In an era of abundant pharma buyouts, small and midsized biotechs may find it increasingly difficult to go their own way, Amgen’s CEO Robert Bradway figures. And new drug cost legislation in the U.S. certainly won’t help, the helmsman added.
Reflecting on the state of the industry in the wake of the Inflation Reduction Act (IRA), Bradway voiced confidence in Amgen’s position during a recent interview with Bloomberg News. But newer companies may have a tougher path to travel, he told the news service.
As one of the world’s top drugmakers—and a true biotech Cinderella story—Amgen boasts a “sustained base” and a “global platform” from which to capitalize on innovation and serve patients, Bradway told Bloomberg. “I think companies that don’t have that are going to find it more difficult,” the Amgen CEO added.
Amgen and Genentech generally came up around the same time. When Genentech went the buyout route with a sale to Swiss drugmaker Roche in 2009, speculation about Amgen’s future followed. Ultimately, though, the company has remained independent.
“The likelihood you can rely on a single or a couple of innovations and build a large company around that—the way many of us in the biotechnology industry did over the last several decades—I think the likelihood of that is greatly diminished by the new legislation,” Bradway said of the new industry landscape.
Bradway’s comments clash with those made by argenx’s CEO Tim Van Hauwermeiren in a recent interview with Fierce Pharma. Speaking on the successful launch of the company’s first drug Vyvgart, Van Hauwermeiren singled out a “whole class” of biotechs seeking to innovate on their own.
“Look at the BioNTechs of this world—the Evotecs, the Genmabs, the Argenxs—they all do it in their own way,” he explained, noting that those companies’ efforts could be “inspiring” for up-and-comers in the field.
Bradway, for his part, said his company and the industry have observed “both price compression and lifecycle compression,” which could pose a “particularly significant challenge” for “some of the smaller companies in the industry that have been less successful.”
As for the IRA writ large, Amgen will “adapt,” Bradway said, though the CEO claimed the legislation is “unfortunate.” He argued the bill will stymie innovation and said that it fails to “address the real challenge for patients in this country,” which he identified as high out-of-pocket costs for medicines.
With small and midsized companies potentially more vulnerable in a post-IRA landscape, Amgen and other Big Pharma players could be looking at a major opportunity to grow from the outside.
As for Amgen’s M&A appetite, the company has traditionally relied on a 50/50 mix of internal and external innovation, Bradway told Bloomberg. The company will continue to hunt for transactions in its bread-and-butter disease areas like cancer, autoimmune disorders and general medicine, the CEO added.
Last year, Amgen pulled down revenues of $26 billion, growing 2% over the sum it brought home in 2020.
Alongside Amgen stalwarts such as Enbrel, Prolia and Neulasta, the company last year snared an FDA approval for Lumakras, a first-in-class drug to treat a certain type of lung cancer once thought undruggable. For all of 2021, the med made $90 million.
Still, Lumakras’ future looked hazy as recently as July. That month, SVB Securities analysts wrote that recent prescription trends didn’t bode well for Lumakras, lowering their second-quarter U.S. sales estimates by 8% to $55 million, below Wall Street’s consensus projection of $62.4 million. Even still, Lumakras ultimately managed to clinch $77 million for the period, growing 24% quarter over quarter.
One Amgen drug that may be headed for rough waters, however, is Otezla. The former Celgene product, which Amgen snagged for $13.4 billion back in 2019, will soon face competition from Bristol Myers Squibb's deucravacitinib.
When BMS acquired Celgene in 2019 for $74 billion, it opted to keep the dermatology and immunology drug in lieu of Otezla. Late last week, the FDA approved deucravacitinib, now dubbed Sotyktu, in moderate to severe plaque psoriasis.
Despite the potential headwinds, Amgen is still “very enthusiastic about Otezla,” Bradway said separately at a recent JP Morgan investor event, as quoted by a company spokesperson. “[W]e have a track record that we expect to be able to build off of through the rest of the patent life for this molecule,” he added.
Otezla has both European and U.S. patents pegged to expire in 2023, Amgen said in its 2021 annual report. Another pair of U.S. patents—covering methods of treatment, plus compounds and compositions—will remain in place until May 2034 and February 2038, respectively.
“[O]ur view remains very upbeat and optimistic about what we can do for psoriasis patients with that oral therapy,” the CEO said of the drug.
Editor’s note: This story has been updated with additional comments from Robert Bradway that were provided by Amgen.