The Food and Drug Administration delayed its approval decision on Amgen Inc.'s (AMGN) osteoporosis treatment denosumab - a drug considered crucial to the biotech - because the agency seeks more information from the company.

The Thousand Oaks, Calif., drug maker is seen able to answer the FDA's questions by year end, although ultimate approval may not occur until mid-2010. Denosumab is still widely expected to be approved by FDA, but the delay postpones the drug getting to market, limiting potential revenue in 2010, and may slow Amgen's plans to seek the drug's approval for a separate and more lucrative indication.

An Amgen spokesman declined to offer specifics, citing the ongoing regulatory process, but said the company expects to respond "quickly" and in the "near term."

"It is not uncommon for the FDA to have requests for additional information," he said. Many on Wall Street had expected such a delay for the drug because regulators have a history of missing deadlines and may want more time to analyze the safety record of a new drug like denosumab.

Amgen shares recently fell 1.3% to $60.50.

Eric Schmidt, an analyst with Cowen & Co., believes that denosumab's approval is likely in mid-2010. He continues to project 2010 denosumab sales of $200 million in osteoporosis, but said that the Wall Street consensus estimate of about $500 million will likely have to be reduced.

Despite the delay, Schmidt is recommending that clients buy shares of Amgen before its third-quarter earnings report Wednesday, as he expects the company's core business will outshine any delay from denosumab.

Amgen, which had 2008 revenue of $15 billion, already sells five products with sales exceeding $1 billion.

Some analysts, including Lazard Capital Markets' Joel Sendek, project a shorter delay and see denosumab getting approval in early 2010. Sendek projects 2010 sales of $439 million, rising to $1.2 billion in 2011.

A key component of 2010 sales is how long the FDA take in its review. Under a Class 1 resubmission, which involves minor changes, clarifying information and updates, the cycle is generally 60 days. A Class 2 resubmission is more cumbersome, including more clinical information and items needing a review by an advisory committee, resulting in a six-month review. The classification is determined by the FDA after resubmission.

In the complete response letter, the agency requested several items including information on a post-market surveillance plan, Amgen said.

The FDA isn't requiring any additional clinical trials before completing its review, but it did request a new clinical program to support approval for preventing postmenopausal osteoporosis. The FDA has also requested updated safety data related to denosumab, which has the proposed brand name of Prolia.

That updated information will include data from two large studies of denosumab's usefulness in preventing complications from cancer's spread to bone, a second and possibly more lucrative indication for the drug. Those studies became available over the summer.

Amgen hasn't disclosed its regulatory filing plans for preventing cancer-related skeletal complications, but a third study is coming early next year and many expect approval in late 2010.

Depending on the outcome of that third trial, Deutsche Bank projects peak global sales between $1.4 billion and $2.1 billion in preventing skeletal complications in cancer.

The FDA is requiring a Risk Evaluation and Mitigation Strategy, including a medication guide, a communication plan and a timetable for submission of assessments of the plans. Amgen has already submitted materials for such a program, but it is unclear if the agency has questions.

JPMorgan analyst Geoffrey Meacham, in a note to clients, said such requirements aren't onerous as compared to a patient registry, which could have restricted usage of the drug and hurt sales.

-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; thomas.gryta@dowjones.com