Beauties and The Beast at the LPGA's Ginn Open

USS Amgen taking on water under Captain Kevin

The cat is FINALLY out of the bag, so to speak, and the sacred cow is in the process of being slaughtered.

I am almost GIDDY with Schadenfreude that this highly-anointed organization that has rested on its bloated laurels for the last ten years is FINALLY getting its comeuppance, and the collective scales that have covered the business press' eyes are beginning to fall away...

Today's NEW YORK TIMES article from Andrew Pollack was a welcome breath of fresh air, and to do it justice, I've decided to thread my responses in amongst the pithy points that Mr. Pollack raises, along with prominent biotechnology analysts and interested parties.

THIS is gonna be fun! {THESE ARE ALL ONLY MY HUMBLE OPINIONS, BY THE WAY} - this is all for FUN, and for LAUGHS ONLY - your mileage may vary & past returns may not be indicative of future performance (truer words were never spoken, by the way) ...
Mr. Pollack must have been channeling in the Spring and Summer of 2002, and after FIVE long years of simmering in bile, produced this outpouring of revelations that captures what I've been feeling..so thank you, Mr. Pollack - your efforts are welcome, AND appreciated...on to the flogging and excoriation...

Amgen receives a dose of troubleBiotechnology whiz suffers setbacks with two blockbuster drugs

BY ANDREW POLLACK, The New York Times
Last Updated:04/12/2007 09:14:33 PM PDT

Just three months ago, Amgen was still considered one of the biggest success stories of the fast-growing biotechnology industry. Now some analysts are comparing it to a lumbering, stumbling pharmaceutical giant that leans too heavily on an aging product portfolio.

{"Some analysts" have finally come to their senses to recognize this organization for what it is...it IS a lumbering, stumbling, DYSFUNCTIONAL organization that has not discovered MUCH OF ANYTHING NEW of significant commercial value since 1991 when NEUPOGEN was introduced. More later...read this BusinessWeek article from 2002 for some serious perspective on the background...}

A series of setbacks, some unexpected and some perhaps self-inflicted, pose the greatest challenge in the company's heretofore charmed 27-year history.

{In reality, there's not much unexpected, but there are MANY self-inflicted setbacks, caused primarily by an organizational culture that pays more attention to the valuation of their stock option grants and pressing their own personal and political agendas, than building a business that has some staying power with a viable product pipeline. The middle management level in the Sales and Marketing area was characterized by political grandstanding and backbiting, as Amgen has aggressively hired "the best and the brightest" from "big pharma", and then turns them loose on one another in a Darwinian power struggle to press each manager's personal political agenda without coordinating the internal dynamics that are required to successfully develop and market a viable product pipeline. (Whew, THAT felt good...) This is an organizational structure that can be described as ARROGANT HUBRIS."}

And some crucial events in coming weeks could make clearer whether the company has simply hit a stretch of "choppy water" - as its chief executive contends - or whether, as some analysts say, the company's best days may be behind it.

{In my opinion, the company hit "choppy water" the day it gave Captain Kevin the keys to the good ship Amgen, and the best days ended almost TEN YEARS ago - remember this old saw? The critical lack of management integration and guiding lower level management to "play nice" in the sandbox with one another is one of the most glaring leadership failures of this once-fine organization. One of Amgen's core values is "Compete intensely and win"...although someone forgot to add "with the outside world" after intensely... Arrogant hubris? Look no further...}

"The barrage of bad news that's come out on Amgen in the past 60 days is absolutely unprecedented in the biotech sector," said Mark Schoenebaum, a biotechnology stock analyst at Bear Stearns. Amgen's shares are down nearly 20 percent since late January, knocking about $20 billion off the company's market value. But the stock has edged up a bit since its recent low of $55.13 on March 29, as some investors have apparently adopted management's view that it is too soon for a fire sale.

{Those investors are the same ones who beat their chests loudly and trumpet that "Amgen is the bellwether of the biotech industry" and "Amgen is a world-class organization".... they might have been in the early to mid '90's, but since 1998 this organization has become a bloated, wasteful whale rotting on the beach, and the stench has finally blown downwind to the rest of the world.}

"We are not in a crisis, that's for sure," Kevin W. Sharer, Amgen's chairman and chief executive, said in an interview.

