Shares of pharmaceutical companies Amylin (AMLN), Alkermes (ALKS), and Eli Lilly (LLY) -- partners in new diabetes drug Bydureon -- have tanked in morning trading as the U.S. Food and Drug Administration declined on Tuesday to approve the drug without additional clinical studies. Amylin shares have skidded 50%; Alkermes shares are down nearly 30% and shares of Eli Lilly have tumbled about 5%.
Bydureon, which was first submitted for approval in May 2009, is a long-acting formulation of Amylin's popular diabetes medication Byetta, meaning patients would have to take it only once a week instead of twice daily. Byetta is approved for the treatment of type II diabetes.
But regulators said the new formulation needs further studies, especially the effect of the drug's main component, exenatide, on heart rate. In addition, the agency has requested results from an ongoing study of the drug.
While this move may have been unexpected since the FDA didn't request further studies in its last letter in March, it is consistent with the FDA's recent actions, including placing greater restrictions last month on GlaxoSmithKline's (GSK) diabetes drug Avandia, which after eight years on the markets was found to increase heart attacks. No doubt, the FDA is trying to stave off any potential criticism and problems this time around.
The companies said they hope to resubmit Bydureon's application by the end of 2011. They also said they expect a final FDA decision could come by mid-2012.
Analysts have projected Bydureon will become a blockbuster seller with over $1 billion in peak annual sales.
This was more bad news for Amylin, which reported its unaudited third-quarter net product sales fell to $154.0 million, including $132.4 million for Byetta, from $192.9 million, including $171 million for Byetta, in the same period last year.
There are many drug makers jostling for a share of the diabetes market. Just a few months ago, things were looking up for Amylin, Alkermes, and Eli Lilly when Roche's diabetes drug was delayed. But this time, the lucky beneficiary is Novo Nordisk (NVO), whose shares are up 10% today, as its diabetes drug Victoza stands to gain further market share without a competitor.