AMGEN GETS DRUG OK ARTHRITIS PRODUCT EXPANDS COMPANY'S MARKET REACH.

Byline: Evan Pondel Staff Writer

THOUSAND OAKS - U.S. regulators on Wednesday approved Amgen's rheumatoid arthritis drug Kineret, an integral piece to the biotechnology giant's broadening diversification in this sector.

``Kineret is truly representative of Amgen rounding out their product pipeline,'' said Jennifer Chao, an analyst with Leerink Swann & Co. in Boston.

The announcement comes nearly two months after the Food and Drug Administration approved the Thousand Oaks-based company's anemia drug Aranesp. With two new drugs on the market, the company's poised to channel the funds it spent on research into an aggressive advertising initiative to spark sales.

``This drug will fully establish our commercial presence in the field of rheumatology (the study involved with the diagnosis and treatment of arthritis),'' said Bob Baltera, senior director of product development for Amgen. ``Rheumatology will provide the third leg to the stool.''

While the drug will increase the biotech behemoth's marketing breadth, its true intention is to improve the quality of life for a burgeoning arthritis population. Rheumatoid arthritis affects 1 percent of all Americans, with women 2.5 times as likely to contract the autoimmune disease than men, according to the American College of Rheumatology.

Though Amgen's target audience for Kineret is significantly smaller than for its anemia products, analysts are projecting annual sales to reach $350 million by 2005, compared with about $5 billion in sales related to Aranesp and Epogen, another drug used to treat anemia, said Cory Kasimov, an analyst with Gruntal & Co. in New York.

Currently, Kineret isn't the only drug of its kind on the market. Enbrel, a drug sponsored by The Immunex Corp. and Wyeth-Ayerst Laboratories, was approved in 1998. The drug received warnings issued by the FDA that certain patients taking Enbrel developed infections, including sepsis, a poisoned condition due to the spread of bacteria or other products in the body.

Kineret is for patients at least 18 years of age who have not responded to one or more drugs referred to as DMARDs or disease modifying antirheumatic drugs. The drug is administered via syringe once a day, each dose containing about 0.67 milliliters, or 100 milligrams.

Baltera said because many rheumatoid arthritis patients have severe difficulty moving their hands, Kineret is delivered through a device called SimpleJect.

``That way patients are able to give injections to themselves,'' he said. ``With the device, patients will never see the needle and don't need to have finger dexterity. They need palm dexterity.''

The most common reported adverse reaction expressed in a pool of 2,606 patients was inflammation of the skin around the injected area and an increase in pain, according to Kineret's package insert.

The Arthritis Association and FDA have yet to provide data suggesting the drug's efficacy, although Baltera said ``the proof will be in the pudding'' once the drug garners popularity.

``But, it's not going to be a one trick pony,'' he said. ``We fully expect to develop new therapies down the road.''

That's good news to Chao, as the company will need more products to balance out the success of Aranesp and Epogen.

``Those two drugs have been the bread and butter for the company,'' she said.

The approval of Aranesp was an important move for the company, potentially opening the door to a multibillion-dollar market.

The FDA approved Aranesp for dialysis and predialysis purposes only. However, Amgen has filed an application with the FDA for approval of Aranesp in an oncological setting.

``The company has had some blockbusters this year, and now they're opening up another door,'' Kasimov said.

As the company improves the mobility of arthritis patients, Amgen's financial health remains fairly stable, Kasimov said.

In the third quarter, Amgen's net income increased 5 percent to $330 million, excluding a year-ago gain, or 30 cents a share, compared with $359 million, or 33 cents a share a year earlier.

The company's total third-quarter product sales rose 3.4 percent, to $880 million from $851 million in the third quarter of 2000.

At Wednesday's close, Amgen shares were down 66 cents, or 1.14 percent, to $57.33.