More bad news for Amgen and ceo Kevin Shearer.

Apparently, its cancer drug was removed from the USP Pharmacopeia for anemia of cancer, writes Mark Schoenebaum, a Bear Stearns analyst, in a research note this morning. This is significant, he says, because Medicare uses this list to set reimbursement policy.

Here’s his analysis: This represents about $400 million, or 8 percent to 10 percent, of global Aranesp sales and he believes most of the AofC revenue is generated in the US.

“If one assumes that $300 million of sales are in the US and that 100 percent disappear, we estimate that 15 to 20 cents of EPS would be at risk - this is 4 percden to 6 percent of our 2008 estimate. Using a 15 PE, this would represent approximately $4 of share value; however, we believe much of this impact is already reflected in the stock.”

But, he adds, being removed from the list “will likely make Aranesp reimbursement much more difficult for AofC going forward. Although Medicare represents only about 60 percent of the AofC market, we believe private payers may follow suit. Medicare has not yet made a payment policy change; we believe this needs to occur before reimbursement will be routinely denied. Timing for a Medicare policy change is not clear.”

[tags]Amgen, Aranesp[/tags]