New FDA Approval in Diabetes Drug (NVO)
The FDA has announced the approval of Victoza made and marketed by Novo Nordisk (NYSE: NVO). The approval is listed as being an approval to treat type-2 diabetes in come adults. This has been a pending approval and is Novo Nordisk’s once-daily injection. The drug is intended to help lower blood sugar levels along with diet, exercise, and selected other diabetes medicines; but it is not recommended as an initial therapy in patients who have not achieved adequate diabetes control on diet and exercise alone.
Victoza is in a class of medicines known as glucagon-like peptide-1 (GLP-1) receptor agonists that help the pancreas make more insulin after eating a meal, and this was part of our own “Next $180 Billion in Drug Opportunities” from last year.
The company has noted that five clinical trials involved more than 3,900 people, pancreatitis (inflammation of the pancreas) occurred more often in patients who took Victoza than in patients taking other diabetes medicines. Victoza should be stopped if there is severe abdominal pain, with or without nausea and vomiting, and should not be restarted if pancreatitis is confirmed by blood tests. Victoza should be used with caution in people with a history of pancreatitis. The most common side effects observed with Victoza were headache, nausea, and diarrhea. Other side effects included allergic-like reactions such as hives.
Victoza was not associated with an increased risk for cardiovascular events in people who were mainly at low risk for these events.
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Disappointment & Delay in Diabetes War (MNKD, LLY, NVO, PFE)
MannKind Corp. (NASDAQ: MNKD) is getting to learn more and more about disappointment, and the rumors and speculation that MannKind would not get its Afresa reviewed on time by a January 16 cut-off date turned out to be true. Afresa is designed to deliver a fast acting inhalable insulin that is supposed to be more effective than the injected products and it would put the company in competition for insulin with Eli Lilly & Co (NYSE: LLY) and Novo Nordisk (NYSE: NVO) for their insulin delivery. Pfizer Inc. (NYSE: PFE) discontinued its Exubera as an inhalable insulin, which is part of the reason for such a negative bias around MannKind’s Afresa.
MannKind’s Alfred Mann noted that the FDA has not yet completed its inspection of the insulin manufacturing facilities of N.V. Organon, a third-party supplier to MannKind; and he also noted that (to its knowledge) all other FDA inspections of third-party suppliers and clinical trial sites are complete and that there are no pending answers to any FDA questions or other deliverables due on MannKind’s part. And by the way, the FDA has accepted the name to now be AFREZZA as the trade name versus AFRESA before. MannKind has not yet been informed about the expected timing for the agency’s final determination on the NDA, which will be provided in an Action Letter.
We had hinted at this possible delay and speculation against MannKind during the week when we noted that the diabetes and insulin wars were about to heat up.
There was a big wave of selling at the end of the day. There have been rumors and reports that the FDA may not meet its deadline, so we won’t blatantly say that this was leaked out first. Still, the drop-off was at least something to be noticed, and you can see below the very active options trading and in the open interest for the JAN-2010 and FEB-2010 CALLS and PUTS.
JAN-2010 CALLS & PUTS
CALL$ Volume OpInt
7.50 5,370 24,648
10.00 1,971 23,608
PUT$ Volume OpInt
5.00 1,195 8,329
7.50 741 8,677
FEB-2010 CALLS & PUTS:
CALL$ Volume OpInt
5.00 2,961 8,845
7.50 1,960 18,475
10.00 8,307 38,668
12.50 771 17,132
15.00 1,035 11,626
PUT$ Volume OpInt
5.00 4,659 15,259
7.50 4,192 14,017
10.00 2,163 12,100
JON C. OGG
Diabetes & Insulin War About To Heat Up (MNKD, LLY, NVO, PFE, BMY, AZN, GERN)
MannKind Corp. (NASDAQ: MNKD) has not gone without its critics over the company’s inhaled insulin. The company has an upcoming review that will be a make or break event for the company. The company is about to face a potential do or die test next week as the FDA is set to decide the fate of the company’s inhaled insulin. MannKind’s Afresa is designed to deliver a fast acting insulin that is supposed to be more effective than the injected products. This would put the company in competition for insulin with Eli Lilly & Co (NYSE: LLY) and Novo Nordisk (NYSE: NVO) for their insulin delivery.
