ARANESP OK COULD PUSH AMGEN AHEAD.

Byline: Evan Pondel Staff Writer

THOUSAND OAKS - Amgen Inc. received federal approval Monday to treat cancer patients with its anemia drug Aranesp, magnifying competition with rival Johnson & Johnson.

Eprex and Procrit, which have completely different structures under a microscope than Aranesp, are also used to treat anemia. And though both drugs are marketed by Johnson & Johnson, reports that Eprex has been linked to a life-threatening condition could still somehow mar the holder of its patent - Amgen.

``But that depends on whether the side effects are a result of how the drug is administered or manufactured,'' said Eric Schmidt, analyst with SG Cowen Securities Inc. in New York.

Johnson & Johnson, which markets Eprex in Europe, said in a letter to doctors last week that it was aware of 141 reports of suspected pure red- blood cell aplasia. The condition occurs when a patient fails to produce red blood cells, the opposite of Eprex's intended function.

So far, Eprex has been found to cause PRCA only among renal-failure patients that have received the drug via an injection, according to Carol Goodrich, a spokeswoman with Ortho Biotech Products LP, a subsidiary of Johnson & Johnson that manufactures the drug. Eprex has been given to more than 1.6 million patients with chronic kidney disease.

Though Schmidt said the occurrence of PRCA is still rare considering the breadth of Eprex's usage, it's certainly worth noting when factoring Aranesp's potential outreach in Europe. It's still too early to tell whether the news surrounding Eprex will spell trouble for Amgen, Schmidt said.

From Amgen's perspective, Eprex doesn't pose any problems for the Thousand Oaks-based company. Because Amgen simply licensed the drug to Johnson & Johnson, the company said, it's free from liability.

``Amgen is not responsible for any of these cases in Europe,'' said Michael Beckerich, a spokesman for Amgen. ``We just gave (Johnson & Johnson) the recipe and told them how to make it.''

While Eprex isn't manufactured by Amgen, the drug's U.S. counterpart, Procrit, is produced by the biotechnology company. Procrit, which is owned by Johnson & Johnson, hasn't been linked to PRCA with the same frequency as Eprex, though. Schmidt said that could wipe away any worries of Amgen being responsible for Eprex's problems.

Amgen's Aranesp is already approved in Europe for kidney-failure anemia. Studies have shown that Aranesp can be administered less frequently than other anemia products on the market. Amgen presented data that showed Aranesp lifting patient blood-oxygen levels with more efficiency than Procrit.

Amgen's and Johnson & Johnson's relationship involving anemia-related drugs dates back to the 1980s. Relations between the two companies have been shaky since Johnson & Johnson acquired rights to Amgen's EPO anemia drug in 1985.

Kurt Kruger, an analyst with Banc of America Securities in San Francisco, said Amgen, then a fledgling biotech company, needed a stronger name to market its products at the time. However, once the company matured, Amgen realized it had given up too much control.

``Ever since then, both companies have been embroiled in litigation,'' Kruger said. ``And the fur is still ready to fly.''

Procrit and Eprex account for roughly 3 percent of Johnson & Johnson's sales, or about $1.3 billion. But, now that Amgen has received approval for Aranesp in an oncological setting, that could narrow Johnson & Johnson's profits from the treatment of kidney-dialysis patients.

``Now, Amgen has its ticket to play in the anemia market,'' said Schmidt, who projects total Aranesp sales of $275 million in 2002, increasing to $600 million in 2003. With more than 800,000 people suffering from chemotherapy-induced anemia, Schmidt said, Amgen's numbers could gain significant ground. ``The tide is certainly shifting,'' he said.

Amgen shares declined 18 cents to close at $35.28, while Johnson & Johnson rose 68 cents to $42.53 Monday.