Amgen ends partnership with AstraZeneca on psoriasis drug

(Adds details, analyst quote)

By Amrutha Penumudi

May 22 (Reuters) - Amgen Inc (Xetra: 867900 - news) said it will terminate a collaboration with AstraZeneca Plc (NYSE: AZN - news) to develop a psoriasis drug after it observed suicidal thoughts in the subjects of a trial.

Amgen said such safety concerns would likely result in a restrictive label that could limit the number of patients using the late-stage experimental drug, brodalumab.

The company needs drugs like brodalumab at a time when many of its drugs face competition from cheaper copies, RBC Capital Markets analyst Michael Yee said.

Although returning a late-stage drug does not have a major impact, it highlights incremental risks for Amgen, he said.

Brodalumab belongs to a class of drugs called IL-17 inhibitors that work by blocking a signaling pathway that plays a key role in inducing and promoting inflammatory diseases.

Two late-stage studies evaluating the drug for the treatment of psoriatic arthritis were started in 2014. It was also being tested for treatment of other inflammatory conditions like psoriasis and spondyloarthritis.

Research firm ISI Group last year forecast annual peak sales of about $2 billion for the drug.

AstraZeneca could decide on the development and marketing of the drug for all territories, except for Japan and certain Asian territories, where Kyowa Hakko Kirin has the rights to it, Amgen (Hanover: AMG.HA - news) said.

Amgen and AstraZeneca partnered in April 2012 to develop and market brodalumab and four other drugs from Amgen's inflammation portfolio.

A number of Amgen drugs, including Neulasta, its immune-system strengthening drug, face the risk of being copied into biosimilars in the next few years. The drug generated sales of $4.59 billion in 2014.

Novartis AG (Xetra: 904278 - news) 's copy of Amgen's blockbuster Neupogen won regulatory approval this year but its sale has been blocked by a U.S. court pending an appeal by Amgen.

Amgen's shares closed at $163.58 on the Nasdaq on Friday while AstraZeneca's shares closed at $69.45 on the New York Stock Exchange. (Reporting by Amrutha Penumudi in Bengaluru; Editing by Don Sebastian)