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Author: walkingshadow One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5774  
Subject: Re: a little more on abaralex Date: 5/23/1999 2:26 PM
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I couldn't begin to tell you what abx will do to the market, but people smarter than me believe it
will be the best therapy for metastatic prostate cancer, and it can be used for endometriosis and i
personally believe it can have infertility uses also.

in order to truly come up with the theoretical market share we are after, we would need to also
figure out sales of other competitors...such as nilandrone, lupron, des, and orchiectomy (yes
virginia, castration is the most common treatment of prostate cancer that has spread).

of course once we figure all this out, it doesn't mean the medical community will switch because a
new treatment is marginally better. if the new drug is too expensive, who will pay for it? i don't
know the answer to this question, but there is much solace to be obtained if a drug is going after a
large potential market...from the brief bit of info i have provided, it looks like we do have a
substantial market to go after. I would love for anyone to tell me if they agree with me and also to
further (and one up) my work by figuring out how many men get diagnosed with stage d prostate
cancer yearly (that describes spread to bones) and by figuring out sales of lupron yearly.

as usual, gallery comments are loved!

Goruck--

Thank you for the insightful post. I have a "gallery comment":

Just because a drug is a superior treatment does not mean it will be adopted by the medical community at large. There are increasing fiscal constraints by reimbursement providers on the medical profession which limit their options. For example, drugs which dissolve clots that cause heart attacks and strokes (e.g., tPA) are more expensive than older generation drugs (e.g., streptokinase and urokinase), and many institutions mandate that the older generation drugs be used because they feel that the advantages offered by the newer therapy does not justify their much higher costs.
But, having said that, there is also a counterbalancing pressure exerted on the "powers that be" that institute cost containment procedures, and that is the need to "keep up with the Jones'" (so to speak). No hospital wants to have a reputation for delivering substandard or out of date treatment; they know that that is a good way to lose customers, particularly those who have serious health problems. And physicians naturally want to utilize newer, improved treatment options once research demonstrates their effectiveness. And physicians (at least in academic centers) closely monitor developments in their field, and these developments most often come from academic centers. Here, I believe, is where marketing can become a powerful force. If a company can communicate to physicians AND to the general lay community that they sell a product which is a significant advance in the treatment of a common disease, then both will tend to demand that treatment.

So how might all this be relevant to Amgen? Among those working in academic medicine (i.e., those largely responsible for medical developments), Amgen is widely considered to be a top-notch research organization, a kind of "think tank" for idea development. For example, research on one of their products which is early in the pipeline (osteoprotegerin) was considered to be of such importance that it merited several publications in the most prestigious and influential journal in science (Cell) as well as several other lesser but highly respected journals. This is an amazing feat, and testimony to the quality of R&D being done at Amgen. But basic bench research is of little economic value unless it can be applied. IMHO, molecular and cellular biologists have, as a class, distinguished themselves by personifying a curious blending of brilliant research work with an extremely limited ability to apply their own results. The best example of this I know is the Nobel prize winner, Kerry Mullis, who discovered the breakthrough PCR technology, yet sold the rights for a song, and someone else with far more vision made a fortune on it. This is to me understandable, because this type of work almost requires tunnel vision and focus. But scientists at Amgen seem to recognize their limitations along these lines, and so they have developed many collaborative partnerships with those in clinical research; this seems to be increasing.

So the infrastructure for continued development of breakthrough products would appear to be in place at Amgen.

My problem with Amgen is two-fold:

1. Marketing
2. Restricted focus

It seems to me that one of the factors which will cause Amgen to REALLY take off is when it can solidly imprint itself in the minds of both the medical and lay communitities as a source of unparalleled new "wonder drugs." This takes an enormous PR effort, which up until now Amgen has not done an effective job on.

If you look at Amgen's product pipeline in some detail (and any truly long-term investor should do so), you will see that many of the products being developed, while admittedly promising and potential breakthroughs, are directed at relatively narrow segments of the market. There is not one product being developed in cardiovascular medicine, for example. This is where Amgen should turn it's attention. The reason? Sheer market size and demographic trends. The Global Burden of Diseases study published late last year in the prestigious British journal, The Lancet, projects that heart disease will be the number one cause of morbidity and mortality in the entire world within a relatively short time (I think it was 15 years). This is already true for developed countries, and life spans worldwide are increasing because infection (the current number one cause of death in the world) are being increasingly efffectively treated as newer antibiotics find their way into developing countries, and with more effective infection treatment comes increasing life spans and a greater prevalence of diseases which are age-related, particularly coronary heart disease and cerebrovascular disease (stroke).

Happily, this does not appear to be entirely lost on Amgen management. I have spoken with some of the scientists at Amgen, and they indicate that Amgen is taking an increasing interest in cardiovascular disease, but there is currently nothing in their product pipeline in this field.

But, all these musing notwithstanding, IMHO Amgen will continue to be a powerfully innovative force in medicine. Their success will, I believe, be more related to management vision and marketing effectiveness (unknowns to me; anyone have any insight here?). They already have R&D talent, infrastructure, and money to fund product development. For what it's worth, I am planning to invest for the long term.

Sorry for the LONG post, but you got me thinking----frequently a hazardous activity..... <:~o

Walkingshadow
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