In a crisis, "people don't know what to do," he said. "People's hair is on fire. Confidence is challenged. We're not there."

{You SHOULD be...seven YEARS ago...}

Rather, he said, "we're in some pretty choppy water." {So was the Titanic, Captain..}

{No, Captain- confidence is one thing that you definitely do not lack....the management strategy of wringing every last drop of Medicare billing and product line extension from your tired EPOGEN and NEUPOGEN franchises is being shown to be the proverbial "fart in church"...ARANESP and NEULASTA are a patent attorney's strategy to exploit a loophole in FDA filing rules by modifying the original chemical compound with an additional sugar molecule to delay the decay of the compound's metabolism by extending its dosage...it's a tired strategy that was brought on to delay the lack of discovery by the R&D department, and the sand's running out of that hourglass...how's that statue of Custer, by the way???}

The biggest waves are several recent studies suggesting that the company's blockbuster anemia drugs, Aranesp and Epogen, might be harming patients, particularly if overused. Those products accounted for $6.6 billion of Amgen's $14.3 billion in revenue last year.

{Another ineffective strategy - search far and wide to identify new uses beyond the initial indication in anemia patients. The dialysis center and hospital channels are played out, so let's find new indications for the product....OOPS....THAT wasn't supposed to happen....bummer...NOW what do we do??? Dust off the Spin-Machine 5000....again...}

The Food and Drug Administration put new warnings on the drugs last month, citing studies suggesting that Aranesp and Epogen might cause heart problems or hasten the death of cancer patients.

{Maybe that's because that's not what the product was designed to do??? Maybe that's because the crew pursued that strategy to keep the billing pipelines full by expanding their product indications while they tried to buy time and actually DISCOVER something marketable in the lab??? Maybe they've run out of time, and the gamble didn't work???}

On Wednesday, the company said it would briefly delay the reporting of its first-quarter results, originally scheduled for next week, to allow it to include data from a clinical trial of Aranesp. The financial results are now expected April 23.

{More buying of time to spin the results...that should be a MEMORABLE day, to say the least...}

Late Tuesday, Amgen said that its chief financial officer, Richard D. Nanula, was resigning to "pursue other opportunities," but would stay on for three months to effect a transition. It also said that Robert Bradway would succeed him as the finance chief. Adding to its woes, Amgen recently reported that patients in a clinical trial combining its new colon cancer drug, Vectibix, with other treatments were more likely to die than patients who got only the other treatments. As a result, Vectibix is likely to remain only a niche drug for now.

{Ahhh...SOMEONE'S gotta take the fall...so it might as well be the creative, financing CFO from Mauschwitz, you know, the one who took on all the debt back in '02 to buy back stock so we could prop up the EPS figures....SOMEONE needs to pay, right??? And ANOTHER product that goes pffffft???
Biotech ain't easy, folks, and past successes have blinded some people to the realities that "blockbuster" products don't just fall from Heaven...you hit it big, once upon a time...}

Sizing up Amgen's situation in a report titled "Looking More Like Large Pharma," a Citigroup analyst, Yaron Werber, has predicted that Amgen's revenues will grow only 4 percent a year through 2010. That would be well below its 20 percent annual sales growth from 2003 to 2006.

{Finally, someone who's willing to call it like it really IS, and has been...if not for the aggressive marketing of expanding the two tired product franchises beyond their originally intended indications, this slowing revenue growth was becoming apparent 5-7 years ago...the 20 percent growth was under the Binder regime...that ended in May 2000. It should have been obvious, but who knew???}

The company has mainly reacted to the mounting uncertainty about future sales by taking cost-control steps like a hiring slowdown and postponing the opening of a new factory in Ireland. If sales drop further, Amgen says, more cuts can be made. {I'll BET they can...but probably NOT where they SHOULD be made...}
{Exactly what DO all those people do??? Under the current regime, Amgen's headcount has expanded SIGNIFICANTLY, and capital projects have also expanded, with at least four new mid-rise executive and administrative buildings on the sprawling Thousand Oaks campus...seems to me that many of those beautiful new homes in Dos Vientos might be coming up for sale in the next few months....of course, the Captain will keep his salary and bonus structure intact...but I also hope that JM & HI both experience THEIR time in the unemployment line, ....you slimy, pompous M*F*'s...it would only be fair...}

Results due in May

Just how painful should become clearer in the next few weeks. By early May, the company is expected to release the results of a crucial study testing Aranesp's effect on the longevity of patients with small-cell lung cancer. Aranesp is approved to treat the anemia caused by cancer chemotherapy.

