Amylin, Alkermes Once-Weekly Diabetes Drug Fails to Win FDA Approval
Bad news out tonight for followers of San Diego-based Amylin Pharmaceuticals, drug giant Eli Lilly, and Waltham, MA-based Alkermes.
The new diabetes drug that all three companies have been counting on as a future revenue driver—the once-weekly injectable version of exenatide (Bydureon)—failed to win clearance from the FDA as a new treatment available for sale on the U.S. market. The regulatory agency is asking for a thorough new study on QT rhythm, which would look at whether the drug is connected to irregular heartbeat in trial patients. The message came in the form of a complete response letter, a few days ahead of the FDA’s Oct. 22 statutory deadline to finish its review of the new drug application.
The issues raised in the complete response letter, which Amylin (NASDAQ: AMLN), Lilly (NYSE: LLY) and Alkermes (NASDAQ: ALKS) described in a joint statement, are not the sort of garden variety technical issues that the companies can fix overnight to satisfy the FDA. The agency is asking for additional results on the safety and effectiveness of the drug from a trial called Duration-5. The latest FDA letter doesn’t contain any reference to manufacturing, or risk-mitigation strategy issues that were raised in a previous regulatory letter back in March. Based on the latest regulatory questions, the companies hope to gather all the data for a re-submission “by the end of 2011.”
“We are committed to working closely with the FDA to resolve the issues raised in the complete response letter so that Bydureon can be approved,” said Amylin’s chief medical officer, Orville Kolterman, in a statement.
This FDA setback is a big deal not just for the companies involved, but has to be a chilling signal for anybody developing diabetes drugs. The agency has been bombarded with controversy over its decision to approve GlaxoSmithKline’s rosiglitazone (Avandia), which went on to generate billions in sales before an analysis by Cleveland Clinic cardiologist Steven Nissen found that it was linked to increased heart risks. Last month, the drug was taken completely off the European market, and was subjected to severe restrictions in the U.S.
This latest round of controversy occurred at the worst possible time for Amylin, Lilly, and Alkermes. Amylin, as I pointed out in a story last week, has the most at stake in the FDA’s decision, since it only has two other approved products and the new drug is supposed to be its product of the future. But Alkermes is also losing out on a substantial revenue stream, since it stands to collect an 8 percent royalty on worldwide sales of the drug, without having to pay expenses for marketing or manufacturing. JP Morgan analyst Cory Kasimov has forecasted that the drug—which seeks to replace a twice-daily injection with a once-weekly shot—has potential to generate peak worldwide sales of about $2 billion in 2017. Demand for new diabetes treatments is surging as an estimated 25 million people in the U.S. suffer from the disease, and incidence is expected to climb for years as more and more people develop complications from obesity.
This news broke in the evening on the East Coast, after a lot of investors had gone home for the day. There will be a lot of angry fallout tomorrow, and a lot of people adjusting sales models to erase any Bydureon revenues analysts may have been counting on in 2010 and 2011.
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