(Updates with closing share price in sixth paragraph.)
Jan. 19 (Bloomberg) -- Bristol-Myers Squibb Co. and AstraZeneca Plc failed to win U.S. clearance to sell the first in a new class of experimental diabetes pills as regulators sought more data on the medicine’s safety.
The Food and Drug Administration is seeking data from current studies of the treatment, dapagliflozin, in adults with Type 2 diabetes and may require new clinical trials to better assess the risks and benefits, the companies said today in a statement. Bristol-Myers, based in New York, and London-based AstraZeneca remain committed to the drug, they said.
The decision reflects the heightened regulatory scrutiny of diabetes pills since GlaxoSmithKline Plc’s Avandia was tied to heart attacks in 2007 and was later forced off the market in Europe and restricted in the U.S. Advisers to the FDA said in July dapagliflozin’s benefits don’t outweigh risks of bladder and breast cancer. The FDA in October delayed a ruling by three months while asking the companies to submit more trial data.
“While not a major financial contributor for either company, dapagliflozin’s delay will likely be viewed as a setback nonetheless,” Tim Anderson, an analyst at Sanford C. Bernstein & Co. in New York, said in a report to clients today. He rates both stocks “market perform.”
Analysts predict dapagliflozin sales of $562.7 million in 2016 for Bristol-Myers and $164.5 million for AstraZeneca, according to estimates compiled by Bloomberg.
AstraZeneca lost 1.3 percent to close at 3,070 pence in London. Bristol-Myers fell 3 percent to $32.71 in New York.
The drug would be the first in a new class of treatments called SGLT2-inhibitors that work by letting patients excrete excess blood sugar in their urine. Johnson & Johnson, Eli Lilly & Co., Boehringer Ingelheim GmbH, and Astellas Pharma Inc. are among companies pursuing similar drugs.
The FDA decision adds to the pressure on AstraZeneca to develop new medicines. The company, the U.K.’s second-biggest drugmaker, announced on Dec. 20 the end of development of olaparib for ovarian cancer and said another drug for depressive disorder failed to meet the main goal of an advanced study.
AstraZeneca needs new products to replace revenue after two of its biggest-selling drugs, Nexium for ulcers and antipsychotic medication Seroquel, lose patent protection by 2014. Nexium and Seroquel generated a total of $10.1 billion of sales last year and accounted for 20 percent of revenue, according to estimates compiled by Bloomberg.
“There’s really not much there in the pipeline that’s particularly compelling,” said Mark Belsey, an analyst at WestLB AG in London, by e-mail. “It still feels like there’s a big hole in terms of new products.” He has a “reduce” rating on AstraZeneca shares.
While FDA staff members said dapagliflozin is effective in reducing blood sugar, they focused on safety concerns in a preliminary review of the drug on July 15. The agency had been scheduled to decide on the drug by Jan. 28.
Nine cases of bladder cancer occurred in male patients who took dapagliflozin in clinical trials, compared with one case among people treated with a placebo, FDA staff said in their report. Breast cancer occurred in nine patients who took the new drug, and one in the control group.
The agency reviewers also cited possible liver risks among dapagliflozin’s “unexpected safety issues,” and found that the drug’s effectiveness waned in patients with moderate or severe kidney impairment.
Given cancer risk and liver toxicity, it’s unlikely AstraZeneca will conduct another costly clinical trial, Belsey said.
AstraZeneca is evaluating the FDA’s letter, said Esra Erkal-Paler, a spokeswoman for AstraZeneca, in a telephone interview today.
“It’s quite likely we will try to meet with the FDA within the next three months,” she said. Regarding a new clinical trial, “we need to wait and talk with the FDA to see what the next appropriate step is that we need to take.”
An estimated 346 million people worldwide have diabetes, and 90 percent have the Type 2 form, according to the World Health Organization. Diabetes occurs when the pancreas doesn’t produce enough insulin or use it effectively to regulate blood sugar. Over time the elevated levels of blood sugar can damage nerves and blood vessels and can increase the risk of heart disease, stroke and kidney damage.
Dapagliflozin has been shown in studies to help patients lose weight and lower blood pressure. Older diabetes drugs either reduce blood-sugar levels or increase production of insulin, a hormone needed to convert sugar into energy.
--With assistance from Drew Armstrong in New York. Editors: Phil Serafino, Thomas Mulier
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