Warning: Potential Blockbuster Ahead

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It's a little early to call it, but it looks like Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN) have a potential blockbuster on their hands.

Their new diabetes drug, dapagliflozin, seems to work pretty well when combined with metformin, a standard of care for type 2 diabetics. In a six-month trial, at all the doses tested, the drug was able to lower HbA1c levels -- a measure of long-term glucose levels -- better than placebo.

Dapagliflozin is in a new class of diabetes medications that inhibits the kidneys from moving glucose back into the bloodstream, and thereby lowers the glucose levels in diabetics. With a new mechanism of action, there's always concern that side effects might crop up, but so far everything looks OK.

If dapagliflozin has another successful clinical trial and wins approval, it'll enter a pretty crowded market. But I think there's room, especially if it can be used as an add-on therapy with a popular drug such as Merck's (NYSE: MRK) Januvia. The companies could also be bold and combine the new drug with their recently approved diabetes drug, Onglyza, which might help the latecomer compete against Januvia.

If new oral medications are developed that can help slow the progression of the disease, the clear losers will be companies making insulin and other injectable drugs, like Amylin Pharmaceuticals' (Nasdaq: AMLN) and Eli Lilly's (NYSE: LLY) Byetta and Novo Nordisk's (NYSE: NVO) Victoza. These treatments are typically used later in the disease's progression, after oral drugs are no longer capable of keeping glucose levels down.

It'll probably be another year before the companies file for marketing approval, putting a potential approval in 2011. The drug's still worth keeping an eye on, though, whether you're invested in Bristol-Myers, AstraZeneca, or one of the makers of rival diabetes treatments.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Novo Nordisk is a Motley Fool Global Gains selection. The Fool has a disclosure policy.

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  • Report this Comment On October 02, 2009, at 6:53 PM, kevinmik wrote:

    If Dapagliflozin becomes a Blockbuster, then Exenatide Once Weekly should achieve Mega Blockbuster status.

    Dapagliflozin doesn't come close to matching Exenatide Once Weekly overall efficacy and safety benefits and just as Exenatide Once Weekly soundly beat Januvia, Actos, Avandia and Lantus in superiority studies conducted by Amylin and Lilly, the same will hold true when and if Amylin and Lilly conducts a superiority study pitting Exenatide Once Weekly vs. Dapagliflozin. If you notice Amylin and Lilly are the only companies confidant enough to conduct superiority studies for Exenatide Once Weekly against every other approved diabetes drugs in the marketplace and that is for a very good reason, Exenatide Once Weekly is potentially the best ever diabetes drug ever developed and will revolutionize the treatment of diabetes just as Insulin did when it was first introduced 80 years ago. Exenatide Once Weekly offers solid tripe threat efficacy benefits like lowering HbA1c, Weight Loss and Improved Cardiovasular markers. It is also the first ever once weeky drug to be approved for diabetes ever. If you just compare Dapagliflozin modest HbA1c reduction result of .5% compared to Exenatide Once Weekly's almost 2.0% HbA1c reduction, not to mention only 33% of the patients in the Dapagliflozin study achieved an HbA1c reduction below 7%, compared to 70% of the Exenatide Once Weekly patients achieving an HbA1c level below 7%. Lastly cardiovascular side effects is a key focus for the FDA for new diabetes drugs going up for review and Dapagliflozin will have to go through extensive clinical trial testing before it can go up for review. The big winner and the future of diabetes care is going to be Exenatide Once Weekly. 52 treatments an year which will deliver some of the best efficacy benefits ever seen in a diabetes drug "Exenatide Once Weekly."

    Regards

    Kevinmik

  • Report this Comment On October 07, 2009, at 9:44 PM, Bpill38 wrote:

    Mr Orelli,

    As an investor It drives me crazy to read most articles posted by someone who truely lacks the real indepth knowledge of the pharma industry. Dapagliflozin is just another weak oral drug to treat diabetes. I would ask you to dig a little deeper into your subject and include a broader picture of whats going on in the overall drug market. First learn how to use your internet search engine if you had done so you would find loads of information about patient compliance, branded prescription drug decline, generic disease information... just to start. You can find 100's of articles showing that on average about 33% of patients make it to there 4th Rx refill so Dapagliflozin could be the gratest drug in the world but most patients won't ever really take the drug long enough to see it benefits. So its safe to say a drug like Byetta LAR (QW)(QW Brian means once a week) will be a blockbuster simple based on its 4 times a month dosing (there are GLP1 studies with once a month dosing). Now with that said I would like to go to the heart of Diabetes and its to core defects ... Obesity induced insulin resistance(the bodys inability to utilize its own insulin), and beta cell dysfunction(reduced insulin production) Dapagliflozin affects neither therefore it slows the progression of diabetes. However Byetta address' both of these defects by inducing weight loss, and it protects and preserves beta cell function literally altering the disease progression... no other drug in diabetes works like it.. according to your own admission doctors wait to the end of of the orals before choosing an injectable. What a scientific blunder by the time a patient is diagnosed with diabetes they have lost 50% of there beta cell function if they wait to fail all of your so called block buster orals there down to virtually N0 insulin production... but at least theres insulin and all the baggage that comes with it like finger pricks, huge amounts of weight gain (just what a diabetic needs more insulin resistance), and potentially life threatning Hypoglycemia...By the way most diabetic patients don't die of hyperglycemia, they die from co-morbities like hypertension, hyperlipdemia (for you Brian thats high blood pressure, and high cholestoral) thats part of why the FDA wants to see cardiovascular data for all of these new diabetes drugs (are they going to cause heart disease or help reduce heart disease). Byetta reduces adipose tissue, and or viseral fat which helps it reduce the above formentioned... I could go on for hours. You Brian do your research in the backgrounds of common drugs to treat diabetes like sulfs, TZDs, mets, DPP4 inhibitors try to unerstand there strengths and weakness'.

    In the end I'm only asking that you do your homework.

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