One of the biggest hurdles MannKind faces is that inhaled insulin products have been tried and tested by others, and they have failed or have fallen far short of the expectations set ahead of time. Pfizer Inc. (NYSE: PFE) discontinued its Exubera as an inhalable insulin.
- Lexicon Pharmacueticals (NASDAQ: LXRX) had a favorable Phase I reaction late last year in type 2 diabetes mellitus.
- These companies are all also fighting for their part of that next $170 billion market opportunity.
- Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN) already received FDA approval for Onglyza as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes.
- Geron Corporation (NASDAQ: GERN) is still a ways off for the stem cell angle here compared to its other stem cell endeavors, although you never know when stem cell companies will make periodic announcements.
The FDA is set to make a ruling on Afresa’s approval by January 16, which means that the JAN-2010 CALL options may or may not expire before such ruling is made. The FDA can always delay, and some reports hint at a later date now.
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Diabetes Drug War Heats Up (NVO, AMLN, LLY, MNKD, PFE, SPEX, VVUS, GNBT, BMY, AZN, ARNA, GERN, STEM, OREX, HDIX, PODD)
Over the last couple of weeks, there has been quite a bit of new data in the drug war in the fight against diabetes. New studies have been updated, earnings projections have been made, FDA dates have been telegraphed and more. While these are still far short of ultimate cures, the war against diabetes may have many new or improved treatments out sooner rather than later. We originally discussed one or two of the key upcoming treatments pending for the eight major diseases and conditions as “the next $170 billion opportunity” and this is a much deeper dig into that broad initiation. We have included many of the recent developments in the potential treatments for obesity as well, considering that Type II diabetes and obesity are frequently conditions tied directly to each other.
According to the Journal of Health Affairs, the figure on obesity for Americans is a whopping $147 billion per year in total medical costs. This comes to 10% of all healthcare spending. The figure from the U.S. Centers for Disease Control was some $116 billion spent domestically on treating diabetes in 2007. As this is a lengthy bit, we have not included some of the other treatments that have been in use or that were recently flagged because of reports of higher chances of cancer rates associated by the long-term use of these.
FDA & IMMEDIATE ACTION
There is a new diabetes hopeful that is supposed to be coming sooner rather than later. Novo Nordisk (NYSE: NVO) reported a 21% gain in earnings in the last week and said that it expects the FDA to make a decision on its next-generation diabetes drug Victoza (liraglutide) in a matter of weeks. The company’s CFO and CEO both indicated that the Danish company does expects a positive response from the FDA and we heard a August to September expectation. Novo Nordisk has already launched Victoza in England, Germany and Denmark last month and expects to release it in other European Union countries throughout 2009 and into 2010. The benefit is that this one doesn’t risk pushing blood glucose levels to counts which are dangerously low and it also helps users lose weight. Novo Nordisk said it has priced Victoza competitively with Byetta from Amylin Pharmaceutical, Inc. (NASDAQ: AMLN) and Eli Lilly (NYSE: LLY). After the earnings and after shares were still close to 52-week highs, we saw analyst downgrades on Friday for Novo Nordisk by both UBS and by J.P. Morgan.
The drug still expected the next big new release with Blockbuster potential is an inhalable insulin from MannKind Corp. (NASDAQ: MNKD). Afresa is to be its name. Despite past woes of inhalable insulin, MannKind shares were hitting 52-week highs in June and its shares are still up 20% from three months ago. A late-stage study showed that Afresa’s performance was similar to injectable insulin. The company recently sold a 7.4 million shares secondary offering to raise cash for this launch, and its CEO took 1 million shares of the offering. The thought was that MannKind would secure a partner for marketing and development, but the recent stock offering gives it more internal options ahead of what is believed to be a Spring-2010 FDA approval action. Pfizer Inc (NYSE: PFE) has been thought of as a partner as it moved Exubera inhaled-insulin patients to MannKind’s experimental product. The two companies had been partners until Pfizer pulled Exubera from the market in 2007.
