Boston Business Journal
February 10, 2012
Alkermes readies for diabetic treatment push
CEO Richard Pops says Alkermes’ new Type 2 diabetes treatment has the potential to be an attractive choice for physicians and patients.
By Julie M. Donnelly
Alkermes plc (Nasdaq: ALKS) and its partner Amylin Pharmaceuticals Inc (Nasdaq: AMLN) fought hard for last month’s FDA approval for their Type 2 diabetes treatment Bydureon. The two companies will now wage a second fight to drive uptake of the medicine in the face of likely reimbursement hurdles and burgeoning competition in the diabetes market.
“We know that new treatment options are essential for the millions of people who struggle with this disease. Given Bydureon’s proven efficacy and safety profile, it has the potential to be a very attractive choice for many physicians and patients,” Alkermes CEO Richard Pops wrote in an email. Alkermes, incorporated in Ireland, has its U.S. headquarters in Waltham.
The drug, a once-weekly version of the already approved Byetta, is garnering some early support from doctors, according to a recent survey of endocrinologists by Burlington-based pharmaceutical research firm Decision Resources.
“It makes sense that doctors, who are dealing directly with patients, are in favor of the drug with its convenient once-per-week shot,” said Christine Helliwell, an analyst at Decision Resources. “But insurers typically don’t pay for convenience, so Bydureon is likely to have worse reimbursement than Victoza,” Bydureon’s chief competitor marketed by Danish pharma Novo Nordisk (NYSE: NV0). The survey found endocrinologists would prescribe the drug to 20 percent of their patients.
However, Decision Resources projects that Bydureon will command just 2.6 percent patient share in the U.S. Type 2 diabetes market by 2020.
Even this conservative estimate would elevate Bydureon into the echelon of blockbuster drugs, given the total U.S. diabetes market is estimated to grow to $31 billion by 2020, according to Decision Resources analysis. But upcoming competition means Bydureon may not maintain that perch for long.
“It’s hard to imagine, seven years out, that there won’t be a couple of new competitors on the market,” said Dr. Jon
LeCroy, an analyst for brokerage firm MKM Partners. While Bydureon is the first once-weekly treatment for diabetes on the market, Indianapolis-based Eli Lilly & Co. (NYSE: LLY) could potentially have another once-weekly treatment called dulaglutide on the market by 2014. And Novo Nordisk is currently working on a longer-acting version of Victoza, which is Bydureon’s chief competitor now. LeCroy predicts that by 2015 or 2016, Bydureon would reach sales of $1 billion, which would translate into $80 million for Alkermes, given its 8 percent share of royalties. Alkermes will receive a $7 million milestone payment, likely this month, associated with the launch of the drug.
One factor that could help Bydureon out of gate is that it has been priced aggressively.
The wholesale price of Bydureon will be $11.55 per day, per patient, Amylin executives disclosed after the FDA approval. Meanwhile, the more common, higher dosage of Victoza is $15.46 per patient per day, while the lower dosage is $10.32 per patient per day.
For Alkermes, Bydureon is one of five products it is counting on to drive revenue growth for the company, since it closed its merger with Elan Drug Technologies, a unit of Irish drug maker Elan Corp., in September 2011. Others include schizophrenia drugs Risperdal Constra and Invega Sustenna, co-owned with Johnson & Johnson (NYSE: JNJ), multiple sclerosis treatment Fampyra, co-owned with Biogen Idec (Nasdaq: BIIB), and Vivitrol, a therapy for alcoholism and opiate addiction.
Alkermes reported a net loss of $14.8 million for its first full quarter following the close of Alkermes’ merger with the Elan unit, versus a loss of $11.4 million for the corresponding quarter the previous year. Revenue grew to $125.6 million for the quarter ending Dec. 31, 2011, up from $44 million in the year-ago period. Alkermes’ shares closed at $19.26 on Feb 7, and has traded between $11.86 and $20 over the past year.
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