Amgen , the world's biggest biotech company in terms of sales (Genentech dwarfs Amgen in market cap: $86 billion vs. $51 billion) and Dow component Johnson & Johnson avoided a worst-case scenario this afternoon. A Food and Drug Administration advisory committee voted 13-1 against recommending their drugs no longer be marketed for chemo-related anemia in cancer patients.
By a vote of 8-6, the panel also said Aranesp, Epogen and Procrit should not be restricted only to use on patients with small cell lung cancer. When those first two votes came in, the stocks--especially AMGN--rallied. But as I pointed out in an alert on CNBC at that time, the companies were not out of the woods yet.
That proved to be the case. The shares started to pull back as the rest of the votes came in. The committee said the drugs shouldn't be used on people who are considered to have potentially curable types of cancer, shouldn't be used on people with metastatic breast and head and neck cancers and that all cancer patients should sign an informed consent form before getting the drugs. According to analysts, those restrictions could hurt sales. There's also the question of what effect, if any, the votes will have on private insurance reimbursement for the drugs.
But the panel stopped short of recommending treatment-level restrictions for oncologists. As one committee member said, "We're approaching the point of silliness. We're trying to overmandate things." The consensus was that the red blood cell threshold should be determined on a case-by-case basis by doctor and patient.