AstraZeneca ($AZN) and Bristol-Myers Squibb ($BMY) grabbed a win in the EU today for one of the drugs sprung from their diabetes treatment partnership. But the recommended approval comes even as questions have bubbled up about the future of that relationship.
The Committee for Medicinal Products for Human Use (CHMP) recommended approval of Xigduo, along with exercise and diet, for the treatment of Type 2 diabetes. The European Medicines Agency (EMA) traditionally follows those recommendations up a couple months later with an approval. The drug is a combo drug made up of its diabetes drug Forxiga and metformin hydrochloride. The companies last year got EU approval for Forxiga and it already is often prescribed in combination with metformin, a standard treatment for Type 2 diabetes. The twice daily pill makes compliance easier.
The companies pointed out that in 2013, an estimated 380 million people worldwide will have diabetes, and 90% to 95% of those will have Type 2 diabetes. That goes a long way to explain why the two are working together in the field. Last year they supercharged their efforts with a $7 billion, two-stage buyout of Amylin Pharmaceuticals, a move that added Byetta and Bydureon to their portfolio. As the deal closed, AstraZeneca chipped in an extra $135 million for an equal say in the partnership's management.
Bristol-Myers seemed committed to the partnership in its recent earnings report but also said that it was it would discontinue R&D work on diabetes, a move that led at least one analyst to predict it would follow up by pulling out of the partnership. Citigroup analyst Andrew Baum pointed out that BMS could expect to get up to $6 billion by selling a large stake in the partnership, cash it could plow into the other areas it believes have more potential.
And it's not like everything has turned out well for the partnership. The FDA turned down Forxiga on its first run, although it is slated to come again for approval. Another drug, Onglyza, failed a key outcomes trial that Bristol-Myers and AstraZeneca had hoped would give their drug an edge over rivals--and add up to $1 billion to Onglyza sales.
- here's the release
Onglyza fails outcomes trial in a $1B hit for Bristol-Myers, AstraZeneca
Bristol, AstraZeneca chalk up EU approval for Forxiga after FDA rejection
Bristol-Myers axing up to 75 R&D staffers, halts discovery work in three fields
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