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TheStreet Open House

Diabetes-Drug Makers Face FDA Hurdle

Stocks in this article: AMLN VVUS INCY

"An FDA mandate for cardiovascular screening trials prior to approval for all novel diabetes drugs will slow development and increase costs (potentially making it uneconomical for some and pushing incremental capital in other directions)" wrote Morgan Stanley's Harr.

If a company has a diabetes drug in phase II studies where the increased risk of heart attack or stroke cannot be ruled in or out, the FDA may require that company to conduct a much larger and longer phase III clinical trial to definitively rule out any such heart risk. Such a trial could add years and tens of millions of dollars to the development costs, Harr writes in his note.

For other companies, the FDA may grant conditional approval of a diabetes drug but still require a post-approval cardiovascular risk study. Such an expense would reduce the near-term profit margin on any new diabetes drug, Harr says.

Mads Krogsgaard Thomsen, chief science officer of Novo Nordisk, said he expects a discussion about a post-approval cardiovascular commitment to be discussed at the April advisory panel meeting.

Merck (MRK) recently announced that it would conduct a post-approval study of its diabetes drug Januvia in 14,000 diabetics specifically to look for increased heart safety risks.

Senior Wrtiter Adam Feuerstein contributed to this report.

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