Fat-shedding find boosts biotech firm

FOR anyone who owned shares in California's Amgen, the world's largest biotechnology company, last week was a good one: between Tuesday night and Friday morning the price rose by 10 per cent, to $84.25, as almost four million shares changed hands.

The rise was triggered when news leaked of Friday's edition of the journal Science. The journal described how mice born with a genetic defect that made them obese shed body fat when injected daily with a protein called leptin.

The hope that the same treatment might work for humans, if a drug could be developed, sent the shares of Amgen, which - along with Hoffman La Roche - has a licence to exploit this finding, rocketing.

"It's quite irrational," said Teena Lerner, biotechnology analyst at Lehman Brothers in New York. "But when there's so much media attention, combined with peoples' hopes and dreams about weight loss, I guess they express that by buying the stock."

The obesity "treatment" will take years to come to the market - if it ever does. There are even doubts about whether humans have the same problem, and in how many it is truly a genetic problem.

But obesity is big business, especially in the US. "Non-fat fats" - chemicals that taste like fat but are not absorbed - are a $100m (pounds 62.5m) market alone. And the overall spending on diets and diet products in the US is $40bn.

However, developing diet products is difficult. Olestra, developed by Procter & Gamble, is a fat that is not absorbed by the intestine. The corporation has spent more than seven years waiting for the US Food and Drug Administration (FDA) to approve the drug for public consumption.

Orlistat, an anti-obesity drug being developed by the Hoffman La Roche, is also stuck in the approvals process.

Salatrim, developed by RJR Nabisco, is a low-fat fat that has been approved and sold well; but a half-fat fat is only partway to the industry's Holy Grail.

Sucralose is a British invention, 600 times sweeter than natural sugar. It was discovered in 1970 at Tate & Lyle, the sugar giant.

So far the company has spent pounds 40m on development and has some approvals - but not in the US and Europe.

But at least Amgen is far from being a one-drug company. Jo Walton, the sector analyst at Lehman's London office, calculates that in five years it will have taken over the coveted title of having the world's biggest- selling drug from Glaxo's Zantac, with Epogen, a prescription drug that stimulates the body's production of red blood cells.