If the May results indicate that patients taking Aranesp are more likely to die sooner than they might otherwise, "the tide will turn" against the drugs, said Dr. John A. Glaspy, a professor of medicine at UCLA.

{If I were a betting individual, I'd get my clam-diggers out...}

"We will not be able to justify treating lots of patients" with Aranesp, said Glaspy, who has received consulting and research fees from Amgen.

{Uh, Doc, do I hear those "consulting and research fees" drying up, and wallets slamming shut in the background???}

An FDA advisory committee plans to meet May 10 to discuss the safety of the anemia drugs. And later that month another big drugmaker, Roche, might win FDA approval for an anemia drug that would compete with Amgen's products.

(Ahhh...competition...better handled in court than in the marketplace ...it's in this organization's DNA...ever since they hitched their wagon to J&J's star, this organization's tagline as "a law firm with a biotech company attached" has been played out over and over...}

Epogen and Aranesp are both genetically engineered versions of erythropoietin, or EPO, a protein made in the kidneys to stimulate production of oxygen-carrying red blood cells. Johnson & Johnson sells a version of Epogen, marketed as Procrit, under a license from Amgen.

The drugs have been shown to reduce the need for blood transfusions in patients with kidney disease and in cancer patients getting chemotherapy.

But in November, a study found that patients with kidney failure who were treated aggressively with an EPO drug had more deaths and heart problems than patients who took only enough of the drugs to raise their levels of red blood cells by more modest amounts.

{Let's think about this LOGICALLY, SHALL WE...if a product intended to stimulate red-cell production is administered to people with cancer cells, doesn't it logically follow that the cancer cells will probably be STIMULATED as well??? You don't need a PhD in Molecular Biology to figure THAT out, but in their never-ending quest to milk the EPO cash cow as long as possible while they've struggled to discover ANYTHING novel, they've reached pretty far and wide to try and find SOME new indication that will turn the "blockbuster" billing tap back on....they've gambled on a risky strategy, and it appears that a strategic blunder has been made...it'll be REALLY interesting to see how they spin those Danish results on April 23....}

Then a number of studies came out suggesting that use of Aranesp by cancer patients could worsen their disease or hasten their deaths.

(Ya THINK???}

Amgen did not immediately disclose the results of one of the trials, done by Danish researchers, prompting an inquiry by the Securities and Exchange Commission.

{Naughty naughty....THAT'S where the arrogance and hubris undoes them...now we're fighting a war on TWO fronts....science AND business/regulatory...}

Amgen executives, and some outside scientists, say it is still far from clear if the drugs are truly dangerous. Most of the studies showing risks have problems in their methodology or have not yet been published. {Of course they do...Amgen ALWAYS does everything perfectly...they're the bellwhether of the biotech industry...didn't you know that???} The risks also seem to be mainly in patients whose red-cell counts are raised beyond the level recommended by the drugs' labels.

{But isn't that the product strategy??? Encourage MORE usage of EPOGEN/ARANESP??? How else can you keep the billing tap turned on???}

New products key

Whatever happens with sales of its anemia drugs, if Amgen is to remain a fast-growing company it must develop new products. But it has yet to show a particular skill in that area, even though it does have many test drugs in its pipeline.

{Welcome to Achilles' heel...or Amgen's hell....memorize those words: "yet to show a particular skill"}

To this day, Amgen still largely lives off Epogen, first approved in 1989, and Neupogen, a drug approved in 1991 that prevents infections in patients receiving chemotherapy.

Its biggest new products since then, Aranesp and Neulasta, were modifications of the original two. And its other big product, the rheumatoid arthritis drug Enbrel, was not homegrown but came as part of the company's $10 billion acquisition of Immunex in 2002.

{Add a benign sugar molecule compound to the original compound to qualify the product legally as a new product, reset the patent clock, ratchet up the marketing machine, and turn the patent exclusivity billing tap back on ....it's a derivative of the "Big Pharma" strategy...

Like Janet Jackson sang so eloquently "What have you done for me lately" (to earn your high P/E and bloated market cap)???

