ViewPoints: Have analysts undervalued the SGLT-2 diabetes drug class?

The propensity of the diabetes market to create industry-leading growth driver products is hardly in doubt. However, analysts may have been caught slightly off-guard by the early uptake of Johnson & Johnson's Invokana in the US market, where the product became the first SGLT-2 inhibitor to be approved for sale earlier this year.

Expected to develop into a niche product within the diabetes space, forecasts for Invokana may undergo notable uplift if its current performance continues. A strong – albeit very early – uptake of the drug among US endocrinologists is also positive for collaborative partnerships involving Bristol-Myers Squibb/AstraZeneca, Boehringer Ingelheim/Eli Lilly and Merck & Co./Pfizer, all of which are seeking to bring further SGLT-2 products to the market.

Insight, Analysis & Opinion

Script data for Invokana for its first seven weeks on the market is better than expected, wrote analysts from Bank of America Merrill Lynch in a note to investors on Wednesday, prompting speculation that the SGLT-2 class could ultimately put pressure on the more established DPP-IV and GLP-1 classes.

Those drugs are under some pressure at present from an ongoing FDA review relating to increased risk of pancreatic cancer and pancreatitis, although any threat of restrictive action or withdrawal should be considered a 'black swan' event, argues Societe General's Stephen McGarry – i.e. a very unlikely but potentially significant event for the manufacturers involved.

A National Institute of Health (NIH) workshop on incretin safety is running over the next two days, although initial disclosures from the FDA appear positive, wrote Mark Schoenebaum – an analyst at International Strategy & Investment – in a note to investors on Wednesday. The suggestion – albeit at this very early stage – is that long-term outcomes studies may be required as the data sources used to raise concern are unreliable.

How this issue develops over the coming months and years could have some impact on how sales of SGLT-2 products are shaped. In a Physician Views poll conducted by FirstWord in April, 25 percent of endocrinologists indicated that ongoing safety concerns for DPP-IV and GLP-1 products would positively influence their uptake of Invokana.

Also revealed by physician feedback were the contrasting commercial characteristics for Invokana – a notable side effect profile (primarily heightened risk of urinary infection) – cited by 53 percent of respondents as a potential deterrent to usage – but a mechanism of action that appears to facilitate easy combination usage with other diabetes drug classes. See Physician Views Poll Results – Side effect profile will limit use of Johnson & Johnson's Invokana, although endocrinologists may prescribe more readily due to safety concerns surrounding existing diabetes treatments.

Recent feedback from key opinion leaders (KOLs) interviewed by FirstWord's Therapy Trends team for a forthcoming report also highlights this complementary mechanism of action as a key selling point for SGLT-2 products moving forward. Furthermore, Johnson & Johnson appears to have recognised this benefit and has produced significant amounts of data to support usage in combination with a wide range of other agents. In addition, the drug has a weight benefit over DPP-IV inhibitors, while Invokana has demonstrated superior head-to-head data versus Januvia, note Bank of America analysts.

If Invokana continues to impress in terms of Script numbers, its focus among investors is likely to increase substantially given the robust commercial outlook of the diabetes market. Investment from other players further demonstrates that this is a class to watch, the latest in a series of collaborations being that agreed between long-running Big Pharma sparring partners Merck and Pfizer. That deal will pair Pfizer's SGLT-2 product ertugliflozin with Merck's market-leading DPP-IV Januvia (see ViewPoints: Can a collaboration between old rivals Pfizer, Merck & Co. ignite commercial excitement in SGLT2 space?). Fixed-dose combination development is a clear opportunity for developers to maximise the complementary potential of the SGLT-2 mechanism; boosted by its first-to-market status with Invokana a deal on this front could be imminent for Johnson & Johnson.

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