Post by mannmade on Nov 5, 2016 11:49:11 GMT -5
www.fool.com/investing/2016/09/19/this-diabetes-breakthrough-is-great-news-or-terrib.aspx
This Diabetes Breakthrough Is Great News or Terrible News, Depending on Your Perspective
Lexicon Pharmaceuticals' dual SGLT-inhibitor is making waves in the diabetes space, and numerous companies are feeling the ripple effects.
Sean Williams (TMFUltraLong) Sep 19, 2016 at 9:44AM
Woman With Glucometer Diabetes Testing Blood Getty
IMAGE SOURCE: GETTY IMAGES.
It may not be as deadly as cancer or heart disease, but diabetes was the seventh-leading cause of death in the United States as of 2014.
According to the American Diabetes Association 29.1 million people in the U.S. had diabetes as of 2012, some 8 million of whom were undiagnosed (more than 90% of all cases are type 2 diabetes, which develops over time). The combined direct and indirect costs of treating diabetes and the co-morbidities associated with it tallied $245 billion. While it may not be an immediate killer, it's a serious disease that has drugmakers to do everything they can to find a cure.
Choices aplenty for diabetics
Currently, you'll find no shortage of Food and Drug Administration-approved therapies to treat diabetes. One of the most common is Januvia, Merck's (NYSE:MRK) DPP-4 inhibitor to treat type 2 diabetes. In long-term cardiovascular studies Januvia was shown to be comparable to the placebo it was tested against (i.e., it didn't change the number of cardiovascular events to a statistically significant degree), and it's also a weight-neutral drug, which is a good thing, as type 2 diabetics are often overweight, which can lead to added complications.
Jnj Invokana Pic
IMAGE SOURCE: JOHNSON & JOHNSON.
But new type 2 diabetes challengers have emerged over the past three years. These new challengers -- Johnson & Johnson's (NYSE: JNJ) Invokana, AstraZeneca's (NYSE:AZN) Farxiga, and Eli Lilly (NYSE:LLY) and Boehringer Ingelheim's Jardiance -- are part of a new class of drugs known as SGLT-2 inhibitors. Instead of working through the pancreas and liver, as prior diabetes medications have, SGLT-2 inhibitors block the absorption of glucose in the kidneys, allowing patients to excrete excess glucose through their urine.
What's notably different about SGLT-2s is that they also demonstrated the intriguing side effects of weight loss and reduced systolic blood pressure. Again, with weight and hypertension being common issues among type 2 diabetics, this could give drugs such as Invokana, Jardiance, and Farxiga preference among physicians over the likes of Januvia.
Further setting the stage for the SGLT-2 drugs was the September 2015 data release from Eli Lilly and Boehringer Ingelheim detailing superior long-term cardiovascular outcome results for Jardiance in the EMPA-REG OUTCOME trial. Specifically, Jardiance led to a 32% relative reduction in all-cause risk of death. This was the first-ever long-term cardiovascular study in which a diabetes drug demonstrated superiority in reducing the risks of all-cause and cardiovascular-related death.
Could Lexicon's dual SGLT-inhibitor change the game?
However, last week an experimental drug from Lexicon Pharmaceuticals (NASDAQ:LXRX) made waves after it met its primary endpoint in a late-stage study for type 1 diabetes. Depending on your perspective as either a diabetic or as an investor, this is great or terrible news.
Lab Researcher With Blood Sampe Diagnostic Getty
IMAGE SOURCE: GETTY IMAGES.
The drug, known as sotagliflozin, is a brand-new SGLT-inhibitor. But instead of solely targeting SGLT-2 within the kidneys, it also targets SGLT-1 inhibitors located in the intestinal tract. Both inhibitors work to block glucose absorption, which should presumably lead to improved glycemic balance. Prior to late-stage studies, the question had been whether or not the addition of SGLT-1 to complement SGLT-2 would be worthwhile. The data suggests it is.
Top-line results from Lexicon's type 1 diabetes study showed an average A1C reduction of 0.43% from the baseline with a once-daily 200 mg dose and a 0.49% A1C reduction with a once-daily 400 mg dose. Comparatively, the placebo led to a 0.08% A1C reduction after 24 weeks of treatment. The statistically significant improvement met the study's primary endpoint and likely sets sotagliflozin up for an approval to treat type 1 diabetes.