There is also a huge opportunity for the once per week dosing. We are not yet convinced that this can be a universal next generation treatment, however this might be fine for many of the lower grade cases if you can refer to any diabetes cases as lower grade. Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), Eli Lilly (NYSE: LLY) and Alkermes Inc. (NASDAQ: ALKS) have had a recent New Drug Application accepted by the FDA for review. Exenatide is an investigational sustained release medication for type 2 diabetes that would be injected once per week and is the active ingredient in BYETTA. We are not alone in this thought, but Amylin is a company which many have thought would be acquired for years now when considering the link of diabetes and obesity.
VIVUS, Inc. (NASDAQ: VVUS) has a substantial shot here with Qnexa, its Type 2 diabetes treatment through weight loss assistance. The stock recently came off on worries of its risk factor language that may have to be disclosed, but it showed a 9.4% weight loss or over 20 pounds observed in patients. The DM-230 study was a 56-week study assessing the impact of Qnexa on glycemic management in 130 obese patients. The 10-site study was comprised of 90 females and 40 males with an average age of 50 who had Type 2 diabetes, and a majority of the patients had been diagnosed with diabetes for more the five years and were taking two or more oral diabetes medications. In the phase II and phase III clinical trials, Qnexa demonstrated glycemic control, significant weight loss, and an improvement in cardiovascular risk factors. VIVUS is also presenting data at a brokerage firm conference this coming Thursday. The company’s market cap is still just under $500 million and its most recent balance sheet had north of $144 million in cash and equivalents with very little long term debt.
Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN) have recently received FDA approval for Onglyza as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes. This Onglyza is a once-daily dipeptidyl peptidase-4 (DPP4) inhibitor that can be used in combination with commonly prescribed anti-diabetic medications or on a standalone basis as a monotherapy to significantly reduce glycosylated hemoglobin levels.
MORE OBESITY CANDIDATES COMING
Several biotechnology companies are working on the next wave of obesity candidates, as noted above in VIVUS’s Qnexa. Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) has Lorcaserin, Orexigen Therapeutics, Inc. (NASDAQ: OREX) has Contrave, and Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) has pramlintide. Orexigen’s Contrave has completed phase III trials and our time line for when the company will file for approval is in early 2010. The company is presenting data this Thursday at the Canaccord Adams Global Growth Conference. VIVUS’s Qnexa is currently in two phase III programs with a new drug application expected around the middle of 2010. Amylin’s pramlintide and metreleptin are currently in phase IIb.
We have the expectation that Arena will have a first-mover advantage with an NDA planned before the end of 2009. Certainly, any delays or advances could change the status of the front-runner category leadership. Arena’s near-term catalyst is the release of the phase III BLOSSOM data out in September 2009, which will be used as part of a supplemental NDA in late 2009 or into 2010. This still leaves a year or more for final FDA action from now. Arena shares surged in late-July after reporting that its obesity results met the three endpoints.
STEM CELLS
Stem Cell therapy offers a huge promise, but so far that looks to be years out and the promise is actually more of a hope for the time being. Geron Corporation (NASDAQ: GERN) is in the research stage of using stem cells in evaluation of Type 1 diabetes. The exact level of this study is not as far as along as some of its cancer and spinal studies, but this is one of the few stem cell companies that have dedicated part of their mission to diabetes. StemCells Inc. (NASDAQ: STEM) also has a Pancreatic Program concentrating its efforts on Type-I diabetes. Its goals are to identify, isolate, and culture pancreatic stem and progenitor cells, and to test their therapeutic potential.
While we at BioHealthInvestor would love to hold hope and promise for stem cells, we would not be hoping for stem cell treatments any time in the near future. While some positive notions have been noted in the stem cell sector, the National Institute of Health noted, “Over the past several years, doctors have attempted to cure diabetes by injecting patients with pancreatic islet cells—the cells of the pancreas that secrete insulin and other hormones. However, the requirement for steroid immunosuppressant therapy to prevent rejection of the cells increases the metabolic demand on insulin-producing cells and eventually they may exhaust their capacity to produce insulin. The deleterious effect of steroids is greater for islet cell transplants than for whole-organ transplants. As a result, less than 8 percent of islet cell transplants performed before last year had been successful.”
