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Merck’s diabetes dominance at risk as rival drug helps out heart

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(Bloomberg) — Diabetes isn’t looking as good as it used to for Merck & Co. (NYSE:MRK).

Just two months after the company celebrated a study showing that its best-selling diabetes drug Januvia didn’t harm the heart, new research shows a rival pill significantly reduces the risk of cardiac events — a first for any diabetes drug.

It’s good news for patients, and a serious threat to the New Jersey-based drugmaker’s spot as the biggest seller of pills in the $63 billion market for diabetes drugs. While other drugmakers offer portfolios of treatments, Merck’s only diabetes medicines on the market are Januvia and its mixture with the gold-standard drug metformin, a combination called Janumet.

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Januvia’s sales have plateaued since 2012 even as the number of diabetics worldwide keeps rising, with more than half a billion people projected to have the disease by 2030. Meanwhile, competitors have introduced more than a half-dozen products since the pill’s approval almost a decade ago.

The latest broadside comes from Eli Lilly & Co. and Boehringer Ingelheim GmbH’s pill Jardiance, which reached the U.S. market last year. The companies announced Thursday that the pill prevented heart attacks, strokes and deaths from heart disease in high-risk patients. That could knock Januvia from its spot as the drug of choice for patients who aren’t showing enough progress from generic metformin, usually the first step in therapy.

“For individuals who are susceptible to another insult to the heart, I don’t know how doctors wouldn’t prescribe this,” Tony Butler, an analyst at Guggenheim Securities LLC, said of Jardiance. “My guess is it’s a brand new world.”

Particularly vulnerable

It’s hard to exaggerate the significance of heart disease for diabetics. While it’s already the leading cause of death worldwide, people with diabetes are particularly vulnerable: they are 80 percent more likely to have a heart attack as those without it and 50 percent more likely to suffer a stroke. About two-thirds of the 29 million Americans with diabetes will eventually die from heart disease.

The Jardiance trial was done to meet regulators’ demands that diabetes drugs show they don’t hurt the heart, a concern raised in 2007 when data emerged suggesting GlaxoSmithKline PLC’s Avandia may cause harm. All other studies done thus far failed to show a benefit. Januvia’s trial, released in June, was at the time seen as the best available because it ruled out higher risk.

“To date, all the studies have been neutral, if not harmful,” said Steve Nissen, the head of cardiology at the Cleveland Clinic, who first raised the issue of heart risk with diabetes drugs. “For 50 years we’ve had drugs being approved simply because they lower blood sugar. And in the modern era, that’s simply not good enough.”

The Jardiance study of more than 7,000 patients with a history of cardiovascular problems ran until at least 600 heart attacks, strokes or deaths occurred, which took about 3.1 years. The risk was lower in patients given Jardiance, the companies said.

Multiple treatments

Merck spokeswoman Pam Eisele declined to comment on the findings until the release of the full efficacy and safety results.

“Januvia is an effective add-on therapy to metformin for many patients who need additional glucose-lowering efficacy,” she said in an e-mailed statement. “Many patients need multiple different treatments to manage their type 2 diabetes.”

Januvia and Janumet generated $6 billion in sales last year, or 14 percent of total revenue. That compared with $5.7 billion in 2012.

Merck shares have fallen 5.1 percent in the two trading days since the Jardiance study was announced, compared with a 3.7 percent decline for the Standard & Poor’s 500 Index. Lilly has risen 2.7 percent in the same period, one of the sole gainers in the drug industry amid a market rout.

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While Merck is developing its own version of a pill like Jardiance, alone and in combination with Januvia, it is sharing the drug with Pfizer Inc. Merck is also developing a once-a-week treatment from the same class of medicines as Januvia.

Cancer focus 

But Merck’s focus is increasingly turning to cancer compounds, leaving less room in the budget for diabetes, said Sam Fazeli, an analyst with Bloomberg Intelligence in London. While the diabetes market is large and growing, highly tailored, effective cancer drugs like Merck’s Keytruda can be more profitable.

“They need all the money they can get to invest in immunoncology,” he said. “That’s going to take a lot of their research and development budget.”

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Other drugs could eat into Januvia’s sales further. Studies of Johnson & Johnson’s Invokana and AstraZeneca PLC and Bristol-Myers Squibb Co.’s Farxiga, which are similar to Jardiance, will come in about two years. The results from injected drugs like AstraZeneca’s Byetta and Novo Nordisk A/S’s Victoza, which have an even bigger effect on weight loss, may arrive sooner.

With the new data, sales of Januvia won’t immediately plunge, since doctors keep patients on the medications that are working well, Butler said. And just because a drug is effective in a large study doesn’t mean everyone will benefit from it uniformly, said Adrian Vella, head of diabetes research at the Mayo Clinic in Rochester, Minn.

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The full implications of the Jardiance study won’t be clear until the detailed data is presented at the European Association of for the Study of Diabetes annual meeting in Stockholm next month.

“It’s too early to claim victory, but it’s certainly promising,” Nissen said.

 —With assistance from Cynthia Koons in New York.