Recently, Bristol-Myers Squibb (BMY) and partner AstraZeneca (AZN) suffered a setback when the Endocrinologic and Metabolic Drugs Advisory Committee of the US Food and Drug Administration (FDA) voted 9-6 against the approval of their diabetes candidate dapagliflozin.
Bristol-Myers and Astra Zeneca are seeking approval of the drug as an adjunct to diet and exercise for improving glycemic control in adults suffering from type II diabetes.
The panel voted against approving the candidate due to safety concerns, after reviewing the new drug application (NDA) filed by the companies late last year. The panel members found the existing data insufficient to satisfy their concerns.
The NDA was based on data (up to two years) from a global development program. The program comprised 40 studies and evaluated approximately 6,000 patients. The application also comprised data that assessed the cardiovascular safety of the candidate in adults suffering from type II diabetes.
A final decision from the US regulatory body regarding dapagliflozin is expected to be out in the final quarter of 2011 (target date: October 28, 2011). Even though the agency is not bound to follow the advice of the advisory committee, the recommendation of the panel is usually considered by the agency while deciding the fate of a drug candidate.
Even if dapagliflozin is cleared by the regulatory authorities it would face tough competition in the market. The market for type II diabetes has players like Merck & Co. (MRK) and Novo Nordisk (NVO).
Our Recommendation
We have a Neutral stance on Bristol-Myers, which carries a Zacks #3 Rank (Hold rating) in the short run. Our stance is the same on AstraZeneca.
ASTRAZENECA PLC (AZN): Free Stock Analysis Report
BRISTOL-MYERS (BMY): Free Stock Analysis Report
MERCK & CO INC (MRK): Free Stock Analysis Report
NOVO-NORDISK AS (NVO): Free Stock Analysis Report
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