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Amgen, AstraZeneca End Development Pact; Shares Sink

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Amgen, Inc. (NASDAQ: AMGN) shares lost about 2.8 percent Tuesday on fallout from the termination of a three-year-old development pact with AstraZeneca plc (NYSE: AZN).

Amgen closed at $159.02, off $4.57; AstraZeneca declined 2.5 percent to $67.68.

Amgen said late Friday that it would end a co-development deal with AstraZeneca concerning the psoriasis and psoriatic arthritis drug brodalumab.

The decision was based on events of suicidal ideation and behavior in the brodalumab development program, which Amgen said would require restrictive labeling.

The labeling requirements "would limit the appropriate patient population for brodalumab," according to Amgen's R&D Vice President Sean E. Harper.

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Amgen added that it doesn't expect a "meaningful impact" on its "strategic and financial commitments" from its plan to pull out of the collaboration.

UBS's Alexandra Hauber, meanwhile, had forecast brodalumab would contribute to AstraZeneca's earnings beginning in 2017, and result in operating profit for the company of $930 million by 2020, according to Bloomberg.

AstraZeneca's 2014 operating income totaled about $2.14 billion.

AstraZeneca said it will decide on the further development of the drug "as soon as possible," based on further review of the data.

Recent Phase II studies show that brodalumab "delivers clinical benefit," AstraZeneca's Chief Medical Officer Briggs Morrison said.

In April 2012, Amgen and AstraZeneca agreed to jointly develop and commercialize five monoclonal antibodies from Amgen's clinical inflammation portfolio including brodalumab.

Posted-In: Alexandra Hauber amgenBiotech News Health Care Contracts Movers General

 

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