Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



J&J Beats a Blockbuster

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Johnson & Johnson (NYSE: JNJ  ) looks to have registered a solid win at the American Diabetes Association meeting. Beating a $4.7 billion franchise will do that.

The health-care conglomerate's drug, canagliflozin, had a greater effect on blood glucose levels than Merck's (NYSE: MRK  ) multibillion-dollar drug Januvia. Canagliflozin also beat an older generic called glimepiride.

Canagliflozin also produced significant weight loss compared with the other drugs, which is a welcome benefit since obesity is one of the contributing factors to developing diabetes.

Johnson & Johnson has already submitted a marketing application to the Food and Drug Administration for approval of canagliflozin. Based on the data so far, it looks like the drug has a very good shot of getting approved.

The only concern investors should have is that canagliflozin is a SGLT2 inhibitor, the same class as Bristol-Myers Squibb (NYSE: BMY  ) and AstraZeneca's (NYSE: AZN  ) dapagliflozin. The FDA rejected dapagliflozin earlier this year after a few patients taking dapagliflozin in the clinical trials got bladder and breast cancer. There are no signs of a cancer risk for canagliflozin, but since dapagliflozin and canagliflozin are the first two SGLT2 inhibitors developed, it's hard to know  whether the FDA will be worried about whether the cancer risk is specific to dapagliflozin or a class effect.

If canagliflozin gets past the FDA, it should have blockbuster potential. The clinical trial data should help it compete against Januvia and being first in class means it can set the bar for other SGLT2 inhibitors.

The one downside for marketing is that canagliflozin increases the need to urinate because it works by blocking the reabsorption of glucose in the kidneys, which causes the sugar to be excreted in the urine. Januvia, on the other hand, has a very clean side-effect profile, one of the main reasons the drug has sold so well, so capturing the Januvia market might not be all that easy for Johnson & Johnson. Initially I wouldn't be surprised to see canagliflozin used as a second-line branded therapy for patients who can't reach their blood glucose goal on Januvia or Takeda's Actos at least until doctors gain experience prescribing the drug.

Of course, first Johnson & Johnson has to get canagliflozin approved. At least investors can collect a solid dividend while they wait. If you're looking for other dividend options, take a look at a select group of dividend companies Fool analysts believe are good buys in this new report: "Secure Your Future With 11 Rock-Solid Dividend Stocks." You can get your copy for free.

Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson and creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1910640, ~/Articles/ArticleHandler.aspx, 10/26/2016 7:25:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 10 hours ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
JNJ $113.96 Up +0.35 +0.31%
Johnson and Johnso… CAPS Rating: ****
MRK $61.95 Up +1.20 +1.98%
Merck and Co. CAPS Rating: ****
AZN $29.79 Down -0.29 -0.96%
AstraZeneca CAPS Rating: ****
BMY $49.55 Up +0.32 +0.65%
Bristol-Myers Squi… CAPS Rating: ****