Will the domino’s fall?

Will the domino’s fall?

Years ago, when Januvia first came on the scene Diabetic Investor noted that it was one of the luckiest drugs ever. Back then the Avandia controversy was in full swing and Byetta, also new at the time, was having a difficult launch. Many experts at the time didn’t think much of Januvia. They didn’t think it was a bad drug rather nothing spectacular. The most compelling feature of Januvia seemed to be the lack of adverse events which as it turned out was very compelling given that physicians were looking for a drug to replace Avandia and Actos.

Looking back this series of events created almost the perfect storm for Merck (NYSE: MRK) who was in desperate need of a blockbuster. Something that got a boost when Onglyza from AstraZeneca (NYSE: AZN) was delayed at the FDA. Basically, Merck had the DPP4 category to themselves creating a Lantus like situation as Januvia was the only game in town. Merck took full advantage and has never looked back.

Diabetic Investor did not think we would see a situation like this again. Today we have 5 long-acting insulin’s, soon to be 4 once-weekly GLP-1’s and 3 SGLT2’s. Although Januvia still holds a commanding lead in the DPP4 category, using price AstraZeneca has salvaged a small share for Onglyza. The diabetes drug arena for all practical purposes has commoditized with price trumping performance.

This belief was further reinforced when Lilly (NYSE: LLY) released the ground breaking EMPA-REG data, data which showed that Jardiance saved lives. Yet as ground breaking as this data is it did not translate into a greater share for Jardiance. The simple reason was Johnson and Johnson (NYSE: JNJ) did a great job of locking up formulary position for Invokana. Although Invokana did not have any cardiovascular data the “experts” believed the cardiovascular data from EMPA-REG would be replicated by Invokana and Farxiga from AstraZeneca, that this was a class effect.

This belief gave payors the cover they needed to keep this a three-horse race. It allowed payors to control pricing/rebates for the expanding SGLT2 category. A category we should note was also not well thought of by “experts” when these drugs were undergoing clinical trials.  Again, it’s not that the drugs did not appear to work but these “experts” were concerned with the category’s adverse event profile, urinary tract infections in particular.

It appeared that Jardiance got another boost when the FDA made adverse label changes to Invokana and Farxiga but not Jardiance. Still Jardiance sales did not get the major boost most expected. There were signs that the drug was doing better but not that much better considering Lilly has EMPA-REG and now a adverse label change for the competition.

Recently Jardiance got what looks like another boost when the FDA allowed for a positive label change based on the EMPA-REG data. The question is will this most recent positive label change finally catapult Jardiance above Invokana. Will it be the straw that breaks the camel’s back?

As if Jardiance needed even more help the Center for Disease Control and Prevention released a report which indicated that the death rate from heart disease rose 0.9% last year. The death rate also rose 3% for stroke, the fifth-leading cause of death in the U.S. Many researchers are tying this increase to the increase in obesity and diabetes, which should also help Jardiance the only SGLT2 with hard positive cardiovascular data.

Although we don’t see this another Januvia like perfect storm of events, we do believe that the dominos are lining up for Jardiance. The question is which piece of news will knock over that first domino.