There are dozens of medications and medicinal cocktails available today to control diabetes. Considering all of the monitoring technologies available in combination with the approved drugs, there are hundreds of possibilities to try and keep diabetes under control. Yet, the prevalence of diabetes is running rampant, with nearly 26 million Americans having the disease, making it a leading chronic illness in the nation and substantial drain on the healthcare system.
Biotechnology, pharmaceutical and medical device companies are taking a variety of approaches to make advancements in diabetes care; advancements that Wall Street has often recognized with appreciation in market valuations. Below are two companies that have been benefiting from their developments and one bottom-buster looking to make a comeback after a significant drop in share value.
SGLT2 - Blocking Sugars From Reabsorbing
AstraZeneca PLC (NYSE: AZN) made a splash last week in striking a deal worth up to $4.1 billion to buy Bristol-Myers Squibb's (NYSE: BMY) stake in a joint venture between the two that started in 2007 with the goal of developing new drugs for Type 2 diabetes. Per the agreement, AstraZeneca has to make a $2.7-billion upfront payment and another $1.4 billion based upon specific milestones being met. The pact could actually fetch Bristol well above $4.1 billion as it is also entitled to royalty payments on net sales through 2025.
With the closing of the acquisition, AstraZeneca will own a manufacturing facility in Ohio and intellectual and global rights to develop, manufacture and commercialize the diabetes franchise, including Onglyza, Kombiglyze XR/Komboglyze, dapagliflozin, Byetta, Bydureon, Symlin and metreleptin. One of the main prizes today is dapagliflozin, an inhibitor of sodium-glucose transport proteins for treating diabetes. The drug affects the role of SGLT2, a sodium glucose cotransporter found predominantly in the kidneys, reducing the kidneys' ability to reabsorb glucose, thereby allowing excess sugars to exit the body through urine.
Dapagliflozin is already approved in 38 countries (sold under the brand name Forxiga), but was rejected by the U.S. Food and Drug Administration for marketing approval two years ago. However, about two weeks ago, the FDA's Endocrinologic and Metabolic Drugs Advisory Committee recommended the drug for approval based upon additional clinical studies that showed the benefits of the drug to outweigh the risks, which included cardiovascular problems and bladder cancer. An official decision by the FDA is expected by January 11, 2014.
The latest news comes on the heels of the Committee for Medicinal Products for Human Use of the European Medicines Agency adopting a positive opinion recommending approval of Xigduo, AstraZeneca's combination of Forxiga and metformin hydrochloride for adults with Type 2 diabetes. The announcements helped drive shares of AZN to all-time highs last week as it broadens its global footprint in glycemic control. The company is certainly not without competition, even in the new SGLT2 space, as the two-year delay in the U.S. with dapagliflozin allowed Johnson & Johnson (NYSE: JNJ) to slip in and win FDA approval in March for its SGLT2-blocking drug canagliflozin. This development has cut analyst expectations for sales of dapagliflozin by more than half should the FDA give it the green light for marketing.
Tackle Sugar Before It Gets Going
Diabetes patients, by definition, have biological limitations to produce or properly use insulin to reduce sugar that is absorbed into the body. That's why drug makers like AstraZeneca and J&J are devising ways to block reabsorption in the kidneys. The carbohydrate experts at Boston Therapeutics, Inc. (OTCBB: BTHE) are taking the approach to block sugars even earlier in the metabolic process, aiming to reduce glucose uptake in the gastrointestinal tract before it can cause problems in the blood stream.
The company's lead drug candidate is PAZ320, a non-systemic chewable tablet that inhibits the enzymes that release glucose from complex carbohydrates in foods during digestion. By targeting those enzymes, the amount of glucose available to be absorbed through the intestines is reduced.
Systemic approaches, such as those that act upon the kidneys or that stimulate the pancreas to produce insulin, carry some risks to other parts of the body, as evident with the initial rejection of AstraZeneca's dapagliflozin by the FDA. Approved medications, such as sulfonylureas and glinides, are taken with increased risk of hypoglycemic events and are only effective in patients with some functioning beta cells in the pancreas to store and produce insulin. Boston Therapeutics has moved outside of the box to develop a drug that significantly reduces glucose from entering the bloodstream in the first place, a distinction that has captured the attention of the investment community.
Positive results from a Phase II study hosted at Dartmouth Medical Center were published in Endocrine Practice (July-August 2013 edition). The study evaluated 24 overweight diabetes patients treated with PAZ320. 45 percent of the patients demonstrated a 40 percent reduction in postprandial blood glucose, compared to baseline in a dose-dependent manner. The results were not correlated to how long a patient had diabetes, nor were they affected by a patient taking other diabetes medications concurrently. Importantly, there were no serious adverse or hypoglycemic events and gastrointestinal side effects were mild.
Boston Therapeutics is enrolling patients in a Phase IIb study in France to evaluate PAZ320 in patients currently using metformin, one of the most commonly prescribed diabetes medications in the world. Additionally, a 300-patient Phase III trial is planned, which will be hosted at clinical sites in the U.S. and abroad. Results from the Phase IIb study and initiation of the late-stage trial should be catalytic moments for the company.
Shares of BTHE are ahead by more than 200 percent in 2013.
A Less-Invasive Approach to Monitoring
Echo Therapeutics (NASDAQ: ECTE) has not received the type of share support in 2013 that AZN and BTHE have, but the company is worth noting as it could be reshaping the dynamics of continuous glucose monitoring (CGM) systems. Approved CGM systems utilize a tiny glucose-sensing device inserted through the skin of the abdomen that measure glucose in interstitial fluids. Through a transmitter (attached to the sensor), the data is relayed via radio waves to a receiver, which displays nearly continuous readings on glucose levels. The receiver also typically displays trends, so diabetes patients can try and avoid hypoglycemic or hyperglycemic events. Unfortunately, CGM systems are not a substitute for traditional fingersticks, as those are still required to ensure that the CGM equipment is properly calibrated.
CGM may not be able to end lancet usage, but Echo is looking to end the subcutaneous component for the sensor. The company is developing the wireless, needle-free Symphony CGM system for initial use in the critical care setting. The system uses Echo's Prelude, a skin permeation device, a transdermal sensor, wireless transceiver and data display technologies. CGM has been the subject of several clinical trials that demonstrate the effectiveness of the monitoring system to reduce hemoglobin A1c levels, a key metric in long-term glycemic control. Today's standard subjects users to not only the discomfort of skin penetration, but also increased risks of infection, inflammation or bleeding at the insertion site.
A recently completed clinical trial of the Symphony CGM system, which enrolled 32 patients across four clinical sites, met their primary endpoints of safety and effectiveness. In the trial, more than 600 readings of blood glucose data were collected from the Symphony system and compared to glucose readings from blood samples. An analysis showed the data from the Symphony system to parallel that of drawn blood samples in measuring blood glucose.
Should it eventually garner FDA clearance, Echo will be facing a tall order in seeking to take market share from industry players like DexCom, Inc. (NASDAQ: DXCM) and Medtronic, Inc. (NYSE: MDT), the nation's biggest medical device manufacturer, but the non-invasive nature of its technology and potential to expand to other areas where extraction of analytes is beneficial will keep it in the sights of investors. Shares sunk to their lowest levels since December 2006 earlier this year, but got a lift in late November following the results from the clinical research.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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