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Amgen Inc.’s anemia treatment, erythropoietin (EPO), is thought to be biotechnology’s next blockbuster drug. Recombinant EPO is a man-made form of a natural hormone that stimulates production of red blood cells. Anticipation of EPO approval lifted Amgen shares to an all-time high of $44.25 in March 1989. When EPO is approved, its initial users will be patients with end-stage renal, or kidney, disease, who often require blood dialysis several times a week. Other applications include anemia-afflicted cancer sufferers, rheumatoid arthritis patients, and acquired immune deficiency syndrome sufferers. Shearson Lehman Hutton puts the worldwide market for EPO at $3.5 billion in 1993, but some analysts disagree. Since Medicare pays for dialysis, the decision on how to fund EPO is crucial. Amgen also faces a fight with Genetics Institute, which holds rights to natural, highly purified EPO. Amgen holds rights to genetically engineered EPO and has been adamant in its refusal to consider cross-licensing the products.
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