Yesterday's decision by the FDA is a good sign for Amgen. Amgen has so far been a Oncology supportive care company with its lead product Epogen. Which means that the products they have had do not treat cancer, rather they help the patients deal with problems associated with cancer treatments. Despite its multi billion dollar franchise, Amgen has been trying to get into cancer treatments market to expand its influence over the cancer treatments, and also to ensure that it has products beyond the patent expiration of Epogen.
But success of Vectibix is far from certain. Analysts have high hopes for the products given Amgen's decision to price Vectibix about 20% lower than Erbitux. Amgen has also said that it will cover some of the out of pocket costs of the patients who are put on Vectibix. While these are powerful reasons for moving Vectibix usage, don't expect Imclone and Bristol-Myers Squibb to roll over and play dead. Imclone management is already feeling the hot breath of Carl Ichan. Mr. Ichan is likely to make sure that Imclone launches a strong
promotional effort.
So what is Vectibix going to talk about? Well, there is not much there in terms of the efficacy data - both Erbitux and Vectibix are about the same. Amgen is likely to talk up the biggest differentiator of Vectibix - lower infusion reaction rate. Here too the physician experience with Erbitux will likely play a great role in deciding whether this is a big Rx motivator. If a physician has seen an infusion reaction, it is likely they will consider Vectibix. But in several years of Erbitux use they haven't seen it, is this going to worry them so much? Time will tell.
The biggest worrisome news here for Erbitux is the imact of pricing. With such heightened concerns on pricing of drugs, Amgen is likely to gain some brownie points for coming in with a 20% price cut to Erbitux. Despite this pricing strategy Vectibix isn't exactly a cheap drug, but it takes the sting out of launching a drug that still costs thousands of dollars a dose, and helps Amgen win PR battle over Erbitux.
Then there are other differentiators, such as more convenient dosing, Amgen's marketing muscle etc etc. So there is enough there to get a fast launch for Vectibix. On the other hand, Erbitux has user experience and an expanding label. It has hundreds of physicians who can speak to its great success with their own patients. Expect Erbitux to ratchet up the volume on that.
As they say, let the games begin.
