Long-term insulin makers shares sink on possible study (SNY, NVO, MRK, LLY)

June 26, 2009 · Filed Under General 

Sanofi-Aventis (NYSE: SNY) and Novo Nordisk AS (NYSE: NVO) shares are trading lower on strong volume Friday as analysts anticipate a potentially negative analysis in a major medical journal that may link Sanofi’s Lantis long-acting insulin product — the second-biggest seller in its product lineup — to cancer risk.

Novo Nordisk makes a similar long-lasting insulin product called Levemir. The fear among some traders is that the yet-to-be published study could also affect drugs in the same general class.

Facts are lacking, since the article has not been published. But the worry among some traders is that any study that may result in fewer prescriptions being written for long-lasting insulin products, until the safety data can be weighed further.

Some market participants are recalling Glaxo Smith Kline’s drug Avandia, which suffered steep sales declines two years ago after an analysis tied the drug to potential heart attack risk.

Should the study results have a major impact on sales of long-acting insulin, there are a few products that may stand to benefit. One is Byetta, made by Amylin Pharmaceuticals (Nasdaq: AMLN) and Eli Lilly & Co. (LLY). It works diffently than the long-acting insulin products, and is not a substitute for insulin.

Another may be Merck’s (NYSE: MRK) Januvia, a once-daily pill that is not an insulin product, but can can help lower blood sugar levels in patients with Type II diabetes. — Mike Tarsala

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