WASHINGTON, Sept. 28 (UPI) -- Analysts expect Amgen's Vectibix, which was approved by the Food and Drug Administration for third-line therapy for colon cancer, to steal significant market share from ImClone's Erbitux.
"We had always thought Vectibix would be a superior agent to Erbitux," Wachovia analyst George Farmer told United Press International. "Now with Vectibix priced at a discount to Erbitux and the reassurance by Amgen that co-pays would be capped, we think Vectibix is going to obtain significant market share."
Amgen is pricing Vectibix, a monoclonal antibody that binds to a protein called epidermal growth factor receptor on cancer cells, at $8,000 per month, 20 percent cheaper than Erbitux. In addition, the company announced the Vectibix Cap program, which limits out-of-pocket expenditures to 5 percent of patients' gross income regardless of whether they have insurance or the amount of their total income.
Vectibix will carry two black-box warnings on labeling for infusion-site reactions and rash, but these side effects appear to be similar to those of Erbitux and shouldn't limit its uptake, Farmer said.
"We're modeling Vectibix will take about 20 percent of Erbitux's market share next year and ultimately I would say 80 percent by 2010," Farmer said.
If Vectibix gets a first-line indication, which Amgen is studying in clinical trials, Farmer projects it could become a blockbuster and a significant contributor to Amgen's bottom line.
Even if Erbitux does lose market share in the colorectal-cancer arena, the drug won't disappear. It is also approved in head and neck cancers, so it will still be used in that setting.
In addition, ImClone may decide to lower the price of Erbitux, which could hurt revenue but enable them to maintain market share, Farmer said.
According to the FDA, the Vectibix approval was supported by a clinical trial involving 463 patients with metastatic cancer of the colon and rectum. The mean time to disease progression or death was 96 days in the Vectibix group compared to 60 days in patients given standard supportive care. Overall survival was similar between the two groups.
Approximately 8 percent of the patients receiving Vectibix also experienced a significant reduction in tumor size.
The most serious adverse events associated with the drug include pulmonary fibrosis, severe skin rash, infusion reactions, vomiting and constipation.
Chris Raymond, an analyst with R.W. Baird, was more bullish on Vectibix's future.
"This is going to be a huge drug, a lot bigger than people think," Raymond told UPI.
He projects Erbitux will generate $300 million in sales next year, increasing up to $918 million in 2009. If the drug is ultimately granted first-line indication, it could rack up sales of $2 billion, he added.
In addition to its lower price, Vectibix has a better safety profile and is more convenient than Erbitux, he said.
ImClone may be able to lower the price of Erbitux, but the company will be unable to counteract "what is probably going to be a very aggressive contracting program" from Amgen of packaging together Vectibix, Aranesp, Neupogen and Neulasta, Raymond said.
"Amgen will likely provide good economic packages to physicians, which will give them a lot of power to displace Erbitux right out of the gate," he said.
Ed Nash, an analyst with Stifel Nicolaus, noted that Vectibix came from Abgenix, which Amgen acquired last year.
"This is just the beginning of additional and continuing approvals from the pipeline that came out of the Abgenix acquisition," Nash told UPI. The next approval expected out of that pipeline is denosumab, which Amgen is developing for postmenopausal osteoporosis as its first indication.
Wall Street will assume Vectibix will ultimately get the indication expansion up to first-line therapy, so all eyes will be turning to denosumab, he said. The company is also pursuing an indication of metastatic bone disease for that drug.
Another interesting aspect about Vectibix is Amgen's ability to price it so low, Nash said.
"This could be the beginning of a new paradigm as we go forward in biotech," he said. Firms may be developing the manufacturing expertise "to produce drugs at a cost that will allow them to undercut the competition and still make a good profit," he said.