CHRISTOPHER WOODARD Staff Reporter Faced with slowing sales of its two primary products, Amgen Inc., the Thousand Oaks-based biotech company, has intensified its search for super-profitable drugs. But so far, the firm has been unable to find anything approaching the promise of Epogen and Neupogen, the two drugs that transformed Amgen into a pharmaceutical powerhouse. The company is working on treatments for everything from hepatitis C and cancer to spinal-cord injuries and Parkinson’s disease and is especially encouraged about leptin, a fat-fighting drug that would tap into the multibillion-dollar weight-loss market. In a recently-released study by Tufts University, patients who had daily doses of leptin, a naturally-occurring protein believed to regulate body fat, lost an average of 16 pounds over six months. Amgen officials said they have decided to proceed to a second phase of tests on humans. “We’re very optimistic and very encouraged,” said Andrea Rothschild, manager of corporate communications. Analysts who follow the stock, however, are less impressed. “It doesn’t sound that great, and a daily injection is a fairly severe treatment for not a lot of weight loss,” said Robert M. LeBoyer, an analyst at Genesis Merchant Group Securities in San Francisco. Added Kris Jenner, an analyst for T. Rowe Price Associates, “I think it certainly has the potential to improve. But I think if you were trying to predict the future, I see this being a product used by the most severely obese category, where 5 to 10 percent loss in body weight would be significant,” he said. Sales growth of Epogen, the company’s $1.1 billion-a-year treatment that enables kidney and cancer patients to increase their production of red blood cells, has slowed from 21 percent in 1996 to 8 percent last year, due in part to changes in Medicare reimbursement. Sales growth of Neupogen, a product that restores depleted white blood cell levels in chemotherapy and AIDS patients, fell from 12 percent in 1995 to 4 percent in 1997, in part because improved AIDS therapies have reduced the market for the treatment. The product still generated $1.05 billion in revenue in 1997. The federal government last week eased restrictions on reimbursement for Epogen, boosting Amgen stock. But analysts believe the product is nonetheless reaching maturity. And Epogen faces other threats as well, as other firms develop competing products. “In many people’s minds, you can’t take (Amgen’s) current revenue stream and project it out seven to 10 years,” said Jenner. “What does Amgen have to do? I think they have to have at least one product in the pipeline, and preferably two, that will generate peak revenue of $500 million or more.” That’s why Amgen is spending $630 million a year to fuel a research-and-development effort that has resulted in several new products. “We have quite a full pipeline of products in phase 1 to phase 3 trials,” said Rothschild. “We’re constantly looking.” Last year, the Food and Drug Administration approved the sale of Amgen’s third product, Infergen, after the company had gone six years without introducing a new drug. The product helps fight the hepatitis C virus. LeBoyer, though, sees the drug as more of a base hit than a home run. By his estimate, Infergen could bring in about $15 million a year. “I don’t see it as having a major significance. The company has a $2.3 billion earning stream without it,” he said. Amgen is also about to market Stemgen, a growth factor that helps stimulate the production of stem cells, which in turn help produce new blood cells. The product could be used to boost a cancer patient’s supply of stem cells in the bloodstream. Doctors could then remove a couple of pints of the stem cell-rich blood, for transfusion after the patient undergoes high-dose chemotherapy. The product has made it through three phases of rigorous human tests, and the company has filed an application with the FDA for regulatory approval, a process that could be completed as early as this year. Rothschild said the company does not make revenue projections, but she conceded the drug won’t likely match sales of Neupogen, given that there are relatively few high-dose chemotherapy patients. According to Jenner, the company’s best near-term bet is MGDF, a copy of a protein that produces blood-clotting platelets in the blood stream. The product could be used to help cancer patients combat serious bleeding that occurs when their platelets are killed by chemotherapy. MGDF is in Phase 3 of clinical testing, and officials say early results look promising. Jenner sees the product capable of generating as much as $300 million in annual revenue still short of the big blockbuster the company needs. LeBoyer said another promising product is NESP, which could assist in the production of red blood cells. The drug is in Phase 2 studies and early indications are that it may last longer in the system than Epogen, requiring patients to undergo fewer injections. Perhaps the most promising long-term effort involves GDNF, a protein researchers believe could regenerate damaged nerve cells for people with spinal-cord injuries and Lou Gehrig’s and Parkinson’s diseases, degenerative nerve disorders that afflict 30,000 and 1 million Americans, respectively. In one study, an ape with chemically induced Parkinson’s, which results in rigidity in movement and a loss of motor control, was able to perform fine motor skills after being given GDNF. “That, I think, is the program that could be the mother lode,” said Jenner. But even here, there are skeptics. Jim McCamant, editor of the Medical Technology Stock Letter, was unenthusiastic about GDNF, saying it’s unclear if the results of testing on apes of GDNF will ever translate into an effective treatment for humans. Amgen’s research and development money would have been better spent buying more of the licensing rights to promising products being developed by other biotech companies, he said. “The best hope for Amgen is to be bought out by DuPont,” he said of the rumored buyout. “They would bring a whole new look at the company.”