After the analyst community spent weeks telling clients that the feds wouldn't
hit Amgen Inc.'s EPO business too hard, several analysts jumped on the
downgrade bandwagon Friday morning after a Food and Drug Administration
panel recommended more studies, lower doses and
expanded
warnings on blood-boosting products from Amgen and Johnson & Johnson.
Amgen stock continues to sink — under $55 in morning trading.
Optimists remain. Wachovia Securities LLC maintains its estimates for Aranesp,
which earned $4 billion last year for Amgen, and says hold tight, as does
Robert W. Baird & Co., which is sticking to outperform, despite what
analyst Christopher Raymond called "a confusing and surprisingly negative
panel review."
Remember, the review is only a recommendation. The FDA is not obliged to
follow, as it proved this week when it nixed approval for Dendreon Inc.'s
prostate cancer drug Provenge,
despite
thumbs-up from a review panel in March.
Most analysts don't expect the FDA to reverse course on EPO, though. Among the
downgraders this morning: Citigroup Inc., HSBC plc, Morgan Stanley and
J.P. Morgan Securities Inc. Thomas Weisel Partners LLC analyst Ian Somaiya
told
the AP he expects FDA changes that will "dramatically curb usage" of Aranesp.
Joel Sendek of Lazard downgraded all the way from buy to sell and said he
expects Aranesp sales to drop 21% this year.
—Alex Lash
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