Big Day for Big Pharma

Big Day for Big Pharma

While the markets are digesting the news of Pfizer’s (NYSE:PFE) announcement to halt further development of Torcetrapib and sorts out just what the company will do next. Another large pharmaceutical company GlaxoSmithKline (NYSE:GSK) was making their case for the Avandia franchise. These two events although involving different disease states do have an impact on the diabetes sector, if albeit for different reasons.

First let’s take a look at what Glaxo had to say today and while they did their best to characterize the data as groundbreaking, Diabetic Investor believes the data creates more questions than answers. The data released today came from the ADOPT trial (A Diabetes Outcome Progression Trial). The study was designed as head-to-head comparison of Avandia, metformin and glyburide on the improvement/maintenance of glycemic control in patients recently diagnosed with T2D. The study involved 4360 patients in 488 sites in North America and Europe. These patients were considered newly diagnosed as they were less than 3 years from diagnosis. The outcome was established as monotherapy failure, which was defined as confirmed fasting plasma glucose (FPG) greater than 180 mg/dl. With even looking into the data the design of the study sends up multiple red flags.
1. 1. Why use FPG as the primary endpoint when everyone knows that A1C is the gold standard for measuring outcomes?
2. 2. With combination therapy becoming the standard for treating type 2 diabetes are the results even relevant? This is especially important when the new guy on the block, Januvia from Merck (NYSE: MRK) has set built their marketing strategy as a safer alternative to the TZD’s. (More on this later.)

So what did the results tell us? Some things we already knew and some things we didn’t know but hardly encouraging. It is already well known that patients on Avandia have higher incidences of edema and weight gain, something that showed up in the results of ADOPT. New to use was the fact that patients on Avandia, in particular women, had a higher incidence of fractures, more specifically fractures in lower and upper limbs. While the company tried to make the best of the news they did mention this issue deserves further study.

What the company tried to sell was three basic points:

A. A. Avandia improves insulin sensitivity better than metformin and glyburide
B. B. Avandia maintained Beta cell function better than metformin and glyburide
C. C. Avandia kept patients at better control over a longer period of time

According to an editorial in the respected New England Journal of Medicine the company failed to make its case. Written by David M. Nathan, M.D. the editorial states’ “The durability of glycemic control in the rosiglitazone (Avandia) group was robust in comparison with that in the glyburide group; however, it was modest in comparison with the durability in the metformin group.” Dr. Nathan went on to state, “The hope that thiazolidinediones may affect the underlying pathophysiology of type 2 diabetes by protecting beta cell function and may alter the course of the disease is only weakly supported by ADOPT.” He goes on and concludes; “The authors conclude that the “relative costs of these medications, their profiles of adverse events, and their potential risks and benefits” should be considered in choosing among them. Given the modest glycemic benefit of rosiglitazone (with the risk of fluid retention and weight gain) and higher cost (including the need for more statins and diuretics), metformin remains the logical choice when initiating pharmacotherapy in type 2 diabetes.”

The company did present some compelling data that Avandia could be used to prevent the development of type 2 diabetes and with 41 million Americans being classified as having pre-diabetes it’s easy to understand why the company would bring this data to light. However the jury is still out if physicians should be prescribing drugs for a condition that does not yet exist. It’s equally unclear with all the attention to healthcare costs if private payors would provide reimbursement for a preventive therapy when there are other less costly alternatives to Avandia.

The company did address the issue of DPP-4’s entering the market with the tried and true approach of although the drugs look OK; there is much we don’t know yet. Based on the prescription data for Januvia, now six weeks into it’s launch, physicians don’t seem too concerned about what might happen long term. Diabetic Investor also believes GSK has given Merck reps even more ammunition with the facture issue for women. Based on its impressive launch physicians are buying Merck’s sales pitches that Januvia is a safer alternative to TZD’s. With the majority of physicians moving towards combination therapy they are looking for combinations that offer both decent control and as few side effects as possible. Based on all the available data it appears although Januvia may not work as well as TZD’s in combination with metformin, it works well enough and the lack of adverse events places the drug ahead of TZD’s when it comes to selecting a compliment to metformin.

With 3600 sales reps and new data in their hands GSK stated they were treating these results as if this was a new drug launch. Given Januvia’s strong start and questionable results from the ADOPT study Diabetic Investor sees the early rounds of this heavyweight battle going to Merck.

Turing our attention to the Pfizer news were reminded of the old saying that one mans misery is another’s opportunity. This just might be the case as rumors are rampant over how the company plans to make up for the loss of Torcetrapib. With Lipitor and its $14 billion in sales coming off patent sometime before 2011 and a rather weak pipeline many are speculating that the company will revitalize their future prospects by making an acquisition. Although the initial speculation centers in company’s that would compliment Pfizer’s cholesterol franchise, let us not forget the company’s stated comments for wanting to become a player in the diabetes market. Exubera’s failure aside, it is difficult to imagine the company not even attempting to play in a space their major competitors are fiercely fighting over.

From a timing perspective Lipitor’s patent expiration comes shortly after the long acting version of Byetta is on the market. As Diabetic Investor has stated on several occasions this drug has mega-blockbuster potential and while we doubt it would hit the $14 billion mark that Lipitor has achieved, it will still be a multi-billion dollar drug.

Going back the GSK announcement just for a moment, it was interesting to note that data could actually help Byetta sales as all the existing oral medications used alone or in combination are at best weight neutral. Given Byetta’s proven ability to produce solid outcomes and progressive weight loss, the GSK study just might remove all doubts in physicians mind that when it comes to add a drug, Byetta makes the most sense.

Finally, it should be noted that barring a mega deal, Pfizer has the financial strength to acquire more than one company.

David Kliff
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