The next wave of diabetes drugs

CHICAGO (CNNMoney.com) -- As the nation's biggest diabetes conference wrapped up Tuesday, Bristol-Myers Squibb, AstraZeneca and Novo Nordisk emerged as drugmakers-to-watch with the most late-stage experimental diabetes drugs.

They hope to competing for a stake in the nearly $9 billion non-insulin oral diabetes drug market.

Diabetics can suffer dangerous fluctuations in blood-sugar levels because they have difficulty producing their own insulin. Diabetics typically inject insulin to control these levels. The drug companies are experimenting with new drugs that would control these levels without the use of insulin.

New York-based Bristol (up $0.29 to $31.85, Charts, Fortune 500) and the British company AstraZeneca (up $0.74 to $51.74, Charts) reported Monday that their jointly developed saxagliptin successfully controlled blood-sugar levels in diabetics with type 2, or the most common type, of the disease.

A late-stage study tracking 743 diabetics compared those who took saxagliptin combined with the commonly-prescribed generic metformin, to those who took only metformin.

In the saxagliptin group, 37 percent or 44 percent reached healthy blood-sugar levels, depending on how much of the drug they took, compared to 17 percent who took only metformin. None of these diabetics took insulin during the study, according to the companies.

Saxagliptin is still undergoing late-stage testing and has not yet been filed with the Food and Drug Administration. If the drug successfully gets through the regulatory process, it could someday compete with Januvia, from the New Jersey-based drugmaker Merck (up $1.00 to $49.34, Charts, Fortune 500).

Januvia, which was launched in 2006, is expected to peak at $1.8 billion in annual sales by 2011, according to Les Funtleyder, analyst for Miller Tabak.

The Swiss drug giant Novartis (down $0.06 to $55.40, Charts) is trying to get a similar drug, Galvus, approved by the FDA, but it has run into regulatory hold-ups and its future is uncertain. Januvia, saxagliptin and Galvus are all members of the same drug class, called DPP-4 inhibitors.

Bristol and AstraZeneca unveiled their study results at the annual conference of the American Diabetes Association, which estimates that there are more than 20 million diabetics in the U.S. The problem is growing in step with the aging population.

On Thursday, before the conference even began, Danish company Novo Nordisk (up $1.71 to $106.25, Charts) announced late-stage study results for its experimental non-insulin drug liraglutide. Of the 581 type 2 diabetics participating in its study, Novo Nordisk said more than 50 percent of the liraglutide patients achieved healthy blood-sugar levels, and the blood-sugar reductions were better than in those taking insulin.

If liraglutide gets approved by the FDA, it would compete directly with Byetta, an injectable diabetes drug from Amylin (up $0.15 to $40.98, Charts) and Eli Lilly & Co. (up $0.43 to $55.91, Charts, Fortune 500) Byetta was launched in 2005 and sales totaled $430 million the following year, split between Amylin and Lilly.

Les Funtleyder, analyst for Miller Tabak, said that research reported at the ADA "was incremental and not dramatically different" from treatments that are already on the market.

But he added that the diabetes market is big enough to support the so-called "me-too drugs," and that even drugs of the same class can act differently in different populations of diabetics.

"It's good to have choices," said Funtleyder.

At the conference, Bristol and AstraZeneca unveiled promising test results for an experimental blood sugar-reducing drug called dapagliflozin. This is a member of a new class of drugs called SGLT2 inhibitors, so it acts differently from anything currently on the market. But the drug is in early-stage testing and years away from potentially entering the market.

Funtleyder does not own stock in the companies mentioned here and Miller Tabak does not conduct business with them.