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The US Food and Drug Administration (FDA) recently granted approval to Amgen’s (AMGN - Analyst Report) Prolia (denosumab) for an additional indication. Prolia can now be used as a treatment for increasing bone mass in men with osteoporosis at high risk for fracture.

FDA approval for Amgen’s Prolia was based on data from the multicenter, randomized, double-blind, placebo-controlled phase III study (ADAMO ) which compared the efficacy and safety of Prolia (60 mg every six months) to placebo in males with osteoporosis. Results showed that patients in the Prolia arm experienced significantly greater gains at the lumbar spine compared to patients on placebo (5.7% vs. 0.9%).

Prolia is already approved in the US for the treatment of osteoporosis in postmenopausal women at increased risk of fractures or patients who have failed or are intolerant to other osteoporosis treatments. Prolia is also approved for increasing bone mass in women at high risk for fracture receiving adjuvant aromatase inhibitor therapy for breast cancer and increasing bone mass in men at high risk for fracture receiving androgen deprivation therapy for non-metastatic prostate cancer.

Approval for the new indication should boost Prolia sales. About 2 million men in the US have osteoporosis, according to the National Osteoporosis Foundation, with an additional 12 million at risk.

Second quarter 2012 Prolia sales came in at $120 million, up from first quarter 2012 sales of $88 million. Sales were driven by increased segment share as well as growth in the overall skeletal-related events segment. Amgen launched a DTC TV campaign this year which should drive sales further.

Denosumab is also approved under the trade name, Xgeva, for the prevention of skeletal-related events (SREs) in patients with bone metastases from solid tumors.

We currently have a Neutral recommendation on Amgen, which carries a Zacks #3 Rank (short-term ‘Hold’ rating). With several key products expected to lose patent protection in the next few years, Amgen has a lot riding on Prolia/Xgeva’s successful commercialization.

While we are bullish on Prolia/Xgeva, any hiccup, either with respect to delays in gaining approval for additional indications, a miss in any of the ongoing phase III programs, delays in the reimbursement coverage process or safety concerns post-launch, will weigh heavily on the shares. Other products in the osteoporosis market include Merck’s (MRK - Analyst Report) Fosamax and Eli Lilly’s (LLY - Analyst Report) Evista and Forteo.

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