Why Byetta may be the efficacy leader among many diabetes candidates (LLY, ALKS, SNY, NVO, GSK)
Partners Eli Lilly & Co. (NYSE: LLY) And Alkermes Inc. (Nasdaq: ALKS) announced data Monday that further supports its weekly Byetta candidate, although the FDA still may have questions about the entire class of long-acting diabetes treatments.
The data in the anticipated Duration 3 trial of once-weekly Byetta was solid. The candidate demonstrated better efficacy in a head-to-head comparison to Sanofi Aventis’ (NYSE: SNY) Lantus once-daily injection, the class leader. In a trial involving 467 Type 2 diabetes patients, once-weekly Byetta showed a 1.5 percent reduction in A1c levels vs. the baseline, compared to a 1.3 percent reduction for Lantus.
An added benefit of taking the drug may be weight loss. The mean weight loss for once-weekly Byetta patients was 5.8 pounds during the 26-week trial. Mean weight loss was 3.1 pounds for study subjects taking Lantus.
There were no new safety concerns raised. Common side effects were respiratory infection and nausea.
It’s hard to compare all the drugs in the class against one another, but it appears based on the efficacy data that once-weekly Byetta may put it at the top of a class that includes Lantus, Novo Nordisk’s (NYSE: NVO) Victoza, and GlaxoSmithKline’s (NYSE: GSK) Avandia.
The big lingering question is the FDA’s view of all the diabetes drug candidates called GLP-1 analogs. The agency is reviewing heart-related safety data of candidates among many of the drugs in the class.
It also may be looking at possible cancer ties. The journal Diabetologia, associated with the European Association for the Study of Diabetes in late June published four studies that made a possible link between Sanofi’s Lantus and cancer. The studies fell short of making a direct link, but they raised plenty of questions. At the time, analysts became concerned that more questions could be asked about many drugs, if not the entire class of long-acting diabetes drugs.
The FDA’s view of Novo Norisk’s candidate could be important to the entire group. In April, its heart-related safety was seen as mostly favorable, based an 8-to-5 FDA panel vote. The decision was split, however, on if it should be put on the market. That company’s earnings report in early August might specify the FDA’s upcoming timeline. The drug received EU approval earlier this month.
The Novo Nordisk FDA timing may provide clues as to whether the FDA want to see more studies for many, if not all drugs in the class, which may extend the approval processes. — Mike Tarsala
Once-weekly Byetta market may be huge, pending potential new diabetes drug safety concerns (AMLN, SNY, LLY, ALKS, NVO)
Amylin Pharmaceuticals Inc. (AMLN) along with partners Eli Lilly & Co. (NYSE: LLY) and Alkermes Inc. (Nasdaq: ALKS) announced its new drug application for a once-weekly version of Byetta for diabetes has been accepted for review by the FDA, a move that may eventually help invigorate growth for the franchise.
The catalyst may be muted, however, as the announcement comes amid safety concerns among other drugs that are long-acting treatments for diabetes. Analysts became concerned last week about potential links between the Sanofi Aventis (NYSE: SNY) Lantus long-acting insulin product — the second-biggest seller in its product lineup — to cancer risk, sending its shares and those of competing manufacturers including Novo Nordisk Inc. (NVO) lower.
The journal Diabetologia, associated with the European Association for the Study of Diabetes in late June published four studies that made a possible link between Sanofi’s Lantus and cancer. The studies fell short of making a direct link, but they raised plenty of questions that were picked up by Wall Street.
Byetta works differently than long-acting insulin treatments including Lantus, but analysts became concerned that more questions could be asked about many drugs, if not the entire class of long-acting diabetes drugs.
