according to call transcripts on Seeking Alpha.
One bright spot in neuroscience has been the company’s migraine treatments. Meline pointed to Aimovig, which he said is making a “meaningful impact on the lives of migraine patients around the world.” Amgen will continue to support its Aimovig program, including ongoing clinical development programs. At the same time, Meline said the company is “exploring other models” to capitalize on Amgen’s genetics capabilities. He said the company will provide guidance on those efforts, as well as broader effort in neuroscience in the future.
In a Q&A with analysts, Meline added that the company is looking at targeting diseases with a large public health impact and much of the neuroscience R&D landscape is focused on “orphan or niches diseases.” He reiterated that the company will look at ways to maintain a hand in neuroscience, which will likely be through its genetics program.
Chiming in on the conversation, Bradway said the company’s primary focus will be in cardiovascular disease, inflammatory disease and oncology, of course.
“So those are the areas that we’re focused on and expect to be successful advancing molecules in those areas over the coming years,” Bradway said.
As the neuroscience programs wind down, Murdo Gordon, Amgen’s head of global commercial operations, said the company is substantially investing in the company’s inflammation portfolio. He said that line has been boosted by its biosimilars of Amgevita and Remicade, the reaffirmation of Enbrel’s intellectual property and the pending addition of the psoriatic arthritis drug Otezla, which is expected to close in the fourth quarter. Also, Gordon said the company sees potential in tezepelumab for asthma, as well as a number of other assets that are earlier in the R&D pipeline.
During the call with investors, Bradway pointed to the changing landscape for drugmakers in the United States as there is growing political pressure to curb pricing trends for prescription drugs, including tying those covered by government health programs to an international pricing index. He said the company sees promise in the overseas market, which was reflected in a 15% revenue growth and 23 volume from foreign sources.
“We expect this to become an important market for us through time, just as we can now see Japan emerging as an important new opportunity for us... We think our portfolio of products is well suited to the needs of an aging population in China and Japan, in particular,” Bradway said.
