Calls of Note Part 5

BofA notes that at the EADV meeting in Rhodes, Greece, Abbott (NYSE:ABT) presented impressive Ph III psoriasis (PsO) data from its international CHAMPION trial. Humira's PASI 75 (75% improvement from baseline), at 4 months, was statistically significant to both methotrexate (MTX) and placebo.

Although the Humira efficacy is impressive, the placebo rate is much higher than expected. Firm believes the net PASI 75, allows a better comparison. Additionally, CHAMPION didn't allow dose escalation of MTX if patients reached a PASI 50 and the curve for MTX still seemed to be increasing at 4 months, which they believe could overestimate the benefit to MTX. Compared to Enbrel's Ph III PsO data (approved for PsO in 2003), however, Humira still looks to have better short-term clearance. Humira tolerability also looked relatively clean.

Based on IMS monthly data, 3Q06 looks light for Amgen's (NASDAQ:AMGN) Enbrel and firm thinks that Humira's PsO data could gain some incremental market share (5%) among the early dermatology adopters in 2006, but will not meaningfully impact Enbrel's market share until Humira is FDA approved for PsO. Firms feel the biggest hurdle for Humira will be reimbursement, which should improve after approval (likely in 2H07).

Firm is positive on AMGN over the long term and believes AMGN represents the best value opportunity in large-cap biotech (~17x P/E) as much of the CERA risk appears priced in.

Notablecalls: Not actionable but good to know category.