Established in 1980, Amgen is one of the most successful biotechnology firms to have emerged from the heady days when scientists began to commercialise on some of the laboratory breakthroughs that followed the discovery and sequencing of DNA. Where other biotech companies were set up by the scientists themselves, however, Amgen was created by both scientists and experienced venture capitalists.
The result was a scientist’s dream. Founder William (Bill) Bowes, whose mother was a doctor, had a vision of using biotechnologies to relieve human suffering, and he began putting together a Scientific Advisory Board comprised of some of the leading names in molecular biology and genetics. Then, while the businessmen took care of raising finance and setting up shop, the researchers were given access to the expertise and equipment they needed to pursue pioneering investigations into the causes of serious illness.
It was not an easy ride for early investors. It took three years for the company to achieve its first laboratory breakthrough and another six years, plus three more injections of cash, before its first product, Epogen, received FDA approval and started to be sold in 1989. The rewards, however, have been impressive. By 1992 Amgen sales already exceeded $1bn and the company, through acquisition and further product development, has built a current market capitalisation of $49.5bn.
Pure innovation
Amgen remains the world’s leading independent biotechnology company, and according to Dere, Amgen International’s Chief Medical Officer, that autonomy is an important factor in the firm’s ability to be first in class with the treatments they develop. “Our independence allows us to shape our own future with respect to choosing what to focus on and how much resource to devote to research and development,” he says. “We currently spend nearly 20 percent of our revenue on R&D, which is higher than many other large pharma companies.”
The size of Amgen’s R&D budget reflects the company’s strategic objective of being first-in-class wherever possible. That means bringing the first drug onto the market that works through a specific or new mechanism of action. Finding those mechanisms and developing those drugs without antecedent requires true innovation.
Epogen was a perfect example. Developed as a result of Amgen scientist, Fu-Kuen Lin’s successful cloning of an original protein chain, the drug works by stimulating the body’s own production of red blood cells. The results have transformed medical practice, along with the lives of millions of people suffering the ill effects of anaemia. “Those of us who trained in medicine before Epogen came on the market remember the devastating effects of low haemoglobin on dialysis patients,” Dere recalls. “The fatigue is terrible and debilitating. Either patients were not treated, or received transfusions which had its own risks. By stimulating the body’s ability to produce its own red blood cells rather than just trying to replace them from the outside, Epogen has had a major impact on how we can help these patients.”
Another Amgen first was Neupogen, and its successor, Neulasta, introduced in 2001/2. These are immunostimulators which can be used to stimulate the bone marrow to produce more white blood cells needed in the fight against infection. This is particularly important for patients with depressed immune system functioning, such as those undergoing chemotherapy treatment against cancer. A low white blood cell count can place patients at risk for severe infections and interruptions in cancer treatment. The use of Neulasta boosts white blood cells, enabling patients to stick to their planned chemotherapy schedule. Being first in class is not without its risks, but the Amgen structure and a culture of seamless integration between the scientific and commercial functions in the business has helped to keep it focused and profitable. “A lot of companies will tell you that their commercial and R&D guys talk to each other, but at Amgen we have a real understanding of each other’s worlds and that understanding is engrained throughout our culture,” comments Dere. Research priorities are set at monthly meetings of a cross-functional team of senior executives, based on their assessment of the emerging research data, the probability of success, what the competition is doing and where the available budget for product development will have the greatest impact.
The result has been a research pipeline that has not only tripled in size since 2001 but is winning awards. For three years in a row, Amgen’s pipeline was named “Best Biotechnology Pipeline” by R&D Directions and Med Ad News. In 2009, Scripnews.com, the leading online global pharma and biotech news and analysis service, gave Amgen its Best Overall Pipeline award in recognition of the size, quality, novelty and market potential of the company’s pipeline. “The industry mean for innovation in research pipelines was about 40 – 50 percent,” notes Dere. “Amgen is at about 70 percent innovation.”
Guidelines
There are no blank cheques, however. The company maintains its R&D focus on four broad therapeutic areas: haematology and oncology; inflammatory disorders such as rheumatoid arthritis and psoriasis; metabolism, where there is a major focus on bone disease; and neuro-sciences, including investigations into the sources of schizophrenia and degenerative disorders like Alzheimers.
Still a relatively young company within the industry, Amgen is fortunate to have a group of experienced scientists dedicated to what they call “drug hunting” , that is discovering molecules which are potentially relevant to human disease by understanding important biological pathways. And they don’t just look in their own laboratories for these discoveries. The company is open to research input from a wide variety of sources, currently maintaining around 100 collaborations with scientists in universities and other research organisations around the world. “Our goal,” says Dere, “is not to have a pipeline that says everything has been discovered inside Amgen. Our goal is actually to find the best molecules to achieve the therapeutic results.”
The company also takes the unique approach of using whatever therapeutic modality provides the best balance of efficacy and safety. In lay terms, this means that a company essentially set up to work with large molecules (biologically active compounds), will also use small molecules (generally chemistry-based) if that will achieve the desired results.
Modality independence is important because it allows Amgen’s scientist to focus on the disease process, identify the most important targets and then select the best tool for the task, be it large-molecule, biologic, antibody, peptibody or small-molecule therapy.
And finally, Amgen moves quickly. “A lot of the big pharma companies spend a considerable amount of pre-clinical time on animal models,” Dere notes. “What we’re finding is that animal models are actually not that predictive, so we move into human studies as soon as it is safe to do so.” They’re also quick to pull the plug. “Being truly innovative means that many lines of investigation are not going to work. In this industry, success can be making the discovery that you failed as quickly as possible so you can move on to something else.”
Changing practices
Having established itself as a successful developer and manufacturer of innovative pharmaceutical treatments, Amgen is now turning its attention to increasing its international market presence. Over the last five years, the number of countries where Amgen medicines are available has increased from 22 to 46, but the US remains its largest market with 72 percent of total revenue. Europe is a large target market for the company, but also parts of northern Africa, South Africa, and the Middle East. The biggest areas in terms of unmet medical need are emerging markets such as Mexico, Brazil, Turkey, China, India, Russia and South Korea.
The challenges of gaining access to each new market can be daunting. In addition to establishing delivery logistics, there are the challenges of establishing and monitoring clinical research affiliates, identifying and building relationships with leaders in the local medical community, gaining regulatory approval, and then agreeing reimbursement with government health agencies once approval has been given. Finally, there is the challenge of convincing local practitioners of the treatment’s efficacy so that patients benefit as early as possible.
Meanwhile, Amgen continues to innovate. The company’s newest drug, Prolia, is already achieving recognition (it was listed as one of Time magazine’s Top 10 Medical Breakthroughs of 2009) and changing the future for osteoporosis sufferers by slowing down the formation, activity, and survival of osteoclast cells which have been found to be responsible for the breakdown of bone. “Studies have shown that at least 40 percent of women in Western Europe and the US will suffer some sort of osteoporotic fracture in their lives,” says Dere.
“Despite the availability of 7 or 8 drugs on the market, that percentage hasn’t changed in the past fifteen years.
“My expectation is that the availability of Prolia, which works by a new mechanism of action, will change practice so that the burden of illness goes down significantly.” Just another typical day for the scientists at Amgen.
