Tuesday, February 22, 2000
One of the problems all drug companies face is how to produce
significant new drugs over and over again, year in and year out. In the biotech
space, nowhere is this issue more visible than at Amgen Inc., where the Street
wants continued earnings growth but at times has expressed concern about the
company's efforts to create new products and its relative lack of activity in
the partnering/acquisition area.
The company says it has more going than may meet the eye. AMGN
believes that it has built an industrialized R&D engine based on very deep
knowledge of protein-based discovery, an approach to toolkit technology that
has relied heavily on internal efforts, and a seamless interlinking of research,
development and market-based intelligence to discover, vet and invest in product
In a discussion with BioCentury, CEO-designate Kevin Sharer
and members of the AMGN team described a decision-making process that consciously
assesses the risks of compound development as a product of science, medical
benefit, market, cost of selling and the future environment for a given product.
In keeping with the company's bias toward its internal knowledge
base, it is intently focused on thoroughly maximizing the value of its clinical
and market knowledge in the segments it currently dominates with Epogen erythropoietin
and Neupogen G-CSF, both hematopoietic stem cell stimulating proteins used in
nephrology and oncology settings (see "AMGN's Product Pipeline", A3).
And going forward, AMGN's managers also argued that project
volume will prove to be a less useful metric of performance than the ability
of the company's "intelligence"-based selection process to create a pipeline
that balances risk and market opportunity.
Sharer, who is succeeding retiring Chairman and CEO Gordon
Binder, therefore doesn't foresee major changes at AMGN because the company's
approach is well-articulated and its needs have been identified.
"Gordon and I have really been strategic partners here - we've
worked through this strategy together," said Sharer, who is currently president
and COO. "I don't see any strategic change just because I become CEO."
Nevertheless, AMGN (Thousand Oaks, Calif.) believes that it
will have to succeed at adding small molecule products to its protein base.
It also will have to produce a volume of clinical candidates that would be expected
of an "industrial" drug development company.
Thus, although Sharer argues that the strategy is in place,
he also indicated that he may be looking to fine-tune the company's organization,
which could result in more coordination of the R&D process.
The intelligence factor
The rationale for AMGN's preoccupation with its Epogen and Neupogen franchises lies in the impact both products have had on the company's science, market presence and infrastructure. The AMGN team described the development of NESP (novel erythropoiesis stimulating protein), the company's second generation EPO, as an example.