Some News and Notes

Some News and Notes

Today the FDA extended the PDUFA date for Onglyza, Bristol-Myers (NYSE:BMY) and AstraZeneca (NYSE:AZN) DPP-4, by three months with a new deadline of July 30, 2009. Additionally the PDUFA date for Alogliptin another DPP-4 from Takeda remains unchanged at June 26, 2009. The FDA did not release any updated information on Liraglutide Novo Nordisk’s (NYSE:NVO) GLP-1 which had an original PDUFA date of March 23, 2009.

Diabetic Investor isn’t surprised by this news as it appears the FDA is taking their time looking over every diabetes drug. As indicated in previous alerts Diabetic Investor suspected that the new cardiovascular guidelines for diabetes drug would slow the drug approval process to a crawl, which unfortunately, is exactly what is happening.

This news is sure to bring smiles to the faces of Merck (NYSE:MRK) as their DPP-4 Januvia continues the lucky streak it began from the day the drug was approved. Just this past Tuesday Merck released first quarter results and stated;

“JANUVIA (sitagliptin), Merck’s first-in-class DPP-4 inhibitor for the treatment of type 2 diabetes, recorded worldwide sales of $411 million during the first quarter of 2009, representing a 51 percent increase compared with same quarter in 2008.  JANUMET (sitagliptin/metformin hydrochloride), a single tablet that targets all three key defects of type 2 diabetes, achieved worldwide sales of $128 million during the quarter, more than double the $58 million in sales reported for the first quarter 2008.

Given the lead Merck has in the DPP-4 category and Onglyza coming to market, Takeda has a tough decision to make with Alogliptin. Although we have yet to hear from Takeda, Diabetic Investor suspects they will follow the same path Novartis (NYSE:NVS) did when Galvus was bogged down at the FDA and allow Alogliptin to fall by the wayside. Frankly it makes no sense to throw even more money into a drug that’s already tainted and where they would be third to market in the category.

Watching all this very closely are the people at Amylin (NYSE:AMLN), who besides being involved in a nasty proxy fight are getting ready to submit their long-acting once-weekly version of Byetta to the FDA by the end of this quarter. Besides worrying about the new cardiovascular guidelines, Byetta LAR will have the additional hurdle of dealing with the thyroid cancer issue which showed up with Liraglutide. Although Diabetic Investor believes neither issue will hurt LAR the mere fact the FDA is taking such a deliberate approach to approving any new diabetes drug is cause for concern.

Looking over recent events drug companies aren’t getting a clear picture of exactly what the FDA wants. From outward appearances the FDA is taking a helter skelter approach when it comes to approving new diabetes drugs. It seems as though the FDA is looking for reasons NOT to approve new drugs. As we noted previously the agency is running scared and is deathly afraid of making any mistakes.  

Diabetic Investor isn’t quite which is worse for Amylin dealing with the FDA or dealing with Carl Icahn. In some respects it’s easier to deal with Icahn as the company knows what his intentions are; take over the board and then sell the company. Speaking of which, in a Securities and Exchange Commission filing, Icahn said talks between his representatives, Amylin and Eastbourne Capital ended without a deal. Amylin, in separate statement, also said the talks produced no settlement. This is hardly news as the proxy fight is getting nastier by the day. Given the increasingly contentious nature of the proxy fight it might just be easier for President Obama to solve our current economic crisis than for Amylin, Icahn and Eastbourne to solve their issues.

Another company with big issues is Abbott (NYSE:ABT) who as Diabetic Investor reported is getting set to abandon the Navigator, their continuous glucose monitoring system.  Once hailed as a wonder-product that would reinvigorate Abbott’s diabetes device sales, the Navigator is navigating itself from the penthouse to the outhouse. According to a letter sent to Navigator patients the company states;

“It has come to our attention that Freestyle navigator transmitters could potentially exhibit a fracture on the plastic housing near the battery compartment. Should this occur, there is a possibility that moisture may enter into the transmitter.

If moisture has not entered the transmitter, the transmitter will continue to function normally even with a fracture in the plastic housing. You may continue to use your Navigator under normal conditions such as showering.

However, if moisture enters the transmitter, it may cause the transmitter and the receiver to lose connection, interrupting cont. glucose results. Although unlikely, moisture entering the transmitter has the potential to generate inaccurate results only with the continuous glucose readings."

In typical Abbott fashion during a conference call yesterday the company stated that unless there was a major increase in market share for their BGM unit, more layoffs would be forthcoming. Yep, that’s the way to motivate your already disgruntled sales force, instead of providing them with a strategy, any strategy to increase sales, threaten their jobs instead. Not sure where Abbott management learned their motivational skills from but it’s safe to say they are not graduates of the Dale Carnegie School of selling.

Abbott is the only company Diabetic Investor knows that believes they can increase sales by alienating the people who sell and distribute the products they sell. This is the reason they lost the Cardinal account and why they continue to lose market share. Frankly Abbot has no one to blame but their own incompetent management for this disaster. The way things stand Bayer must be relieved they didn’t pursue a deal with Abbott. It won’t be long before they complete their mission and completely destroy the unit’s value to a possible suitor.

Diabetic Investor must admit we’re amazed to the lengths the company will go to avoid admitting they have made major mistakes. This is the ultimate example of their arrogance. Instead of admitting mistakes we’re made and taking the steps necessary to fix them, the company continues to look everywhere else expect where the real problem is. This is not only arrogant but foolish. We would expect this type of behavior from a child who doesn’t know any better, but not from a major corporation who has shareholders to answer to.

When it comes to Abbott the words of J.C. Hare and A.W. Hare ring loud and clear when they stated; “He must be a thorough fool, who can learn nothing from his own folly.”