They overpaid for Immunex, RN engineered some financial fancy steps, they stalled as long as they could, but it appears that they've apparently run out of time, and banked on a strategy that turned sour on them...poor babies...}

After being promoted to chief executive in 2000, Sharer recruited Roger M. Perlmutter from Merck to run research and development. The research effort has roughly tripled since 2002, to more than 6,000 people and $3.4 billion in spending, and the number of drug candidates under development has similarly soared.

Denosumab, a drug for osteoporosis and bone cancer, could be a blockbuster, and some investors say that it is now more important than ever to Amgen's future. But it will be two or three years before it is known whether the drug is safe and effective enough to win approval.

{And in the meantime???...the current strategy appears to have backfired...stay tuned to find out if the captain of the ship can successfully navigate "the choppy water" that he's navigated them into.......meanwhile, BAIL like crazy...}

Chinese wheat gluten - Imagine that....

Western profit-whores + Chinese ethical lapses = DEAD AMERICAN PETS

"...only a middleman".... yeah, RIGHT!!!! And these people are our trading partners, HUH? And there's pressure to make them MORE prominent in our global trading scheme????

We as a nation are SUNK if we offshore our food supply to China/India or any other area that does not share American standards and values, whatever THOSE are...(profit at any cost???) And this from someone who thinks of himself as a relatively conservative Republican??? If we continue down this path, we as a nation ARE screwed!!!

Here are the details from the New York Times' David Barboza:
"

"Chinese company focus of pet probe

Answers sought on contamination

BY DAVID BARBOZA, The New York Times

Article Last Updated:04/11/2007 09:07:46 PM PDT

XUZHOU, China - Behind an unmarked gate in this booming city well north of Shanghai lies a large building at the heart of an investigation over tainted pet food that has killed at least 16 cats and dogs in the United States, sickened 12,000 and prompted a nationwide recall. This is the property of the Xuzhou Anying Biologic Technology Development Co., a small agricultural products business investigators have identified as the source of contaminated wheat gluten that was shipped to a major pet food supplier in the United States. Some American regulators suspect there was deliberate mixing of substances. They are looking into the possibility that melamine, the chemical linked to the pets' deaths, was mixed into the wheat gluten in China as a way to bolster the protein content, according to a person who was briefed on the investigation. Though American and Chinese regulators are searching for answers, local residents and workers are unwittingly providing clues about how the pet food supply may have become contaminated. The case is also exposing some of the enormous challenges confronting the global marketplace as China becomes a worldwide supplier of agricultural products. There are strong indications that Xuzhou Anying, a company whose main office seems to consist of just two rooms and an adjoining warehouse here, possessed substantial supplies of melamine and even sought to buy quantities of it over the Internet. If melamine was intentionally blended into the wheat gluten, the findings could become a vast setback for agricultural trade between the United States and China, a country known for lax food-safety regulations. Stephen Sundlof, director of the Center for Veterinary Medicine at the Food and Drug Administration, said at a news conference last week that the agency had found unusually high concentrations of melamine in some batches of wheat gluten, as much as 6.6 percent. Xuzhou Anying, though, has tried to distance itself from the pet food recall in the United States, saying it does not manufacture or export wheat gluten and acts only as a middleman trading in agricultural goods and chemicals. In a telephone interview last week, the company's manager, Mao Lijun, said he had no idea how wheat gluten with his company's label ended up in the United States or how melamine, a chemical commonly used to make plastics, fertilizer and fire retardant, was mixed into a product that was eventually shipped there. Though some American scientists still question whether melamine is toxic enough to kill pets, the chemical is not approved for use in human or pet food in the United States. The FDA says it may have led to kidney failure in some pets. Here in Xuzhou, a metropolitan region of about 1.6 million, Mao turned away visitors to his office, declaring that he had nothing more to say on the matter. But there are indications that Xuzhou Anying has manufacturing facilities in this area and also had access to melamine, which is sometimes used as a fertilizer in Asia. For instance, in recent months Xuzhou Anying has posted several requests on Web trading sites seeking to purchase large quantities of melamine.. Chinese regulators say they are now carrying out a nationwide inspection of wheat gluten supplies. American regulators have banned all wheat gluten from China, but there has been no recall so far in China of wheat gluten made by Xuzhou Anying, though the company's wheat gluten could be used to make bread, bakery and other food items."