Byetta had faced another big safety worry over the past 12 months that arguably held back it sales; a potential link to pancreatitis. But Amilyn and and Eli Lilly announced retrospective study data last month that involved 260,000 patients that did not show an increased risk of pancreatitis for Byetta patients, vs. patients taking other diabetes drugs.
Assuming that Amylin can make a strong case that Byetta is different from other long-acting diabetes treatments for which potential safety concerns have been raised, the new weekly formulation of the drug may help spur recently stagnant sales.
Byetta will not replace insulin in patients whose diabetes requires insulin treatment. But there are 20 million people in the U.S. with Type 2 diabetes, and it’s fair to say that many of them might be interested in a once-weekly drug that can help them control their blood sugar levels, assuming they feel comfortable that it’s safe. – Mike Tarsala
Sanofi strikes back with hefty Lantus data (SNY, NVO)
Sanofi-Aventis on Monday announced results of a 5-year study of its long-acting Lantus insulin in more than 1,000 patients that found no increased progression of blindness in patients that took Lantus vs. regular human insulin.
The safety study’s results come just days after analyst reports surfaced late last week, warning of a potentially negative analysis in a major medical journal that may link the company’s Lantus long-acting insulin product — the second-biggest seller in its product lineup — to cancer risk.
In the study announced today, Sanofi added that there was no observable trend in the five-year study for a difference in the incidence of serious adverse events including cancer, as well as adverse events leading to study withdrawal.
In addition to Sanofi shares, one other stock to watch on the announcement is Novo Nordisk (NVO), which makes a similar long-lasting insulin product called Levemir. — Mike Tarsala
Long-term insulin makers shares sink on possible study (SNY, NVO, MRK, LLY)
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
BioHealth & Medical Analyst Calls (AZN, NVS, NVO, CRL, IVGN, APPY, TWTI)
BNP Paribas overseas has lowered ratings of AstraZeneca (NYSE: AZN) to Underperform from Neutral; and raised Novartis (NYSE: NVS) to Neutral from Underperform.
Goldman Sachs has raised Novo Nordisk (NYSE: NVO) to Buy from Neutral; Charles River Laboratories (NYSE: CRL) downgraded to Neutral at Goldman Sachs.
JPMorgan has raised its rating on Invitrogen (NASDAQ: IVGN) to Overweight from Neutral.
Lazard Capital Markets started coverage of Aspenbio (NASDAQ: APPY) with a “Buy” rating.
R.W.Baird Downgraded Third Wave Technologies (NASDAQ: TWTI) to Neutral from Outperform.
Jon Ogg
June 24, 2008
Emisphere Scores on Novo Nordisk Pact (EMIS, NVO)
Emisphere Technologies, Inc. (NASDAQ: EMIS) is seeing a major surge in pre-market trading this morning after the company was designated a pact with Novo Nordisk A/S (NYSE: NVO). The companies enetered into an exclusive development and license agreement to develop and commercialize oral formulations of Novo Nordisk’s GLP-1 receptor agonists for the potential of treating Type 2 diabetes.
This pact will use Emisphere’s eligen technology and will generate payments to Emisphere by Novo Nordisk. This will include at least $87 million in product development and sales milestone payments to Emisphere. Of this amount, some $10 million will be the minimum first year payment, as well as royalties on sales.
This signed agreement will also give Novo Nordisk the option to develop oral formulations of Novo Nordisk compounds other than GLP-1 receptor agonists using Emisphere’s proprietary carrier technology.
Further financial details of the agreement were not made public. We might be much more questionable since this all depends on commercialization of the new sales. But Novo Nordisk is the key leader in diabetes treatment and has the best reputation for the entire sector.
To put this in perspective Emishpsphere’s market cap was a mere $60 million before this morning’s news. Emisphere is also a pre-revenue stage company. Shares are very thinly traded this morning with a huge illiquid spread. But the last trade was at $2.80, up some 41%. We’ve only seen 4,8000 shares change hands as of 9:02 AM EST and the average volume is only about 66,000 shares per day. Its 52-week trading range is $1.28 to $5.17.
Jon Ogg
June 23, 2008
