ADA Wrap-Up: Where's The Chocolate?

Trying to understand all that data released at the American Diabetes Association’s 68th Scientific Sessions in San Francisco? Attempting to make sense of the company posturing and resulting fallout in the marketplace? It’s enough to make anyone a little hypoglycemic.

But getting a handle on the market potential of the various medicines in the lucrative Type II diabetes space, such as Januvia and Byetta, is worth a potential sugar low.

Here's a quick review for those who need it. By 2012 a gazillion people in the US will have Type II diabetes--actually only about 25 million but you get the point. BIG MEDICAL PROBLEM. Januvia, the first FDA-approved DPP-4 inhibitor, is proving to be a useful weapon--or at least a highly prescribed one. In 2007, the drug racked up worldwide sales of $668 million. And Catherine Arnold, an analyst at Credit Suisse, projects global sales will grow to $3.1 billion by 2010. But there's competition. (See below.)
The curve for Amylin/Lilly’s Byetta, a GLP-1 analog on the U.S. market since 2005, hasn’t been so steep. At $158 million in revenue for the first quarter, twice-daily Byetta missed its mark due to a number of factors – among them lack of up-take by primary care physicians. That’s one reason why Amylin told the street in January it would speed up its filing for once-weekly Byetta LAR to the second quarter of 2009.

At ADA this week, Amylin reported data showing its Byetta LAR injection improved glucose control at or below ADA’s 7% goal for 72% of patients, with an average weight loss of 9.5 lbs. Jim Reddoch of FBR Capital Markets said, “We think LAR is a potential best-in-class drug, well ahead of the competition.” He’s modeling $2 billion-plus in peak sales for the drug in 2012. But the news did little to help Amylin's share price, which slid June 9 on news from Novo Nordisk and Roche.

Novo released new Phase III results pitting its once-daily GLP-1 analog liraglutide against Byetta. Liraglutide was significantly more effective at lowering A1c and resulted in slightly more weight loss. JPMorgan’s Cory Kasimov noted, “With liraglutide’s approval expected by 1H09, we believe the drug could take significant market share from Byetta.”

Amylin isn't taking the news sitting down--but it will likely have to invest considerable money and resources to keep a leadership position. The biotech's CEO, Daniel Bradbury, told “The Pink Sheet” DAILY the firm is considering head-to-head trials of Byetta vs. liraglutide.

Meanwhile, Roche and partner Ipsen’s taspoglutide (R1583) also demonstrated impressive A1c control. Rate of nausea, however, appeared high at 52% with the 20 mg once-weekly dose, although patients weren’t titrated. The firm announced at ADA that it will begin a head-to-head trial of taspoglutide vs. Byetta. It plans an NDA filing in 2010. Maybe Amylin needs to add another arm to that trial its considering?

(We understand if you are getting a bit dizzy. Great summaries of all the news are available at our sister publication, "The Pink Sheet" DAILY.)

But the news wasn't all GLP-1. The DPP-4 class is looking more crowded as two contestants vie for the prize of being second to market. The Bristol-Myers Squibb/AstraZeneca drug, Onglyza, when taken alone, apparently significantly improves A1c levels compared to baseline in just three doses. Bristol plans to file an NDA for the compound mid-year. Meanwhile, Takeda issued a slew of reports about its alogliptin, widely expected to be approved later this year. Good news for Merck--analysts don't seem to think either drug looks superior to Januvia.

And that's definitely bad news for Takeda. The company has a thin pipeline and is counting on this compound to generate sales to offset the revenue losses caused by the 2011 patent expiration of its blockbuster Actos. (We'll have more on Takeda's strategy in an up-coming IN VIVO feature. )

Which brings us to our final point. How much should we care about HbA1c anyway? In a previous post, we wrote about the ACCORD trial’s finding that lowering hemoglobin A1c levels doesn’t correlate with a lowered risk of adverse events such as heart disease and stroke. Amylin CEO Daniel Bradbury told IN VIVO Blog that he believes the finding won’t result in modified endpoints. HbA1c is still a valid endpoint because it’s directly proportional to microvascular complications of type 2 diabetes, Bradbury said. But if that's just wishful thinking, it could spell trouble for any company currently playing in this arena, necessitating the expensive redesign of clinical trials.

Time for some chocolate while we ponder that issue.

--Pamela Taulbee

(Photo courtesy of Flikr user the Princess of Ilyr via a creative commons license.)

Insight + Preparation + Dumb Luck = Blockbuster

This blog has spilt plenty of bytes on the nasty consequences for GlaxoSmithKline, and for the industry, of the Avandia problem – but we haven’t said much about who’s likely to benefit. That part of the story we left to The RPM Report – and you can see that analysis here.

