KEL531 PDF ENG
KEL531
TIM CALKINS
Forecasting Denosumab
“Our job is quite simple,” explained Jennifer Fry, project manager at Oakdale Strategy
Group, a strategy consulting firm based in Chicago. It was a cold day in early February 2011, and
Fry was meeting with her team. “We’ve been asked to develop a forecast for denosumab for
2015,” she continued. “Our client is one of the world’s largest pharmaceutical firms. The senior executives there are taking a close look at acquiring Amgen and want an outside opinion about denosumab.” Steven Meyers, a partner at the firm, quickly jumped in. “This is an incredibly high-profile assignment because the value of Amgen is closely tied to the revenue forecast for denosumab.
We’ve got an important client and a very important project. Let’s nail this one.”
Amgen
Amgen was one of the world’s leading biotechnology companies, with more than 17,000 employees and almost $15 billion in revenue. The company was founded in 1980 under the name
Applied Molecular Genetics and assumed the name Amgen in 1983.
Amgen was highly profitable; in 2009 it had net income of $4.6 billion on revenues of $14.6 billion (see Exhibit 1).
In 2010 Amgen had ten drugs approved for sales in the United States. The most important of these were Aranesp and Epogen, for anemia; Enbrel, for arthritis; and Neulasta, for febrile neutropenia, a condition associated with chemotherapy (see Exhibit 2).
Despite its considerable success, Amgen was in a difficult position in 2011; the company’s core products were not growing and Aranesp was declining sharply. In addition, patent expiration issues loomed. As a result, Amgen’s stock was not performing well; it had peaked in 2005 at more than $85 per share but had declined to about $55 per share five years later.
Amgen’s most promising new product was denosumab, a fully human monoclonal antibody designed to treat osteoporosis. Amgen began working on the molecule in 1994 and finally launched it sixteen years later under the brand names Prolia
TIM CALKINS
Forecasting Denosumab
“Our job is quite simple,” explained Jennifer Fry, project manager at Oakdale Strategy
Group, a strategy consulting firm based in Chicago. It was a cold day in early February 2011, and
Fry was meeting with her team. “We’ve been asked to develop a forecast for denosumab for
2015,” she continued. “Our client is one of the world’s largest pharmaceutical firms. The senior executives there are taking a close look at acquiring Amgen and want an outside opinion about denosumab.” Steven Meyers, a partner at the firm, quickly jumped in. “This is an incredibly high-profile assignment because the value of Amgen is closely tied to the revenue forecast for denosumab.
We’ve got an important client and a very important project. Let’s nail this one.”
Amgen
Amgen was one of the world’s leading biotechnology companies, with more than 17,000 employees and almost $15 billion in revenue. The company was founded in 1980 under the name
Applied Molecular Genetics and assumed the name Amgen in 1983.
Amgen was highly profitable; in 2009 it had net income of $4.6 billion on revenues of $14.6 billion (see Exhibit 1).
In 2010 Amgen had ten drugs approved for sales in the United States. The most important of these were Aranesp and Epogen, for anemia; Enbrel, for arthritis; and Neulasta, for febrile neutropenia, a condition associated with chemotherapy (see Exhibit 2).
Despite its considerable success, Amgen was in a difficult position in 2011; the company’s core products were not growing and Aranesp was declining sharply. In addition, patent expiration issues loomed. As a result, Amgen’s stock was not performing well; it had peaked in 2005 at more than $85 per share but had declined to about $55 per share five years later.
Amgen’s most promising new product was denosumab, a fully human monoclonal antibody designed to treat osteoporosis. Amgen began working on the molecule in 1994 and finally launched it sixteen years later under the brand names Prolia