March 26, 2009 / 4:04 PM / 10 years ago

UPDATE 1-PREVIEW-Novo, Astra-BMS diabetes drugs face US grilling

* FDA panel to review Onglyza April 1, Victoza April 2

* Focus on cardiovascular safety of both diabetes drugs

* Bristol, AstraZeneca, Novo Nordisk say confident of data

* Share prices may be volatile (Adds analyst, company comments)

By Ben Hirschler

LONDON, March 26 (Reuters) - Two new diabetes drugs face tough appraisals from U.S. experts next week, promising a volatile ride for shares in Novo Nordisk (NOVOb.CO), AstraZeneca (AZN.L) and Bristol-Myers Squibb (BMY.N).

Investors are nervous about prospects for Novo’s Victoza, or liraglutide, and AstraZeneca and Bristol’s Onglyza, or saxagliptin, both of which could face safety issues that delay their approval in the key U.S. market.

Worries have been heightened since March 6, when Takeda Pharmaceutical (4502.T) said the U.S. Food and Drug Administration (FDA) needed more data on its new diabetes drug alogliptin, sending the Japanese group’s stock tumbling.

The FDA may not be in a rush to clear medicines that work the same way as other drugs on the market, Morningstar analyst Damien Conover said.

“You’ve got some headwinds going up against these drugs,” Conover said.

Onglyza, which will be assessed by the FDA’s Endocrinologic and Metabolic Drugs Advisory Committee on April 1, belongs to the same DPP-4 drug class as alogliptin.

The only successful DPP-4 drug at present is Merck & Co’s (MRK.N) Januvia, which had sales of $1.4 billion in 2007. Novartis NOVN.VX was also an early pioneer of DPP-4s but it has struggled to get rival medicine Galvus to market amid concerns about skin and kidney safety.

Both Onglyza and Galvus were linked to skin lesions when high doses were given to primates.

If successful, Onglyza could generate sales of more than $3 billion a year, some analysts believe. But most are forecasting just $200 million to $400 million, reflecting uncertainties about its chances in front of a cautious FDA.

Underlining that caution, the FDA in December told companies it wanted more evidence on cardiovascular risk, following a scare over heart risks with GlaxoSmithKline’s (GSK.L) Avandia.

“IMPORTANT READ-THOUGH”

The panel meeting “is going to be a very important read-through on how the FDA is going to apply the guidelines for a lot of companies,” Citigroup analyst John Boris said.

Bristol-Myers, in a statement with AstraZeneca, said it was “confident in the comprehensiveness of our development program for Onglyza” and has “not seen a cardiovascular safety signal throughout our clinical development program.”

Doubts have also grown about Novo’s Victoza, which will go in front of the same committee on April 2.

The Danish company is confident its drug has an excellent cardiovascular safety profile and says it has not been asked by the FDA to conduct any more clinical studies before approval.

“We believe that the data we have submitted to the FDA will satisfy the agency’s requirements for an approval, perhaps with a commitment of a post-approval study of long-term cardiovascular risk,” said Dr. Alan Moses, Novo’s global chief medical officer.

But many investors still fear a delay is possible.

Confidence in Victoza — the key driver for Novo in the years ahead — has weakened in recent months because of worries about the FDA’s stance and slowing sales of Amylin Pharmaceuticals’ AMLN.O rival product Byetta.

Both Victoza and Byetta belong to the GLP-1 class of injectable drugs that stimulate insulin release only when glucose levels become too high. Byetta carries a warning about rare cases of pancreatitis, and the FDA may want a similar caution on Victoza, analysts said.

Consensus forecasts for Victoza have come down to around $1.3 billion to $1.5 billion, according to analysts at Citigroup, nearer the brokerage’s own cautious prediction of $1.2 billion in 2015.

The FDA usually approves drugs that win panel recommendations, although it has rejected or delayed some drugs in the past year that were backed by advisory committees.

“It’s very hard to handicap how much you need to appease them with the safety concerns,” Conover said. (Additional reporting by Lisa Richwine and Susan Heavey in Washington; Editing by Sharon Lindores and Brian Moss)

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