Diabetes

Diabetes: Potential breakthroughs in therapy

New oral drugs promise better convenience and tolerance

Rod Raynovich 9/12/05

Overview

Type 2 Diabetes is a growing epidemic in the U.S. with an estimated 18.2 million people affected in the U.S. and 194 million Worldwide as of 2002. Prevalence has increased steadily over 20 years and over one million new cases are diagnosed each year. The increase in prevalence of Type 2 Diabetes in adults over age 40 account for over 90% of all Diabetes across all demographics are believed to be a result of the association with obesity. Diabetes is the fifth leading cause of death by disease and costs about $132 billion a year in direct and indirect medical expenses. Medical expenditures are expected to double over the next ten years.

Type 2 Diabetes is a progressive disease that begins with insulin resistance, a disorder in which the cells are unable to effectively utilize insulin. Eventually the pancreas loses its ability to produce insulin, the disease progresses and the patient will need a combination of oral anti-diabetic drugs and insulin to control glucose levels. Research studies are underway to determine how effective weight reduction and increased physical activity can slow progression of the disease. However current treatments are not satisfactory with the primary purpose being to control glucose levels and prevent complications.

Therapeutic Market

There are currently several classes of drugs on the market including insulin for treatment of diabetes with total worldwide revenues in the $20 B range. According to Medco Health Solutions in their 2005 Drug Trend Report Endocrine and Diabetes will be 10% of all therapeutic categories in 2005-2007 while diabetes as a category of drugs will account for 5% of the market in that time frame.

Sanford C. Bernstein & Co. analysts Gbola Amusa M.D. and Devesh Gandhi M.D. estimate that current branded diabetes drugs total WW revenues exceeded $12 B in 2004 with U.S. sales growing at 15% annually compared to 6% growth for industry drug sales overall. Recently launched branded oral drugs plus new drugs in the pipeline will reverse the declining market share for branded drugs and also cause insulin sales to grow at a 10% rate. Insulin sales are currently $6B worldwide.

Sanford C. Bernstein estimates that the top six companies in the Diabetes pharmaceutical market–Novartis, Merck, Lilly, GlaxoSK, Takeda, Sanofi-Aventis–will have revenues from new products in the $18 billion range by 2011.

Two of the most commonly used classes of oral drugs for treating Type 2 diabetes are metformins (class Biguanides) which lowers glucose produced by the liver and sulfonylureas which spurs the pancreas to produce more insulin. These drug classes are primarily generics but are also produced under the Aventis Sanofi (SNY) brand.

The leading branded oral therapeutic product is Avandia marketed by Glaxo (GSK) with U.S.revenues forecasted of about $1.7B. Avandia (rosiglitazone) is an insulin sensitizer.

Lilly (LLY) is a major player in the field with revenues forecasted by Morgan Stanley for 2005 of about $3.1B for treatment of Diabetes. Lilly products are Humalog, Humalin, Humatrope, and Actos (pioglitazone). Actos (forecasted $1.6B U.S. in 2005) is manufactured by Takeda Pharmaceutical and partnered with Lilly, is a new class of oral drugs that are linked to genes (PPARS see more later) that impact not only insulin metabolism but obesity and cardiovascular disease as well. Lilly also recently introduced Byetta which is expected to grow rapidly over the next five years.

New Products for Treatment

Amylin-Byetta

Amylin (AMLN) has been the premier speculative stock for potential blockbuster therapeutics in the treatment of Diabetes. During the last weeks of August the stock soared reaching an all time high of 33 on August 31 after positive news was released on Phase 2 Clinical trial results for its Byetta long acting release (LAR) with weekly dosing. Byetta (exenatide) is an injectable drug currently on the market since April, and the first of a new class of drugs called incretin mimetics which exhibits the same effects as the human incretin hormone glucagons-like-peptide-1 (GLP-1). In the small 15 week trial mid-point results showed that patients lost weight and showed improvement in controlling glucose levels. The ongoing Phase 2 randomized, placebo-controlled, double blind study includes 45 subjects with Type 2 diabetes who were not achieving adequate glucose control using diet and exercise with or without metformin. Amylin is partnered with Alkermes (ALKS), that integrated its Medisorb drug delivery technology in Byetta LAR, and Lilly, a major marketing player in the diabetes therapy area.

