Been down so long, it looks like up for Amgen investors.

Reflecting a perverse sense of optimism, Amgen stock rose nearly 4 percent today - and was up more than 7 percent at one point - after the biotech released a company-sponsored study showing its Aranesp anemia drug didn’t increase mortality among chemotherapy patients.

Although Aranesp failed the primary goal of making small-cell lung cancer more vulnerable to chemotheraphy, the study did reveal that patients had higher red blood cell counts, required fewer transfusions and had a lower risk of death by 7 percent.

In other words, investors seized on signs that Aranesp, which generated $4 billion in sales last year, wasn’t killing anyone and may even be effective against anemia. Recent studies suggested Aranesp increased the risk of death among cancer patients and encouraged tumor growth.

The safety concerns prompted Medicare administrators to review reimbursement and Congress to examine Amgen’s marketing. “With many negative trial results in other oncology settings over the last few months, we think investors were largely extrapolating those experiences onto this study,” Chris Raymond, a Robert Baird analyst, wrote in a research note today.

Wall Street got this one right - a drug that doesn’t kill the patients is good news.

Further reading…
Forbes
[tags]Amgen, Aranesp[/tags]