The real intrigue, though, is how sotagliflozin will fare in late-stage studies to treat type 2 diabetes. One company that's especially intrigued is Sanofi (NYSE:SNY), which signed a licensing deal worth up to $1.7 billion with Lexicon last November for sotagliflozin in type 1 and 2 diabetes. Sanofi handed over $300 million up front to Lexicon, and it may have to pay up to $1.4 billion in development, regulatory, and sales-based milestones, as well as possible double-digit royalties, on sales of sotagliflozin if it's approved. Since type 2 diabetes would cover tens of millions of potential patients, Sanofi is counting on late-stage success to make its partnership worthwhile.
Self Portrait Personal Perspective Getty
IMAGE SOURCE: GETTY IMAGES.
Everything depends on your perspective
If you're a diabetic (type 1 or type 2), the success of sotagliflozin in its phase 3 trial for type 1 diabetes is encouraging. Sotagliflozin could provide differentiation from the SGLT-2 inhibitors, giving consumers a new option to fight diabetes. With an FDA approval in type 1 diabetes looking likely based on its phase 3 top-line data, all eyes can now turn to its late-stage type 2 diabetes trials.
Conversely, it's time for Merck and its shareholders to start sweating, as another new class of diabetes drugs could soon hit the market (assuming the type 2 diabetes success of sotagliflozin). With SGLT-inhibitors demonstrating favorable side effects relative to Januvia, they could begin putting pressure on Merck's volume, forcing the giant drugmaker to lift Januvia's price just to keep sales on par year-over-year.
Even Johnson & Johnson, Eli Lilly/Boehringer Ingelheim, and AstraZeneca have to be a bit worried about the early success of Lexicon's lead drug. It's possible that the aforementioned differentiation could eat into the sales of all three drugs.
Of course, SGLT-2 inhibitors have two key advantages that could keep their market share lead in type 2 diabetes secure. To begin with, they have the precedence of beating the dual-SGLT-inhibitor sotagliflozin to market (again, assuming FDA approval for type 2 diabetes). Physicians trust these medications, as do consumers, so we may not see much switching to sotagliflozin even if it makes it to pharmacy shelves. New diabetes patients, though, could be up for grabs.
More importantly, Jardiance's long-term cardiovascular outcomes study results are a feather in the cap for SGLT-2 inhibitors. Johnson & Johnson's Invokana is expected to release its long-term study data soon as well, and if it more or less mirrors the benefits produced by Jardiance, it's likely that SGLT-2s will retain substantial market share moving forward.
Everything comes down to perspective, but things are definitely heating up in the diabetes space.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, and check him out on Twitter, where he goes by the handle @tmfultralong.
This Diabetes Breakthrough Is Great News or Terrible News, Depending on Your Perspective
Lexicon Pharmaceuticals' dual SGLT-inhibitor is making waves in the diabetes space, and numerous companies are feeling the ripple effects.
Sean Williams (TMFUltraLong) Sep 19, 2016 at 9:44AM
Woman With Glucometer Diabetes Testing Blood Getty
IMAGE SOURCE: GETTY IMAGES.
It may not be as deadly as cancer or heart disease, but diabetes was the seventh-leading cause of death in the United States as of 2014.
According to the American Diabetes Association 29.1 million people in the U.S. had diabetes as of 2012, some 8 million of whom were undiagnosed (more than 90% of all cases are type 2 diabetes, which develops over time). The combined direct and indirect costs of treating diabetes and the co-morbidities associated with it tallied $245 billion. While it may not be an immediate killer, it's a serious disease that has drugmakers to do everything they can to find a cure.
Choices aplenty for diabetics
Currently, you'll find no shortage of Food and Drug Administration-approved therapies to treat diabetes. One of the most common is Januvia, Merck's (NYSE:MRK) DPP-4 inhibitor to treat type 2 diabetes. In long-term cardiovascular studies Januvia was shown to be comparable to the placebo it was tested against (i.e., it didn't change the number of cardiovascular events to a statistically significant degree), and it's also a weight-neutral drug, which is a good thing, as type 2 diabetics are often overweight, which can lead to added complications.
Jnj Invokana Pic
IMAGE SOURCE: JOHNSON & JOHNSON.
But new type 2 diabetes challengers have emerged over the past three years. These new challengers -- Johnson & Johnson's (NYSE: JNJ) Invokana, AstraZeneca's (NYSE:AZN) Farxiga, and Eli Lilly (NYSE:LLY) and Boehringer Ingelheim's Jardiance -- are part of a new class of drugs known as SGLT-2 inhibitors. Instead of working through the pancreas and liver, as prior diabetes medications have, SGLT-2 inhibitors block the absorption of glucose in the kidneys, allowing patients to excrete excess glucose through their urine.