As can be seen from the above chart, speculation on the efficacy of Amylin exenatide products in development began with increased trading volume off its June 2005 low. Amylin raised $152 million through sale of over 5 million shares of common stock at the end of August through Goldman Sachs as sole underwriter.

Steven Harr M.D., an analyst at Morgan Stanley forecasts Amylin revenues of $125 mil. for the Company in 2005 with U.S. Exenatide sales of $58 mil..
He forecasts Byetta (not including Byetta LAR) peak sales of over $1B. However Dr. Harr believes that Byetta LAR has multibillion dollar potential.

On September 9 the FDA advisory committee approved a new oral drug from Bristol Myers (BMY) and Merck (MRK) called Pargluva. This drug is a potential $3B blockbuster although the advisory committee did not recommend it in combination with other oral drugs except metformins. The committee voted not to recommend its use in combination with sulfonylureas. Pargluva is a new class of compounds called glitazars and is a dual alpha/gamma PPAR (peroxisome proliferator-activated receptor). Activation of PPAR is associated with reduction of glucose levels, reductions in triglyceride levels and increase in HDL levels.
Astra Zeneca (AZN) is also developing a PPAR compound.

Therapeutic Devices-Inhalers

One of the most significant therapeutic devices recently introduced for diabetes treatment is the insulin pump currently being marketed by Medtronic (MDT). Medtronic got the insulin pump through the acquisition of MiniMed, founded by Alfred Mann. Mr. Mann’s new Company Mannkind (MNKD) is in Phase 3 clinical trials with a device that will deliver insulin through dry powder (Technosphere) inhalation into the deep lung. Recently completed Phase 2b studies showed significant reductions in HbA1c (the most important diagnostic marker) levels over a three month period with no increase risk of hypoglycemia. The Technosphere product is designed to deliver insulin in a manner that approximates the first phase insulin spike normally seen in healthy individuals following a meal.

On September 8, the FDA advisory committee voted 7-2 for approval of Exubera (r-DNA insulin) in an inhalable rapid acting dry powder for treatment of Type 1 and Type 2 diabetics. The proprietary inhalation device was developed by Nektar (NKTR) therapeutics with Pfizer (PFE) and Sanofi.-Aventis (SNY) as partners. Although there were some safety concerns such as potential lung function toxicity with certain patients having lung conditions such as asthma, it is expected to offer convenience of use compared to injection hence better compliance. Additional safety studies/data may be required prior to FDA approval.

Since only about 7% of all diabetics achieve their target numbers for blood glucose, cholesterol and blood pressure earlier diagnosis, monitoring and insulin delivery will be a growing market. Market potential for Exubera is in the $2B range, however Sanford Bernstein projects inhaled insulin sales of only $1.7 B WW by 2011.

Longer term medical solutions for Diabetes treatment

The potential applications of stem cell research in a variety of diseases has been well chronicled. One important application of stem cell therapy would be tissue engineering to create cell lines for transplants. For example, a $31 million project was funded at the University of Liverpool in the UK by the European Commission to develop tissue cells from stem cells to treat diseases such as heart failure, diabetes, and chronic ulcers. The stem cells could be used to replace pancreatic cells for treatment of Type 1 Diabetes. New sources of stem cells other than embryos are cells from the umbilical matrix and most recently Harvard researchers recently published on creating stem cells out of human skin tissue.

Scientists at the Joslin Diabetes Center www.joslin.org (affiliated with Harvard Medical School) used DNA chip technology to discover a new gene implicated in Type 2 diabetes. The researchers studied the genes from Type 2 diabetics that were altered in their expression of islet beta cells from the pancreas then showed in mouse studies that one of these genes called ARNT resulted in altered insulin secretions. This gene could possibly result in a new target for treatment of the disease. Joslin is also developing new islet cells fro pancreatic duct cells harvested from human donor pancreatic tissue.

Vaccines for Type 1 diabetes are at an early stage of research and development. The vaccine strategies involve treatment with DNA or antigens and are designed to prevent the body’s destruction of islet cells.

Summary

See www.diabetes.org, www.stateofdiabetes.com, and www.DiabetesHealth.com

Advances in biotechnology will help create new therapies for diabetes. Among the most promising technologies advancing diabetes treatments are drug delivery systems such as pulmonary inhalers, peptide mimetics for identifying new drug targets, DNA chip arrays for genetic analysis and receptors, tissue engineering including stem cell creation for islet cell replacement and transplant.