On December 19, 2013, AstraZeneca (AZ) announced that they reached an agreement to end their diabetes joint venture with Bristol-Myers Squibb (BMS), with AZ buying out BMS's portfolio in diabetes. The transaction will cost AZ up to $4.3 billion in total, with an initial payment of $2.7 billion. This sale marks the end of a six-year partnership between the two companies, which expanded significantly when they jointly acquired Amylin Pharmaceuticals in July 2012. AZ will inherit the intellectual property and global rights to several diabetes therapies including Onglyza® (saxagliptin), Kombiglyze XR (saxagliptin and metformin HCl extended release), Komboglyze (saxagliptin and metformin HCl), dapagliflozin (marketed as Forxiga® outside the US), Byetta® (exenatide), Bydureon® (exenatide extended-release for injectable suspension), metreleptin and Symlin® (pramlintide acetate). AZ indicated that the deal, which has been approved by BMS's board, is expected to close during the first quarter of 2014.1

The TreatmentTrends®: Type 2 Diabetes (US) 2013 report published in October 2013 focuses on the management of type 2 diabetes (T2D) and provides insights into physician perceptions of T2D, based on primary market research of 102 U.S. Endocrinologists (ENDOs) and 55 U.S. PCPs.2

The report asks physicians for their perceived use of the major-diabetes classes, including DDP-IV inhibitors, of which Onglyza is one. Through September 2013, Onglyza sales generated $202 million in revenue in the U.S. according to AZ's 2013 financial results.3TreatmentTrends®: Type 2 Diabetes (US) 2013 finds of the more than 20 percent of patients on DDP-IV inhibitors, more than 10 percent are on Onglyza. AZ will also soon own GLP-1 receptor agonists Byetta and Bydureon as well in this transaction. Of the nearly 20 percent of T2D patients on GLP-1 receptor agonists, over 50 percent are on Byetta and Bydureon. Among all surveyed physicians, Bydureon stands to gain patient share six months from now, primarily at the expense of Byetta, which is not surprisingly given the more convenient dosing option with Bydureon.

The report asks a series of attributes and physicians perception of them in terms of importance and product performance for many soon to be owned AZ products, including Onglyza, Byetta and Bydureon. According to surveyed physicians, convenient dosing, low risk of hypoglycemia and tolerability are the top three attributes for Onglyza. However, Onglyza performs lower on these attributes: cost to patients, effect on body weight and effective in lowering HbA1c levels. According to the surveyed physicians, the top three attributes of Bydureon are convenient dosing, low risk of hypoglycemia and effect on body weight, however the product performs lower in cost to patients, safety (any issue other than hypoglycemia) and tolerability.

The report also discusses physician message recall and sales representative frequency for several of the products that AZ will soon acquire. Nearly a quarter of physicians recall an ease of administration message from Bydureon sales representatives; much higher than the 6 percent who recall this message from Byetta sales representatives.

What else does AZ get in this deal For one, dapagliflozin, which may launch in the U.S. this coming year, and has been approved by the EMA since November 2012.  According to the TreatmentTrends report, approximately 60 percent of the surveyed physicians were aware that a dapagliflozin NDA has been submitted to the FDA in July 2013. Awareness of this NDA and familiarity is higher among ENDOs compared with PCPs. The report also finds that more than half of ENDOs have high interest in dapagliflozin and would consider almost 20 percent of their T2D patients as candidates for treatment with dapagliflozin, assuming FDA approval. The report also covers expected line of therapy for this potential new medication.

It remains to be seen in the coming years whether the price expected to be paid by AZ will be worth it, but of course, chances are better for success, should dapagliflozin receive FDA approval later this year. The recent Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) committee voted 13 to 1, so things are looking positive for this potential new product.4

Business Insights Analyst Jihan Khan and Director Rob Dubman are part of the Cardiovascular, Metabolic and Renal Disorders team at Decision Resources Group.

References:

  1. AstraZeneca Press Release, December 19, 2013
  2. BioTrends Press Release, October 31, 2013
  3. Astra Zeneca 2013 Financial Results: Third quarter and nine months results 2013
  4. Bristol-Myers Squibb Press Release, December 12, 2013. Note that two votes occurred during the EMDAC meeting and the one referenced above was about the benefits of dapagliflozin use and how it outweighs identified risks and supports marketing of dapagliflozin as an adjunct to diet and exercise to improve glycemic control in adults with T2D.

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