As Kate Rawson notes in that story, the two biggest big beneficiaries are Merck’s Januvia – the only DPP4 inhibitor on the market—and Amylin/Lilly’s Byetta. But Januvia is in many ways a more interesting business case study – and one we’ll talk about in a public fireside chat with Merck CEO Dick Clark at Windhover’s annual shindig in New York for the industry’s top business development executives, Pharmaceutical Strategic Alliances.

Clark -- pictured right -- ain't exactly the pin-up CEO. He's a manufacturing guy, from the blue-collar neighborhood of the drug industry. But he's managed a turnaround at the otherwise very white-collar Merck of impressive proportions, this being the company, that not so long ago, looked like a cartoon Gulliver hogtied by thousands of litigious Lilliputions.

And as Clark and I will discuss at the PSA meeting, much of that success is due to Januvia, the product of a nearly perfect blend of scientific insight and strategy, management skill and dumb luck.

Trailing Novartis by four years, Merck’s DPP4 team not only built a molecule that avoided one of the receptor subtypes hit by Novartis’ compound, Galvus, they managed to convince the FDA – although no one is saying so, publicly – that by doing so they’d made a safer drug. Thus Januvia never got hit with the FDA scrutiny Galvus did – and ended up with a safety label so compelling (a side-effect profile comparable to placebo) that this once-a-day pill, noted one diabetologist, has become “the first truly simple-minded therapy in diabetes.”

And probably the fastest beginning-to-end development program for any first-in-class primary-care drug in recent memory (seven years from discovery initiation to approval). Indeed, Clark and research chief Peter Kim had decided – given the company’s thin late-stage pipeline -- that Januvia was one of two drugs (the other was Gardasil, the cervical-cancer vaccine) absolutely crucial to Merck’s recovery from its disaster with Vioxx.

And so Clark created a multi-disciplinary task force around the compound, with its boss reporting directly to him. Bureaucratic hurdles fell away. And the launch was as nearly perfect as a major primary-care launch can be – five months after launch, the drug had captured a greater share of attention (nearly 40%) than nearly any of the recent successful primary-care launches. And it’s now on target for what analysts think could be $775 million in first-year sales.

(We should mention that Clark did the same thing – another multi-disciplinary task force reporting directly to him -- with Gardasil – on track for $1.5 billion in worldwide full first-year sales.)

And then there’s dumb luck. Januvia has been the extraordinary beneficiary of the misfortune of others--the Galvus approval delay, in the first place, and now Avandia. Merck therefore took 100% of the profit from the excitement Novartis helped generate around the arrival of a brand-new anti-diabetic class—but none of the negatives of Galvus’ apparent side-effects. Likewise, it’s taking the lion’s share of Avandia’s lost prescriptions.

And all of this despite the fact that Januvia ain’t that great a drug. Good as an add on. But not particularly powerful in itself. Instead, Januvia is the perfect drug for our era, when safety—particularly mixed with extreme simplicity--sells far better than efficacy alone.

The PSA conference will be a good time to question Clark on just how much a CEO matters in creating a blockbuster. We forecast his answer this way: some -- but dumb luck sure helps.

Galvus Misses Its Window; Is this All Good for Merck?

The Galvus delay is terrible news for Novartis.

Competitor Januvia, from Merck, has already seen the single best launch in recent memory for an anti-diabetes product. With a 40% share of new written scrips just four months after introduction, it may be the best launch of any new drug into a crowded category. Given its labelling -- “similar to that reported with placebo” -- doctors are rushing to prescribe what one clinician called a "no-brainer drug": zero training required in administering it; once-a-day dosing, with or without food, with or without any other medication. Once they're comfortable with Januvia, why would doctors switch to anything else, unless they're dramatically differentated?

Originally estimated to be three months behind Januvia, Galvus was already at a big timing disadvantage. Things are now much worse. Galvus seemed to have little differentiation over Januvia before (and therefore little chance of gaining a market-share advantage--now its only differentiation is negative: the skin lesions in primates, linked in FDA's mind to the toxicities seen with the drug at very high doses. That won't encourage doctors to try new patients on Galvus, particularly if, as a number of experts believe, Galvus' label--granted the drug's ultimately approved--comes with restrictions on use.

The potential time bomb for Merck is that Galvus' problems will redound to its detriment--just as the problems around Merck's own Vioxx KO'd Pfizer's Celebrex. FDA's metabolic division has been under severe scrutiny and it's possible they could do the cautious thing and start looking at lot more closely at Januvia. And when they do, will doctors too start thinking a lot more before prescribing what was once a no brainer?