Genzyme shares got an unexpected boost this morning. The Cambridge, MA-based biotech company (NASDAQ: GENZ) climbed more than $1 a share to $69.20 this morning after a rival, Amgen, said it discontinued development of an experimental treatment that had been posing a threat to Genzyme’s kidney drug franchise.
Amgen (NASDAQ: AMGN) made the announcement yesterday in its fourth-quarter earnings report that it was ending development of AMG-223. Amgen paid more than $420 million to obtain the drug in 2007 through the acquisition of Ilypsa, in hopes that it would offer an advance for chronic kidney disease patients who need treatment to control the amount of phosphates circulating in their blood.
Genzyme is a leader in this category, with its sevelamer (marketed as Renagel and Renvela) projected to generate $833 million in sales this year, said Christopher Raymond, an analyst with Robert W. Baird & Co., in a note to clients. The Amgen product was “widely believed” to have an advantage in dosing, as it was designed to taken as one pill at mealtime, instead of three pills per meal as required by the Genzyme drugs, Raymond said. Amgen, when pressed by analysts, wouldn’t really say what went wrong with its contender, but regardless, its demise is good news for Genzyme shareholders.
“This threat was always at the back of our minds,” Raymond said, even though many investors considered it more of a concern in the intermediate to distant future.