Dapa doubts validate Bristol-Myers decision to share the risk
Considering acute awareness of the safety of diabetes drugs at the moment, it was not really surprising that dapagliflozin got a rough ride from an FDA advisory panel. Withdrawals or regulatory scrutiny of products including Avandia, Actos and Lantus over the last few years has sapped appetite for risk – the chance of Bristol-Myers Squibb and AstraZeneca winning approval this year for the first-in-class SGLT-2 inhibitor is now slim to none.
However, the decision four years ago to share the costs and profits – and risk - of dapagliflozin considerably lessens the impact of this setback for Bristol-Myers and Astra. This no doubt motivated the US company to seek such a deal in the first place, over what was and remains a high risk product.
The companies' inability to convincingly account for an imbalance of bladder and breast cancers, first revealed at the American Diabetes Association last month, was mostly responsible for the vote against approval (Event - New safety signal creates tougher regulatory road for dapagliflozin, June 27, 2011).
A case of liver damage also prompted cautious comments; in the end nine of the panel voted against allowing the drug on the market, and six for. The FDA is now highly likely to take a similarly cautious stance and issue a complete response letter; the drug’s PDUFA date is October 28.
The question that remains is how arduous a task it will be for the companies to address these concerns.
Bristol-Myers and Astra filed data from over 40 clinical studies that recruited around 6,000 patients, who had received dapagliflozin for up to two years. A request for longer term data from these studies would seem to be best case scenario now – approval in six months with stringent safety warnings and a risk evaluation and management strategy might be feasible, some analysts believe.
Most observers, however, believe a one to two year delay is more likely although a worst case scenario could still unfold – a demand for onerous extra studies that could ultimately prompt the companies to question their committment to the project.
Still, analysts at Leerink Swann make the point that the patient and consumer representatives on the panel swung the votes against the drug – the tally would have been six for and seven against without their contribution. These groups might be expected to be the least tolerant of safety risk.
Meanwhile the medical experts on the panel, even those who voted against, commented the drug represents a novel and innovative approach to treating diabetes and could still make a valuable contribution to treating this illness.
This appreciation of the drug’s novelty could well encourage Bristol-Myers and Astra to stomach further delays; in a statement they said they remain “committed” to the programme.
As such, with a number of other SLGT-2 inhibitors in the pipeline, dapagliflozin’s experience will provide both encouragement and caution – data emerging in the coming years will be scrutinised for any sign of a class effect (Therapeutic focus - Dapaglifozin set back could impact SGLT space, July 20, 2011).
Astra shares fell almost 1% to £29.93 in London today; Bristol-Myers largely shrugged off the news, slipping a couple of cents to $28.75 in early US trade.
Under the terms of a collaboration struck by the two companies in early 2007, both are equally exposed to any further development costs at this point. Following launch, commercialisation expenses and profits or losses will also be shared. However, with Bristol-Myers riding a wave of pipeline success, this set back will be felt more keenly at Astra, which is still struggling for its next big breakthrough.
Astra paid a fair amount of money to get access to dapagliflozin and the other drug included in the deal, the DPP-IV inhibitor Onglyza. As well as a $100m upfront fee, it agreed to foot the majority of R&D costs between 2007 and 2009, which would have been a sizeable bill considering both products were in phase III. A potential $650m in regulatory milestones and development milestones are also payable by Astra.
Considering Astra had no previous endocrinology presence, the Anglo-Nordic drug maker was an interesting choice of partner for Bristol-Myers. It was perhaps offering the best terms, having suffered a number of its own late-stage pipeline setbacks.
The deal has paid off to a certain extent. Launched in 2009, Onglyza sales reached $158m last year and it is worth $1.63bn to Astra and $1.77bn to Bristol-Myers, according to EvaluatePharma’s NPV Analyzer. Ultimately, however, the first-in-class dapagliflozin holds much more potential value – but is likely to be much more costly to get to market.
This delay underscores why Bristol-Myers was prepared to share the risks and rewards of these products. A problem shared is a problem halved – the US drug developer would not have escaped so lightly on the stock market today had dapagliflozin not been found a second guardian.