Biotech Key: Breakthroughs? Parkinson's Should Show Progress In 25 - 50 Years..... ( a different viewpoint ... murray )
Monday, April 19, 2004
BY GLORIA LAU
INVESTOR'S BUSINESS DAILY

Today's Americans will live longer and healthier than their parents and grandparents.

Half of all baby boomers will reach their 85th birthdays. By 2020, there will be 6.4 million centenarians. Even
Hallmark Cards sells 85,000 100th birthday cards a year.

Still, nearly 1.3 million people die from heart disease and cancer every year. Obesity is a growing problem with no
obvious solution. Other diseases kill hundreds of thousands a year.

Developing safe and effective treatments is the next challenge for drug makers such as Amgen. (AMGN)

For more than two decades, Amgen has established itself as a leading biotechnology company, with treatments based on
advances in cellular and molecular biology.

Success in the pharmaceutical world has translated into success on Wall Street.

Amgen's stock was a dominant market leader during the last half of the 1980s and most of the 1990s. Even though it last
hit a high in 2000, Amgen remains the biggest gainer of the past 20 years, soaring more than 47,000%.

Chief Executive Kevin Sharer recently spoke with IBD.

IBD: Where does the biotech industry go from here?

Sharer: Biotechnology is still young. Amgen itself is just 25 years old. We'll see breakthroughs for disease that
heretofore were seen as permanent fixtures, inevitable in the human condition. In some of the neurological diseases,
we'll see progress. In osteoporosis, we'll see progress.

As the biology of the body continues to reveal its secrets, biotechnology will continue to capitalize on that. The
first 25 years were just the beginning. The next 25 years will be even more productive.

IBD: How close are we to finding treatments for cancer, Parkinson's and Alzheimer's?

Sharer: Cancer is going to be something we attack element by element. Maybe in 50 to 100 years, we'll be able to say we
can deal with most cancers.

We don't really know with complete certainty all the biology that causes Alzheimer's and Parkinson's. So I'd hope in
the next 25 to 50 years we'll have made dramatic progress.

IBD: Which of your pipeline drugs address these conditions?

Sharer: We have our Glial cell derived neurotrophic factor (GDNF) in phase two placebo-controlled clinical studies in
patients with advanced Parkinson's.

In an earlier open-label study (of five patients), it showed dramatic benefit. An open-label study means patients know
if they're getting the drug or placebo. We're hopeful about our product.

In the business, many people tend to be very optimistic about how fast their technology will progress. I'm realistic. I
think science and medicine moves in 10-year increments, so 25 years is only 2.5 cycles.

A cycle is 10 years of scientific work, and 10 years of industrial work: lab work, clinical testing, build factories,
getting the FDA to approve a product. So for a scientific discovery to translate into medicine in 20 years is actually
fast.

We focus on five to six disease categories. Pipelines are notoriously difficult to make predictions around. But we have
potential drugs for various types of cancer, for pain and other grievous illnesses.

In most pipelines, more things don't work than do work. That will be true of our pipeline as well. But ours is broad
enough and deep enough . . . that we should have more than our share of successes.

IBD: Biologics can provide tremendous benefit, but they're pricey. How will Americans afford biologics when they cost
$15,000 to $300,000 per person per year? Who will pay?

Sharer: These things are expensive — I know it. Let's say you're a human being with advanced rheumatoid arthritis. I've
talked to some of these patients. They're unable to get out of bed, literally. They really don't have a life and Enbrel
came along and now they can play golf, climb mountains and have a life.

This drug's expensive. It costs $10,000 to $14,000 a year, but for the person who has the choice between being an
invalid and living a full and active life, that's not a bad deal. That doesn't mean everyone's got $10,000 to $14,000 a
year to pay for it, but (Amgen) have programs that help pay and insurers help pay.

Hopefully insurance will help. (How patients will pay for drugs) is a serious question and I don't have an easy answer.
It's a societal concern that hasn't really been addressed.

The average cost to develop a biologic is on the order of $1 billion. Most drugs (fail in clinical trials). So the
prices we charge help us recoup research and development costs and provide enough money for us to keep investing in
R&D.

Amgen invests 20 cents on every dollar back into R&D. We're not talking about marketing; we're talking about hard
science and clinical trials.

How much will individuals, the government and insurers (each) pay? That will be sorted out in the political
environment.

I believe drugs that are first-in-class will get and do deserve a premium because that's an encouragement of science.
If we didn't reward innovation we'd be in a hard place in terms of the national economy, job creation and economic
vitality.

IBD: How does the Medicare drug plan address biologics?

Sharer: It's a complex, deeply detailed concept deep in the technical section of the bill. It affects how some cancer
drugs are reimbursed.

There's a (years-long) demonstration project. Hundreds of millions of dollars have been allocated to pay for
inflammation injectables for the Medicare population.

Data will be collected on the usage and effect, with the thought that in the future the benefit will be made permanent.
But it's a very small part of the Medicare bill's overall tab.

The policy-makers were struggling with a (limited) budget. Cancer is covered. Inflammation products are partially
covered.

IBD: What percent of all biologics on the market will Medicare pay for?

Sharer: I don't know. It's a meaningful amount.

IBD: Will the Medicare drug plan help biotechs grow overall sales? Or will the presence of such a large payer —
Medicare — end up forcing biotechs to charge private payers more per drug to make up for lower profits on the Medicare
business?

Sharer: The pathway for Amgen and other biologic companies to be successful is to introduce breakthrough drugs for
major illnesses. If the drugs are good enough, the money will be found to pay for them because it'll be worth it.

Now that's independent of the Medicare bill. Certainly as the government becomes a larger payer . . . the government
will have more influence on what the prices are.

I think as long as the biotechnology companies are going to be able to develop and introduce truly innovative
medicines, I'm optimistic the government and other payers will continue to reward innovation.

SOURCE: Investor's Business Daily
http://www.investors.com/editorial/general01.asp?v=4/16

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