Subject: J&J's Brand Of Anemia Drug Wins FDA Nod 
Date: Published: 1/3/91 (85 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.

    Technology & Health:
    J&J's Brand
    Of Anemia Drug
    Wins FDA Nod
    ----
    By Michael Waldholz and Rhonda L. Rundle
    Staff Reporters of The Wall Street Journal

    Johnson & Johnson gained approval from the U. S. government
 to market its brand of a big-selling drug for treating
 anemia.
    The drug, called erythropoietin (EPO), may be especially
 helpful to many people with AIDS who can't take the drug AZT
 because it causes severe anemia for them.
    The drug is a genetically engineered version of a natural
 human protein made by the kidney that stimulates the body's
 supply of red blood cells.  In 1989, the Food and Drug
 Administration gave Amgen Inc. approval to sell EPO under the
 name Epogen.  Analysts said Epogen had sales of about $275
 million in 1990, making EPO the biggest selling drug yet to
 be produced by the biotechnology industry.
    Under an agreement between Amgen and Johnson & Johnson,
 Amgen has the U. S. rights to sell EPO only for use in
 treating patients who have anemia as a result of kidney
 problems and who require regular dialysis treatments.  Ortho
 Pharmaceutical Corp., a division of Johnson & Johnson, has
 the right to sell its brand of the drug, called Procrit, for
 all other anemia-related problems.
    In a study conducted by Ortho, the use of EPO
 significantly reduced the need for transfusions for patients
 with AIDS who are treated with AZT, the anti-AIDS drug
 marketed by Wellcome PLC. In the study of 118 patients, use
 of EPO reduced the need for transfusions by 40%, Ortho said.
    "We think this provides a real advance in the quality of
 life for many people {with AIDS}," said Mathilde Krim,
 founding co-chairwoman of the American Foundation for AIDS
 Research.  Ms. Krim said many doctors weren't using Amgen's
 version of EPO for AIDS patients because they were awaiting
 FDA approval.
    Kenneth Abramowitz, an analyst with Sanford C. Bernstein &
 Co., said he expected EPO sales to generate about $500
 million to $700 million in annual revenue for Johnson &
 Johnson within five years.
    Johnson & Johnson already has been selling the drug in
 Europe, where it generated about $150 million in sales in
 1990.
    Epogen and Procrit are "the same drug," an Amgen spokesman
 said.  Amgen's plant, which is next to company headquarters in
 Thousand Oaks, Calif., will supply EPO to Johnson & Johnson
 for packaging and sale to AIDS patients receiving AZT drug
 treatment.
    Amgen "won't get into promoting {Epogen} outside the
 dialysis market, and we would expect J&J wouldn't get
 involved in the dialysis market," the spokesman said.
    Under terms of their 1985 agreement, Amgen is entitled to
 royalties from Procrit equal to 5% of sales until Johnson &
 Johnson recovers certain development costs; then Amgen's
 percentage will rise to 10%.  Amgen said it already has
 received about $25 million from Johnson & Johnson to develop
 EPO and two other drugs.
    The agreement has been the subject of a bitter dispute!`P        between the two companies.  In April, a private arbitration
 judge ruled that Johnson & Johnson must buy all of its U. S. 
 supply of EPO from Amgen.  The companies also are supposed to
 develop a system that W,[6enable them to monitor sales by
 medical treatment.  "It's the only way to be sure that both
 sides adhere to the agreement," the Amgen spokesman said.
    Analysts said the financial impact of the FDA approval is
 minimal for Amgen.  But said Linda Miller, an analyst at
 PaineWebber Inc., "Many investors believe the market for EPO
 is much broader than dialysis, and this shows that the FDA
 agrees.  EPO still isn't a mature product in terms of its life
 cycle."
    In national over-the-counter trading yesterday, Amgen
 shares rose $1.50 to $63.75.  Johnson & Johnson shares fell
 $1.75 to close at $70 in New York Stock Exchange composite
 trading.

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