As we start up the new year, it's time to take a look back in time to examine some of the key events that occurred in the world of diabetes drug development in 2011. The past year was full of surprises and for each of these events I'll re-cap who I think the winners and losers were, and provide a view of potential future outcomes. By the way, these events are in chronological order rather than order of importance out of the thousands of minor and major news items that appeared over the wire during 2011, these events were what the Metabolic Disorders team at Decision Resources considered to be the seven most influential events, with long-reaching implications that will affect the entire diabetes drug market in 2012 and beyond.

1.  In January 2011, Eli Lilly and Boehringer Ingelheim announced a joint venture to co-develop and market five diabetes drugs worldwide. These five drugs included an insulin glargine product (i.e., biosimilar version of Sanofi's Lantus), a novel basal insulin product (LY-2605541), the SGLT-2 inhibitor empagliflozin, the DPP-IV inhibitor Tradjenta (linagliptin), and a TGF-beta inhibitor drug in early-phase development for chronic kidney disease (LY-2382770).

Winners and losers: It's still too early to say although in the short term it looks like Lilly has ended up with the short end of the stick. BI is a newcomer to the diabetes market, so the deal gives BI access to Lilly's strong diabetes marketing experience and sales force.  Meanwhile, Lilly has already made a $300 million up-front payment to Boehringer Ingelheim to gain access to two oral diabetes therapies, which complement Lilly's injectable insulin franchise. However, as a third-to-market DPP-IV inhibitor in the U.S. (and despite Tradjenta's marginally improved safety profile compared to other DPP-IV inhibitors), the drug will not be able to approach even a fraction of the market success of Merck's first-in-class Januvia franchise, which achieved over $3 billion in 2011 sales.In the longer term, the deal may become a win-win situation for both parties. An anticipated delay for Bristol-Myers Squibb/AstraZeneca's SGLT-2 inhibitor dapagliflozin opens the door for empagliflozin, although it is still unclear how each of the SGLT-2 inhibitors in the pipeline will be able to differentiate from one another. But more importantly, the partnership gives Eli Lilly access to BI's European sales and marketing expertise generated by BI's strong European presence in the cardiovascular space, which will in turn provide the necessary reach for Lilly's biosimilar insulin glargine product to compete against Sanofi's Lantus and the host of other biosimilar glargine products waiting in the wings.

Also, keep an eye open for LY-2382770. This compound is only in Phase II development for diabetic nephropathy and chronic kidney disease, but will target a market with tremendous unmet need, where any drug able to convincingly demonstrate disease-modifying properties can expect strong sales.

2.  In March 2011, Eli Lilly and Amylin Pharmaceuticals released the results of the DURATION-6 head-to-head trial which pitted Bydureon against Victoza. In this study, Bydureon was unable to demonstrate superiority over Novo Nordisk's Victoza.  This result was yet another disappointment in a long line of setbacks for Bydureon. The drug was already delayed twice by the FDA once with a request for a clearer Risk Evaluation and Mitigation Strategy (REMS) and more recently with a request for a thorough QT (tQT) cardiac safety study. Together, these delays cost the manufacturers 18 months of market access, which we estimate has diminished Bydureon's market potential by approximately $1 billion per year. Without these delays for Bydureon, Victoza would have only had six months on the market before Bydureon's originally anticipated entry date. Now Victoza will get a two-year lead over Bydureon in the U.S. (assuming Bydureon gets the nod from the FDA at the end of this month.)

Winners and losers: The clear winner here is Novo Nordisk. In the past, we had forecasted that Bydureon would own the GLP-1 analogue space shortly after its launch because of its once-weekly dosing schedule and strong glucose-lowering and weight-loss efficacy. Not any more. The tides have now turned and by the time Bydureon enters the U.S. market (expected in Q1 2012), not only will Victoza have been on the U.S. market for two years, but patients will have gotten used to the thin-gauge needles used to administer Victoza. Suddenly the prospect of a once-weekly drug may not be so appealing to physicians, especially if a large-bore needle is required, and if the net result, as demonstrated by the DURATION-6 trial, is that Victoza offers at least comparable (if not better) efficacy. It's clear that this is a huge setback for Bydureon, so perhaps the divorce between Eli Lilly and Amylin Pharmaceuticals doesn't look like that bad of a situation for Eli Lilly after all.

3.  In May 2011, a third nail in the quest for an immunomodulatory therapy for type 1 diabetes hit the coffin when Diamyd Medical and Ortho-McNeil-Janssen's Diamyd vaccine against GAD-65 (an auto-antigen found in a large proportion type 1 diabetics) failed to meet its primary end point in a European Phase III trial. The company subsequently terminated both the U.S. Phase III trial and the follow-up to the European Phase III trial. The previous two nails were the October 2010 announcement that MacroGenics and Eli Lilly's anti-CD3 mAb teplizumab had failed to meet its primary end-point in the Phase III PROTÉGÉ  study and the March 2011 announcement from Toleryx and GlaxoSmithKline that their anti-CD3 mAb otelixizumab had also failed to meet its primary end point  in the Phase III DEFEND-1 study.

Winners and losers: Unfortunately, there are many losers connected to this event and no clear winners other than the major insulin manufacturers. In fact, the future looks bleak for the entire immunomodulatory approach, and as the demise of these frontrunners in the race for a disease-modifying therapy for type 1 diabetes sends a strong signal that we still do not understand the factors that trigger the development of type 1 diabetes as well as we previously thought.

To read about the other key events in the 2011 diabetes drug market and beyond, click here for part two.

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