What's notably different about SGLT-2s is that they also demonstrated the intriguing side effects of weight loss and reduced systolic blood pressure. Again, with weight and hypertension being common issues among type 2 diabetics, this could give drugs such as Invokana, Jardiance, and Farxiga preference among physicians over the likes of Januvia.
Further setting the stage for the SGLT-2 drugs was the September 2015 data release from Eli Lilly and Boehringer Ingelheim detailing superior long-term cardiovascular outcome results for Jardiance in the EMPA-REG OUTCOME trial. Specifically, Jardiance led to a 32% relative reduction in all-cause risk of death. This was the first-ever long-term cardiovascular study in which a diabetes drug demonstrated superiority in reducing the risks of all-cause and cardiovascular-related death.
Could Lexicon's dual SGLT-inhibitor change the game?
However, last week an experimental drug from Lexicon Pharmaceuticals (NASDAQ:LXRX) made waves after it met its primary endpoint in a late-stage study for type 1 diabetes. Depending on your perspective as either a diabetic or as an investor, this is great or terrible news.
Lab Researcher With Blood Sampe Diagnostic Getty
IMAGE SOURCE: GETTY IMAGES.
The drug, known as sotagliflozin, is a brand-new SGLT-inhibitor. But instead of solely targeting SGLT-2 within the kidneys, it also targets SGLT-1 inhibitors located in the intestinal tract. Both inhibitors work to block glucose absorption, which should presumably lead to improved glycemic balance. Prior to late-stage studies, the question had been whether or not the addition of SGLT-1 to complement SGLT-2 would be worthwhile. The data suggests it is.
Top-line results from Lexicon's type 1 diabetes study showed an average A1C reduction of 0.43% from the baseline with a once-daily 200 mg dose and a 0.49% A1C reduction with a once-daily 400 mg dose. Comparatively, the placebo led to a 0.08% A1C reduction after 24 weeks of treatment. The statistically significant improvement met the study's primary endpoint and likely sets sotagliflozin up for an approval to treat type 1 diabetes.
The real intrigue, though, is how sotagliflozin will fare in late-stage studies to treat type 2 diabetes. One company that's especially intrigued is Sanofi (NYSE:SNY), which signed a licensing deal worth up to $1.7 billion with Lexicon last November for sotagliflozin in type 1 and 2 diabetes. Sanofi handed over $300 million up front to Lexicon, and it may have to pay up to $1.4 billion in development, regulatory, and sales-based milestones, as well as possible double-digit royalties, on sales of sotagliflozin if it's approved. Since type 2 diabetes would cover tens of millions of potential patients, Sanofi is counting on late-stage success to make its partnership worthwhile.
Self Portrait Personal Perspective Getty
IMAGE SOURCE: GETTY IMAGES.
Everything depends on your perspective
If you're a diabetic (type 1 or type 2), the success of sotagliflozin in its phase 3 trial for type 1 diabetes is encouraging. Sotagliflozin could provide differentiation from the SGLT-2 inhibitors, giving consumers a new option to fight diabetes. With an FDA approval in type 1 diabetes looking likely based on its phase 3 top-line data, all eyes can now turn to its late-stage type 2 diabetes trials.
Conversely, it's time for Merck and its shareholders to start sweating, as another new class of diabetes drugs could soon hit the market (assuming the type 2 diabetes success of sotagliflozin). With SGLT-inhibitors demonstrating favorable side effects relative to Januvia, they could begin putting pressure on Merck's volume, forcing the giant drugmaker to lift Januvia's price just to keep sales on par year-over-year.
Even Johnson & Johnson, Eli Lilly/Boehringer Ingelheim, and AstraZeneca have to be a bit worried about the early success of Lexicon's lead drug. It's possible that the aforementioned differentiation could eat into the sales of all three drugs.
Of course, SGLT-2 inhibitors have two key advantages that could keep their market share lead in type 2 diabetes secure. To begin with, they have the precedence of beating the dual-SGLT-inhibitor sotagliflozin to market (again, assuming FDA approval for type 2 diabetes). Physicians trust these medications, as do consumers, so we may not see much switching to sotagliflozin even if it makes it to pharmacy shelves. New diabetes patients, though, could be up for grabs.
More importantly, Jardiance's long-term cardiovascular outcomes study results are a feather in the cap for SGLT-2 inhibitors. Johnson & Johnson's Invokana is expected to release its long-term study data soon as well, and if it more or less mirrors the benefits produced by Jardiance, it's likely that SGLT-2s will retain substantial market share moving forward.
Everything comes down to perspective, but things are definitely heating up in the diabetes space.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, and check him out on Twitter, where he goes by the handle @tmfultralong.
