Is the failure of Onglyza the driving force behind the pursuit of Amylin?
There is certain amount of irony that the two companies most often mentioned as a possible buyer of Amylin (NASDAQ:AMLN) are also partners on Onglyza®. Based on various media Bristol Myers Squibb (NYSE:BMY) has already made a bid for Amylin and was rejected by the company. Other reports indicate that AstraZeneca (NYSE:AZN) is planning to make a bid for the company. Given that these two companies are currently partners with Onglyza a drug that Bydureon competes against, Diabetic Investor believes the dismal failure of Onglyza is actually a factor that is driving these companies to pursue Amylin.
Onglyza is an oral medication targeted at patients with Type 2 diabetes and is virtually identical to Januvia the blockbuster drug from Merck (NYSE:MRK). The big difference between the two drugs is Januvia has been here since October 2006 while Onglyza arrived nearly three years later in July 2009. Although BMY and AZN have tried to differentiate Onglyza from Januvia, given its dismal sales results it’s difficult not to classify the drug as a complete failure and quite frankly should have never been launched in the first place.
This is one reason Diabetic Investor could not believe that Lilly (NYSE:LLY) who was once partnered with Amylin, choose instead to launch Tradjenta ™ another drug from the same class as Januvia and Onglyza which came to market well after Onglyza and like that drug is really no different than Januvia. Just as Onglyza failed in the marketplace, Tradjenta has performed even worse and has earned the nickname– TRAJUNKTA in the drug trade. The fact that Lilly choose to this dog of a drug over Bydureon which has the potential to be a paradigm shifting drug shows that when it comes to diabetes Lilly can no longer be considered a serious player. The simple fact is the arrogance of Lilly’s management team has cost them and they will pay a heavy price for this arrogance. There is no excuse for what this team did and not even hubris can explain away such stupidity.
What BMY and AZN both learned from the Onglyza experience is that when it comes to the drugs for patients with Type 2 diabetes better to own the market leader than try and chase the market leader. Although Bydureon has only recently been launched it’s clear that the drug has all the attributes to become the next diabetes blockbuster- solid glucose control – simple and convenient dosing – at worst weight neutral at best weight loss – long patent life and years before there is a comparable competitor. Yes there are other GLP-1’s however Bydureon is the only once-weekly GLP-1 approved by the FDA.
Should either BMY or AZN end up owning Amylin the addition of Bydureon will be welcome news to the field sales force. Think of what it must be like to know that your main diabetes drug is nothing more than me-too copycat of a drug that’s not just well-established but a major blockbuster too boot. Now think what it would be like to be selling a drug that almost every doctor knows about already and is coming to market with great anticipation. Talk about a total reversal of fortune. As we noted before Bydureon won’t sell itself and Novo Nordisk (NYSE:NVO) will fight hard to keep their once-daily GLP-1 Victoza® relevant. Still sales people are motivated by big commission checks and Bydureon looks to be the winning ticket when it comes to hot diabetes drugs.
It’s also helpful that neither the BMY or AZN sales team would have to call on a different set of physicians; the same physicians that aren’t prescribing Onglyza will be the ones who prescribe Bydureon. Diabetic Investor would think it would be a welcome relief to both the physician and sales rep to have something positive to discuss.
Now it’s quite possible that neither BMY or AZN will end up owning Amylin and that someone else will come along and recognize the value of owning a potentially paradigm shifting drug. Given that Amylin shares have jumped over 50% this week already and continue to gain ground the only thing we know for certain is the company is in play and will end up acquired by someone, we just aren’t sure who just yet.
The ultimate irony however really isn’t that Onglyza, a type 2 drug failure, is a factor in the pursuit of Amylin. The real irony here is how Lilly’s executive management team will explain away why they didn’t acquire Amylin when they had the chance. Why they choose to partner with Boehringer Ingelheim rather than support their one time partner. Why they put millions behind the launch of Tradjenta when everyone except these idiots knew the drug would fail in the marketplace. Quite frankly this whole episode proves to Diabetic Investor without question that Lilly is no longer a serious player in diabetes and is now relegated to third trier status.
