Amylin Pharmaceuticals CEO Dan Bradbury was brimming with enthusiasm at the JP Morgan Healthcare Conference one year ago. San Diego-based Amylin (NASDAQ: AMLN) was psyched about what many analysts thought was a slam-dunk FDA approval for the first diabetes drug that can be injected just once a week.
Last week at the same conference, Bradbury was his usual upbeat self. But the message now is about keeping the ship steady for another year and half before his team can really fire away with the product that represents the future of the company, exenatide once-weekly (Bydureon).
“We need to look after our economic future with our existing products-Byetta and Symlin, and continue to manage our expenses appropriately so we can give ourselves the opportunity to benefit from the Bydureon launch,” Bradbury said during an interview last week at the JP Morgan confab.
Bradbury acknowledged that it took a week or two for the company to get over the shock it suffered in October, when the FDA refused to approve the new diabetes drug. Regulators insisted that the company provide more data on the drug’s effect on heart rhythms. “We were so surprised, and so disappointed,” Bradbury says. “But internally, our resolve has only gotten greater.”
The problem of diabetes certainly isn’t going away anytime soon. One month after the FDA dealt Amylin and its partners Eli Lilly and Alkermes the setback on Bydureon, UnitedHealth Group issued a report saying it expects about half of all Americans to have diabetes or pre-diabetes by the end of this decade. This chronic condition, in which people fail to properly control their blood sugar, leads to a host of symptoms that will cost the U.S. about $3.4 trillion in the 10 years through 2020, according to UnitedHealth, the nation’s largest health insurer. You can expect Bradbury to talk more about this growing health problem, and what drugmakers need to do to combat it, at the next Xconomy event, “San Diego’s Fight Against Diabesity” coming up on January 27th.
I’m sure Bradbury would love to take a victory lap at this event, but as it stands, the conversation will be more about how companies can cope with tough new scrutiny from the FDA toward diabetes treatments. The agency was burned by past safety controversies with GlaxoSmithKline’s rosiglitazone (Avandia) for diabetes and Abbott Laboratories’ sibutramine (Meridia). The news for most diabetes and obesity drugmakers has been bleak. Not just Amylin, but San Diego-based Arena Pharmaceuticals (NASDAQ: ARNA), Mountain View, CA-based Vivus (NASDAQ: VVUS), and Valencia, CA-based MannKind (NASDAQ: MNKD) have all been dealt painful setbacks at the FDA lately. San Diego’s Orexigen Therapeutics (NASDAQ: OREX) won a positive recommendation from an FDA advisory panel last month, but is still awaiting official word on whether its obesity drug is ready for sale in the U.S.
The biggest job at Amylin this year will be putting together the data the FDA asked for on QT prolongation, an effect in which some drugs cause irregular heart rhythms. Then it will have to re-submit an amended application, and wait as much as six months for the agency to complete its review, Bradbury says.
Bradbury insists he’s confident Bydureon will eventually win the green light from the FDA to enter the U.S. market. It would be horrible if it didn’t—the company has run five pivotal clinical trials to demonstrate its effectiveness, and invested in a new factory in Ohio that cost $500 million. Assuming the drug starts generating sales in the fourth quarter of 2012, it could reach $1 billion in U.S. sales in 2015, according to Thomas Russo, an analyst with Robert W. Baird, in a note to clients on November 5.
That’s a long time to wait for the big bucks that Amylin thought would already be flowing in now. But Bradbury says the company has basically been operating at cash-flow break even, and he doesn’t foresee the need to make any major layoffs after making a couple big rounds of cuts in November 2008 and May 2009.
Instead of getting his troops fired up to sell the first once-weekly injection for diabetes, Bradbury says Amylin needs to concentrate for now on finding some new areas of growth for its older drugs—the original twice-daily injection of exenatide (Byetta) and pramlintide (Symlin). In particular, the company’s 325-person sales force will concentrate on getting Medicare to cover more aging patients who use Byetta, Bradbury says.
Much of the effort will be defensive, rather than offensive. Denmark-based Novo Nordisk, the world’s largest maker of diabetes medicines, won FDA approval last January for liraglutide (Victoza), as a new member of the same GLP-1 class of drugs that Byetta is part of. Novo’s product is taken as a once-daily injection, which means fewer needle sticks than what is required with the twice-daily Amylin drug.
Victoza, the new challenger, has been gaining market share against the older Amylin drug. And the regulatory delay for Amylin gives Novo more time to make inroads with patients as they wait for FDA approval of the once-weekly injection (Bydureon). The original Byetta still has about two-thirds of the market share, while Victoza has grabbed about one-third at last count, Bradbury says. The focus of the sales force is in maintaining market share among loyal patients and doctors, and taking some market share back in new populations, like the Medicare group, Bradbury says.
There were a few other things Bradbury wanted to talk about, which I’m sure are of less interest to shareholders and the biotech industry at large. The company is still working on getting the right formulation of metreleptin and pramlintide which can go into Phase III clinical trials for obesity, as part of a partnership with Takeda Pharmaceuticals. Amylin has now formally sought FDA approval of leptin as a treatment for an extremely rare fat disorder known as lipodystrophy. And the company plans to introduce a new drug into clinical trials by the end of this year that connects two peptides together into a single molecule, an internal research project that builds on years of Amylin’s experience, Bradbury says.
If Bradbury is right, and Amylin does go on to win FDA approval of Bydureon sometime in 2012, then it will have the kind of cash flow and market valuation to push ahead with even more ambitious R&D projects to fight diabetes and obesity. But for now, this sounds a lot like hunker-down time. He even joked that while he hopes to win FDA approval of Bydureon, “hope is not a strategy.”
Now it will really take something more like steely determination, which Bradbury says is in the company DNA. “Amylin has always been a very resilient company,” he says.
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