Bloomberg News

Bristol-Myers Diabetes Drug Draws Scrutiny After Avandia

June 23, 2011

(Updates with close of trading in sixth paragraph.)

June 23 (Bloomberg) -- Bristol-Myers Squibb Co. and AstraZeneca Plc.’s new diabetes pill will probably face increased scrutiny from regulators and doctors after two rivals were tied to cancer and heart risks.

The drug, dapagliflozin, works differently than Takeda Pharmaceutical Co.’s Actos, linked to cancer last week, and GlaxoSmithKline Plc’s Avandia, tied to heart risks in 2007. While those drugs adjust the hormone that regulates sugar, the new pill helps patients excrete sugar through their urine.

“Increasingly, people are on the lookout for problems with these drugs,” said Laurence Kennedy, chairman of Cleveland Clinic’s department of endocrinology, diabetes and metabolism, in a telephone interview. “There will always be a market for finding newer and different ways to help control blood sugar, but the newest ways will be under increasing scrutiny.”

Some analysts say they won’t project sales for dapagliflozin because of the risks posed by Avandia and Actos. Even if approved after a regulatory panel next month, doctors say they will be slow in using the new drug until more is known about long-term safety. A one-year study reported last year found no cancer or heart risks. Two years of data will be reported June 26 at the American Diabetes Association meeting.

An estimated 25.8 million Americans have diabetes, mostly the Type 2 variety linked to being overweight and sedentary, according to the National Institutes of Health. The disease is caused by an inability to use insulin to break down blood sugar into energy and can increase the risk of heart disease, stroke and kidney damage. Medicines are used to lower sugar levels.

Stock Performance

Bristol-Myers gained $1.59, or 5.7 percent, to $29.33 at 4 p.m. in New York Stock Exchange composite trading. The New York- based company reported yesterday that its experimental blood thinner apixaban beat warfarin in a study. American depositary receipts of London-based AstraZeneca, each representing one ordinary share, fell 30 cents, or less than 1 percent, to $48.89.

Dapaglifozin is being developed jointly by Bristol-Myers and AstraZeneca. The earlier trial showed it worked better than insulin plus a placebo, and that patients using it lost weight. This is particularly noteworthy because insulin drugs frequently trigger weight gain.

New Class

If approved, dapagliflozin would be the first in a new class of medications, called SGLT2-inhibitors. Similar drugs are also being developed by Johnson & Johnson, of New Brunswick, New Jersey, Indianapolis-based Eli Lilly & Co. and the German drugmaker Boehringer Ingelheim GmbH, Tokyo-based Astellas Pharma Inc., Isis Pharmaceuticals Inc., based in Carlsbad, California, and Lexicon Pharmaceuticals Inc., of The Woodlands, Texas.

The companies, analysts and investors will be closely watching the safety results and a panel of Food and Drug Administration advisers that is set to review dapagliflozin on July 19, said Les Funtleyder, a portfolio manager at Miller Tabak in New York, in a telephone interview.

Concerns about potential side effects of all diabetes medications leave analysts little room to assess the sales potential of dapagliflozin, he said.

“With these type of drugs, we don’t model until they’re approved because so much can go wrong,” Funtleyder said. “We know it’s a new class in diabetes, which is often not well- controlled. The downside is people are nervous about possible infections and other side effects, and you have to take the good with the bad.”

Bristol-Myers referred comment to AstraZeneca. AstraZeneca’s spokeswoman Kirsten Evraire declined to comment.

Avandia Restrictions

In May, U.S. regulators restricted use of London-based Glaxo’s Avandia, ordering the drug to be pulled from pharmacy shelves and made available only through a special program. Sales of Avandia fell to $680 million last year from $1.8 billion in 2007 after a study that year showed a 43 percent increased risk of heart attacks among patients taking the medicine.

On June 15, a five-year analysis from a decade-long company-sponsored study of Takeda’s Actos showed an increased risk of bladder cancer. Actos is the world’s biggest-selling diabetes drug. The FDA had required the study under new guidelines for diabetes drug approvals.

$1.6 billion by 2017

Bristol-Myers’s and AstraZeneca’s Onglyza and Kombiglyze, a version of the drug combined with metformin, a standard treatment, generated $158 million last year. Those two drugs are projected to make $1.6 billion by 2017, according to estimates from Seamus Fernandez, an analyst for Leerink Swann.

Even after approval, “we still have an obligation to conduct studies carefully and properly just to make sure nothing major has been missed” said Kennedy, of the Cleveland Clinic.

Since its original warning on Avandia, the FDA has required an aftermarket study of heart risks for all diabetes drug applications, said Karen Riley, a spokeswoman for the FDA, in an e-mail.

“Not all programs are identical and development isn’t static so as these data come in, we have to apply new lessons learned to the interpretation of risk assessment for subsequent programs,” she wrote.

The number of Americans with diabetes is expected to rise to as many as 1 in 3 adults if trends continue, according to the Atlanta-based Centers for Disease Control and Prevention.

New Drugs

This explosion in cases has spurred the development of at least nine classes of diabetes drugs, some oral and some injectable. Today there are more than 39 diabetes drugs on market, generating about $16.8 billion in U.S. sales in 2010, according to data from research firm IMS Health.

Only half of diabetes patients have their blood sugar under control, so there’s a need for new medications, said Martin Abrahamson, the chief medical officer of Joslin Diabetes Center, an affiliate of Harvard Medical School in Boston.

“Type 2 diabetes being a progressive disease, one drug, a single drug, is unlikely to be a control for glucose levels over many years,” Abrahamson said in a telephone interview. “Usually you add more medications to achieve glucose targets.”

Metformin, approved for use in the U.S. in 1995, is almost universally accepted as a first-line therapy for diabetes, because it has a long safety record and is cheap, Abrahamson said. Often, though, it’s not enough.

Many people with Type 2 diabetes are overweight or obese, and have co-existing conditions such as heart disease and high blood pressure, Abrahamson said. Complications associated with the disease also make prescribing tricky, he said.

Doctors Eager

Given the difficulty in controlling the disease, doctors remain eager for new medications, even though they are “becoming more gun shy” as dangerous risks are uncovered after the drugs are approved, said Robert Rushakoff, medical director for inpatient diabetes at the University of California, San Francisco.

“Given the reality of diabetes and how difficult it is, endocrinologists will be using it right away,” he said in an interview. “I know I’ll be using it right away. It’s easier than teaching someone to inject a medication. It’s a matter of once the drug moves out of studies, how those side-effects appear. More common, more severe or not a big deal?”

The data presented at the American Diabetes Association meeting in San Diego is expected to provide new details on dapagliflozin’s safety profile, said Tony Butler, an analyst with Barclays Capital in New York. He, like Miller Tabak’s Funtleyder, is unwilling to project sales at this point.

In the one-year study, dapagliflozin was linked to an increased likelihood of urinary tract and genital infections. While that’s a lesser concern than heart or cancer, it has raised red flags.

Rita Rastogi Kalyani an assistant professor of medicine at Johns Hopkins University in Baltimore, said the infections probably occur because the urinary tract is a more hospitable environment for bacteria when patients excrete more sugar in their urine.

“I think as much as we’re excited about new classes of medications, we’re still looking at the older medications first because they’ve been tested over time,” Kalyani said, referring to metformin. “We’ve seen an explosion of classes but we still don’t know about long-term risks.”

--With reporting by Bob Langreth in New York. Editors: Angela Zimm, Andrew Pollack

To contact the reporter on this story: Elizabeth Lopatto in New York at elopatto@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.


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