A month ago, Amgen ($AMGN) and AstraZeneca ($AZN) were confidently rolling up data from three highly touted late-stage studies on the psoriasis drug brodalumab for a new drug application that was widely viewed as a shoo-in at the FDA. But late Friday evening, as the industry was heading out for a long Memorial Day weekend, Amgen abruptly said it was pulling out of the long-running collaboration on the high-profile IL-17 program after evaluating the likely commercial impact it would face in light of the suicidal thoughts some patients reported during the studies.
"During our preparation process for regulatory submissions, we came to believe that labeling requirements likely would limit the appropriate patient population for brodalumab," said Amgen R&D chief Sean Harper in a statement. AstraZeneca, which paid $50 million and shouldered the lion's share of the R&D costs to partner with Amgen three years ago, was left holding the damaged goods as it said separately that R&D execs would now think through what the future could hold for the drug.
Amgen's shares slipped 1.2% in premarket trading on Tuesday, while AstraZeneca's stock was down 1.6%.
Suicidal thoughts, along with depression and anxiety, aren't unusual in the patient population suffering from psoriasis. Just a few weeks ago, in its latest 10-Q, Amgen downplayed the suicides and suicidal thinking--or ideation--that investigators observed during clinical studies of brodalumab. In connection with a recent presentation, Amgen remarked, "we noted that we have seen suicidal ideation and completed suicides in our brodalumab program but that we believe the evidence to date does not suggest a causal association between IL-17 inhibition and suicidal ideation and behavior."
The sudden turn of events marks a clear setback at a critical and vulnerable stage for both big companies. Amgen has been struggling to pull off a badly needed string of new drug approvals. The Big Biotech recently won a positive FDA committee vote for its cancer drug T-Vec, while Corlanor (ivabradine) was approved as a new heart therapy in April. But T-Vec is likely to face some painful market restrictions while Corlanor is expected to be swiftly bypassed by Novartis' ($NVS) big blockbuster hopeful LCZ696. And brodalumab had been painted as a possible blockbuster by AstraZeneca, which projected up to $1.5 billion a year in revenue, a figure that was ruled modest by a number of analysts looking for closer to $2 billion in revenue as Stelara managed big annual increases of its own in the field.
AstraZeneca made its big role in brodalumab's development a key exhibit in its case that the company has successfully mounted a comeback in the last few years, a bullish self-appraisal that helped shake off Pfizer ($PFE) CEO Ian Read, who made a failed attempt at a megamerger. Now AstraZeneca is faced with more bad news after a new warning that SGLT2 diabetes meds spurred by cases of ketoacidosis cast a shadow on the future of Farxiga.
Barclays analyst Simon Mather marked the reversal down as a black eye for AstraZeneca, prompting him to dump estimated peak sales of $880 million from his forecasts while raising fresh doubts about the pharma giant's pipeline rescue strategy. "Amgen's decision to terminate the brodalumab collaboration does little to increase confidence in AZN's pipeline aspirations," Mather noted, according to a report in Bloomberg.
AstraZeneca would face some stiff competition if it decides to move forward solo on the drug. Novartis is already well in front with its IL-17 program for secukinumab, approved in January as Cosentyx. Eli Lilly ($LLY) has also been racking up positive late-stage studies for its IL-17-blocking ixekizumab, trailed by Merck's ($MRK) MK-3222 and Johnson & Johnson's ($JNJ) IL-23 inhibitor guselkumab.
Amgen's abrupt exit from the deal with AstraZeneca also offers the industry another lesson in caution. The case for brodalumab looked convincing yesterday. Today its future is in doubt, another example of how any drug development program can blow up without a moment's notice.