Amgen shares fell on Friday after two of the company's medicines posted disappointing data, including a higher death rate for some cancer patients on its anemia treatment Aranesp.
The findings on Aranesp and colon cancer treatment Vectibix were released late on Thursday, as the world's largest biotechnology company reported a marginal increase in fourth-quarter profit.
Geoffrey Porges, an analyst with Sanford Bernstein, questioned the company's outlook after the report.
"2007 now looks to us like the last of the good years for Amgen, at least for the immediate future," Porges said in a research note, which also cited the "numerous disappointing pipeline updates."
One study focused on Vectibix, which was approved last year for treating advanced colon cancer for patients for whom chemotherapy has failed. The study tested Vectibix with a standard therapy in patients as a first option in an effort to expand Vectibix's market.
However, the patients who added Vectibix showed no improvement compared with the group taking just the standard treatment. Further, data showed an increased incidence of diarrhea, dehydration and infection among those taking Vectibix.
"Investors were probably expecting a positive benefit with Vectibix," Friedman Billings Ramsey analyst Jim Reddoch said in a research note. Reddoch said the data probably will hinder the drug's use among physicians who also use Genentech's Avastin, a lucrative market.
Shares of ImClone Systems, which makes Vectibix-rival Erbitux, rose on Friday. FBR's Reddoch also lifted his rating on ImClone shares to "market perform" from "underperform."
Another study, designed to show Aranesp could reduce the need for transfusions in cancer patients with anemia, found a statistically significant increased risk of death.
Amgen said results of the trial suggest that the risk of taking Aranesp is not warranted for patients with unexplained anemia and active cancer -- those who are not in remission and not receiving chemotherapy.
Analysts said the Aranesp data could raise new concerns about the drug, part of the lucrative class of medicines for which the active ingredient is a natural protein called erythropoietin (EPO) and which treat anemia by boosting the body's production of red blood cells.
Another recent study cast a negative light on Procrit, Johnson & Johnson's own form of EPO.
Bear Stearns analyst Mark Schoenebaum said the data could put 10% of Aranesp's sales at risk, although he doubted the sales would take such a hit.
"These data introduce a new overhang on Amgen shares that, in our opinion, could linger until the Street sees several quarters of healthy Aranesp sales," Schoenebaum said.