Ortho-McNeil-Janssen Pharmaceuticals, Inc., a Johnson & Johnson (JNJ) company, recently returned the rights to a type I diabetes candidate to Diamyd Medical AB. The agreement between the two companies was signed in June 2010.
The agreement related to the development and commercialization of Diamyd, a GAD65-based therapy being evaluated for the treatment and prevention of type I diabetes and associated conditions. Diamyd Medical had received an upfront payment of $45 million and was entitled to receive up to $580 million on the achievement of development and sales milestones. Diamyd Medical was also entitled to receive tiered royalties on future sales.
The termination of the agreement does not come as a surprise as Diamyd Medical reported disappointing results on the candidate from a phase III European study in May 2011. Results showed that the candidate failed to meet its primary endpoint in the study. Diamyd Medical has decided to discontinue the follow-up period of the European study.
Late last month, Johnson & Johnson had provided an update on its Pharmaceuticals business. Johnson & Johnson spent about $4.4 billion on its pharma pipeline in 2010 and gained approval for six new drugs since its last Pharmaceuticals business review in 2009.
Johnson & Johnson is looking to strengthen its pharma product portfolio and plans to file for approval of 11 new products and more than 30 line extensions in the 2011-2015 timeframe.
The company’s main focus areas include: Neuroscience; Cardiovascular and Metabolism; Immunology; Oncology and Infectious Diseases/Vaccines. An interesting candidate in the Cardiovascular and Metabolism pipeline is canagliflozin, which is being developed for type II diabetes in collaboration with Mitsubishi-Tanabe Pharmaceutical. US and EU regulatory filings for this candidate are slated for the first half of 2012.
Neutral on Johnson & Johnson
We currently have a Neutral recommendation on Johnson & Johnson. Even though Johnson & Johnson has been facing challenges in the form of OTC product recalls, pricing austerity in the EU and generic competition, we believe that the company’s diversified business model, lack of cyclicality and strong financial position will help it in tough situations.
The company’s target of filing for approval of 11 new products and more than 30 line extensions in the 2011-2015 time-frame should help lessen the impact of the genericization of key products in the pharma portfolio.
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