FDA Approves New Diabetes Drug, Byetta
The FDA has approved Byetta, a new diabetes treatment. Unfortunately, it has to be injected, which may scare off some potential beneficiaries.
New diabetes drug from Lilly, Amylin approved (CNN/Money)
A new diabetes treatment from Eli Lilly and Amylin received approval from the Food and Drug Administration Friday, but analysts believe sales might be lackluster because of something most patients don’t like: needles. “The issue here is how many people are willing to take a twice a day injection,” said Scott Henry, analyst for Oppenheimer & Co. “If someone says you can take a pill or shoot yourself with a needle twice a day, the pill is starting to look pretty good.”
Byetta, which was co-developed by both companies, improves blood sugar control in patients with type 2 diabetes, according to Amylin Pharmaceuticals (down $1.65 to $16.53) and Eli Lilly and Co (up $0.03 to $58.03,). It will available June 1 for patients who aren’t getting enough insulin through oral medication, the companies said. Amylin stock prices dropped on the news, while Eli Lilly stock edged higher.
The market potential, though, is huge. There are 18.2 million diabetics in the U.S., according to the American Diabetes Association. But analysts are concerned that many patients with type 2 diabetes, which is less serious than type 1, won’t happily switch to injectable treatments. “The issue in getting patients from oral medicine to injectable is that there is less of a desire to use the product,” said David Moskowitz, analyst for Friedman, Billings, Ramsey & Co. “The uptick could be slow initially.”
Great news. Obviously, one would prefer pills to shots. Still, most people with advanced diabetes are sticking themselves constantly to monitor their blood sugar. Surely, a couple shots to save their lives would be worth the discomfort.
Update: Some explanation for why Amylin’s stock is down:
Side-Effect Talk Floors Amylin Shares (The Street)
Amylin Pharmaceuticals execs jumped for joy after regulators cleared their new diabetes drug, but some investors clearly didn’t share their enthusiasm. Amylin shares slumped 6.6% Friday after the San Diego-based biotech and partner Eli Lilly secured Food and Drug Administration approval of their co-marketed diabetes drug, Byetta.
Mark Schoenebaum of Bear Stearns is concerned that “twice-daily injections and [side effects such as] nausea will be a hindrance to rapid adoption and that the upper end of Street expectations will need to be reined in.” Bear Stearns says it’s a market maker in Amylin’s securities. On the other hand, another analyst says concerns over side effects such as nausea and hypoglycemia are exaggerated. Lei Zhong, senior biotechnology analyst at Natexis Bleichroeder, explains Amylin’s drop as a “typical day of shorts coming into play” in the biotech sector.
Although Amylin says Byetta isn’t intended to be used instead of insulin, Zhong wouldn’t rule out approval for such use in the future. With the possibility of a weekly injection of exenatide instead of multiple daily injections of insulin, he says Byetta could be a billion-dollar franchise. Natexis Bleichroeder says it receives no investment-banking compensation related to its research coverage.
In its conference call Friday, the company said that trial data show that 75% of Byetta patients had nausea for less than two weeks. The drug is delivered by an injection pen holding 30 days’ worth of the solution. The pens come with 5 microgram and 10 microgram doses, and Amylin says doctors should start patients on the 5 microgram dose and, if needed, increase dosage after a few months, suggesting the necessity to control nausea.
Interesting. And it’s a pen injection once every 30 days, not a needle twice a day? I think I’d prefer that to having to remember to take a pill every day, to be honest.