Stockwatch: when less ESA is more
This article was originally published in Scrip
Executive Summary
The FDA's recommendation on lower doses of erythropoiesis-stimulating agents (ESAs) to treat anaemia, announced on the afternoon of 24 June 2011, had investors scurrying for the exits wiping about $830m from Amgen's market capitalisation. In retrospect, this looks like a knee-jerk reaction to the latest in a long line of safety and commercial concerns for the ESA drug class. What may be lost in the admittedly short-term perspective that investors have taken is that regulatory actions and their reinforcement by the medical profession and reimbursement norms also serve to tighten Amgen's grip on the ESA franchise.