Busy Day in Diabetes
This morning got off to a rousing start when we learned that the FDA has issued a new PUDFA for Bydureon™. According to a jointly issued press release; “Amylin Pharmaceuticals, Inc. (Nasdaq: AMLN), Eli Lilly and Company (NYSE: LLY) and Alkermes, Inc. (Nasdaq: ALKS) today announced that the U.S. Food and Drug Administration (FDA) has classified the BYDUREON™ (exenatide for extended-release injectable suspension) complete response as a Class 2 resubmission and assigned a new Prescription Drug User Fee Act (PDUFA) action date of October 22, 2010.”
Diabetic Investor is not surprised the FDA classified this as a Class 2 resubmission as we believe the agency wants plenty of time to review all the data. We also believe the Street as usual is overacting to this news as hoping for a Class 1 classification was overly optimistic given what went on with Victoza®. Our overall take on this is that the agency is seeking to approve Bydureon without a black box warning and wants to make sure they thoroughly review the data to insure this is the proper course of action.
It’s interesting that shares of Novo are also taking a hit today when this is actually good news for Novo as it gives them more time to establish Victoza in the market. The reality is even if Bydureon receives the same warning as Victoza it won’t stop physicians from prescribing the drug. As we noted in our AACE follow up most endocrinologists understand that the thyroid cancer risk is very low and the majority do not believe either Victoza or Bydureon causes thyroid cancer. While the warning will likely slow adoption by primary care providers initially these fears will dissipate over time as these drugs are just too powerful to ignore.
Also this morning we learned that Home Diagnostics and CellNovo have signed an agreement. According to a jointly issued press release; “CellNovo, a London-based medical device company, and Home Diagnostics, Inc., a leader in diabetes products, today announced a strategic alliance that involves integrating technologies and developing distribution opportunities for CellNovo insulin patch pumps.
The partnership allows both companies to accelerate their growth and has the potential to transform the pump industry. The first phase of the agreement calls for the inclusion of Home Diagnostics TRUE™ blood glucose technology in the CellNovo wireless mobile handset. The companies will also begin exploring ways to leverage Home Diagnostics’ distribution network to expand CellNovo presence in the United States and other countries.”
Diabetic Investor sees this as the classic win-win agreement as CellNovo needs distribution and HDI wants to sell more test strips and as we have noted numerous times no one uses more test strips than an insulin pump patient. It wouldn’t surprise Diabetic Investor at all given HDI’s relationship with retailers like Walgreens (NYSE:WAG) and CVS/Caremark (NYSE:CVS) if one day we see a branded insulin pump. A pump that one day will allow seamless communication between the device, physician, pharmacist, diabetes educator and managed care provider. There is no question that the entire diabetes device arena is moving towards greater connectivity as everyone sees this as an effective way to improve outcomes. Frankly the technology already exists to make this connectivity possible; the real issues are who will use all this data and most importantly how will everyone get paid.
Speaking of getting paid one company that continues to perform very well is Dexcom (NASDAQ:DXCM) who reported earnings yesterday. In a somewhat surprising move the company announced they had field a PMA-S for integrating their device with the OmniPod. Based on previous public comments made by Insulet (NASDAQ:PODD), who reports earnings later today, this filing was delayed as Insulet was waiting for the new Omni test strip from Abbott (NYSE:ABT) to be approved by the FDA. (The Omni will be replacing the current FreeStyle strip and does not use the GDH-PQQ enzyme.) Diabetic Investor has learned that while the Omni is still waiting approval the FDA has enough data on the strip which will be included with the Dexcom filing. This is good news for Dexcom and Insulet as another filing won’t be needed when the Omni is finally approved.
Other than this somewhat surprising announcement Dexcom calls have become fairly predictable. Although the first quarter is typically the worst the quarter for system placements, the company continues to add patients at a nice rate. Reimbursement continues to improve while physicians and patients recognize that Seven Plus system outperforms both Navigator and Guardian from Medtronic (NYSE:MDT). Once Dexcom completes integration with the Animas insulin pump, which according to the company should happen before the end of this year, Dexcom will have relationships with the two of the three major insulin pump companies.
Dexcom should get another shot in the arm when Abbott finally pulls the plug on Navigator and gives this troubled product the proper funeral it deserves. While Medtronic still has the size advantage over Dexcom, the gap is closing and the Insulet and Animas additions will close this gap even further. Dexcom has the added advantage with their hospital based unit. As Diabetic Investor noted earlier this week we see CGM as vital tool in the hospital and Dexcom is clearly the leader here. There’s no doubt that Dexcom shareholders will one day will be richly rewarded as this one well run company just waiting to be acquired by one of the big boys.
