Diabetes Drug Approval Lifts Novo Nordisk, Amylin Stock
Cardiovascular Safety Concerns
Regulators, it seems, are still concerned about Victoza's cardiovascular safety and the risk of developing a form of thyroid cancer. Novo Nordisk is required to conduct additional safety studies and will also be required to create a patient registry to monitor Victoza's long-term safety. For now, Victoza will carry a black-box label warning.
Reuters reports Novo execs expect Victoza to reach sales of over $1 billion within five years. But if the response to the approval at Amylin Pharmaceuticals Inc. (AMLN) is any indication, Novo may have its work cut out for it.
Amylin makes the rival diabetes drug Byetta. On the Victoza news, investors pushed the shares to a new 52-week high before settling on a 10% rise. The Victoza approval hiked the odds that the FDA will approve Amylin's own new version of Byetta, a once-weekly version, or Byetta LAR, as the two belong to the same class of GLP-1 injectable diabetes drugs intended to control blood sugar in Type 2 diabetes medicines.
FDA To Make Decision On Rival Drug
Right now, Victoza, as a once-daily injection, is more convenient than Amylin's best-selling Byetta, which requires two injections per day. But if approved, Byetta's once-weekly version could take the crown.
The FDA is due to make a decision regarding Byetta LAR by Mar. 5. Citigroup's Yaron Werber says Byetta LAR could have revenue of $1.8 billion in 2013 if approved this year, Bloomberg reports. He upgraded Amylin from hold to buy and set a $27 target on the stock.
Amylin markets Byetta with Eli Lilly & Co. (LLY), which also saw a nice jump of 1% following the news and ahead of its earnings release Thursday.
New Heart Valve Approved
Finally, the FDA Monday approved a Medtronc (MDT) heart valve that can be implanted without open-heart surgery -- the first of its kind.
The Melody Transcatheter Pulmonary Valve can be implanted through a catheter, or tube, in a leg vein and guided up to the heart. This new approach to the treatment of adults and children with previously implanted, poorly functioning pulmonary valve conduits can delay the need for open-heart surgery.
MDT shares closed 1.7% higher Monday as the device was approved under the FDA's Humanitarian Device Exemption program, which allows approval of devices used to treat conditions affecting 4,000 or fewer U.S. patients a year, hence the market is quite small with Medtronic saying it would likely be implanted in fewer than 1,000 U.S. patients annually.
Still, if it could become a replacement heart valve for other conditions, the opportunities would become much larger.