Roche's diabetes drug faces long delay

Roche's diabetes drug raises issues

The release of an experimental diabetes drug being developed by Roche, under licence from French group Ipsen, will be delayed by as much as 18 months due to new safety concerns raised during the clinical trials.

The Swiss drugmaker said that it was implementing a risk mitigation plan in the taspoglutide Phase III programme following cases of hypersensitivity reactions to the diabetes drug, which is an injected product belonging to the Glucagon-like peptide (GLP-1) class.

Some of the patients participating in the ongoing Phase III study have developed skin reactions, gastrointestinal symptoms and, less frequently, cardiovascular and respiratory symptoms. The occurrence of hypersensitivity reactions was higher than expected, said Roche, but it remains uncommon at less than one percent, and all patients recovered with no complications. 

The setback has raised a number of questions about the commercial potential and viability of taspoglutide in diabetes and Roche is now assessing how the new findings will impact plans and timelines for release of the diabetes drug.

Jefferies industry analyst Jeffrey Holford has, however, questioned the entire feasibility of Roche's taspoglutide, saying: "Now the product can't launch before 2014. We question to some extent whether it can be launched at all."

Mr. Holford now expects the primary beneficiary to be Novo Nordisk's diabetes drug Victoza, which is already on the market and belongs to the same GLP-1 class.

Consequences for Roche's market shares

Analysts generally have seen Roche's taspoglutide setbacks as extremely worrying, although have taken note of Roche's of prompt reactions to the latest developments.

Zuercher Kantonalbank analyst, Michael Nawrath, has said that the diabetes drug is still very efficient but he expects studies which were predicting annual sales of US$2.5 billion to US$3 billion for taspoglutide to be revised downwards by "a quarter or a third." Mr. Nawrath also expects approval for the drug to be granted in 2013, rather than 2011, which Roche had previously been aiming for.

Roche's shares fell 2.5 percent this morning, while Ipsen - a far smaller company - saw its shares plummet by 15 percent, according to Reuters.

In the past, Roche declared that its diabetes drug could see peak sales in excess of CHF2 billion if it made it to the market. However, some analysts were already sceptical of this claim, following tolerability problems reported in scientific abstracts which are due to be circulated at a US diabetes meeting this month.

Taspoglutide, a once-weekly injection, would be a competitor for Eli Lilly and Amylin's Byetta and Novo Nordisk's Victoza. Following Roche's setbacks, Novo Nordisk shares rose by 3.3 percent and Morgan Stanley analysts pointed out that Roche's GLP-1 drug is not the only one of its kind being developed at the moment.  

Roche gained exclusive global rights to develop and market taspoglutide in 2006 after exercising its licensing option from Ipsen. Ipsen has, however, retained co-marketing rights and, in Japan, Roche shares these rights with Tejin.

Several pharmaceutical companies are currently developing experimental GLP-1s.

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