Phenomix departure points to shrinking DPP-IV field

News that Phenomix has shuttered its doors and put a for sale sign on its lead programme, the diabetes drug dutogliptin, should not come as much surprise. After Forest Laboratories handed back the rights to the DPP-IV inhibitor in April the odds were looking long against the small biotech making a go of it (Forest bows out of deal as Phenomix reports positive data, April 21, 2010).

Some 15 other novel DPP-IV candidates are in clinical development, most of which are owned by big pharma looking for a new blockbuster with a product to serve the ever-growing number of diabetics (see table below). The incredibly high safety bar set by the FDA is likely to deter most of these companies from trying to crack the US, which could well see only one or two more DPP-IVs reach the market.

Big pharma dominance

Confirming the cost of bringing a diabetes drug to market, a review of the clinical-stage pipeline shows that all but two of the DPP-IVs are in the hands of big pharma companies. Besides California-based Phenomix, Arisaph Pharmaceuticals of Massachusetts has ARI-2243 listed in phase I, although the privately held company has not released any news on the project nor detailed any financing since 2007. The company did not return a call seeking comment on the project’s status.

Takeda’s Nesina, known generically as alogliptin and already on sale in Japan, and Boehringer Ingelheim’s Ondero are the only other DPP-IVs likely to reach the US and European markets. Despite significant regulatory set backs in both regions Takeda is pushing on with a large cardiovascular outcomes study called Examine. Due to enrol 5,400 patients and complete in 2015, this study is the key to global success for the drug.

Analysts are pencilling in sales of $1.30bn by 2016, but this figure is unlikely to include any contribution outside of Japan just yet. With significant patent expiries approaching Takeda has a vested interested to push on with the agent, which despite the set backs has the potential to become a valuable product (Alogliptin disappointment continues for Takeda, June 29, 2009).

Securing revenue with line extensions

Life-cycle management, meanwhile, is also helping to ring-fence the field. Merck & Co set a trend when it combined its sector-leading Januvia with the first-line treatment metformin to create Janumet; metformin and pioglitazone combinations with Bristol-Myers Squibb’s Onglyza (saxagliptin) and Nesina (alogliptin) are in the works.

As it stands, Januvia and its line extensions – an extended release version of Janumet is also in the pipeline – are forecast to hoover up 54% of the $10.8bn in DPP-IV sales in 2016.

The existence of such franchises does not necessarily limit new entrants, as markets can grow; the ever rising cardiovascular safety bar of the FDA will be the limiting factor here. The Avandia affair has only increased the sensitivity of global regulators, and new diabetes drugs are likely to need larger-than-ever cardiovascular safety data packages in order to pass muster, as demonstrated by alogliptin’s delays.

Thus, the payoff will need to be even greater. Even the big pharma companies in the table below may not believe it is worth it.