July 15 (Bloomberg) -- A U.S. advisory panel’s call for stronger warnings about heart risks tied to GlaxoSmithKline Plc’s diabetes drug Avandia may further erode sales that had already been dropping over the last two years.
While the Food and Drug Administration advisers didn’t recommend a recall, the proposed label changes may eliminate 95 percent of Avandia’s use, said Steven Nissen, head of cardiology at the Cleveland Clinic in Ohio, in an interview yesterday.
Avandia generated $1.1 billion last year for London-based Glaxo, the U.K.’s biggest drugmaker. That’s one-third of the drug’s revenue before Nissen’s analysis two years earlier linked the medicine to a 43 percent increased risk in heart attacks. The FDA began re-examining its 2007 decision to keep Avandia on the market after members of Congress voiced concerns and data emerged from almost a dozen new studies.
“This is the industry on trial,” Navid Malik, an analyst at Matrix Corporate Capital in London, said yesterday in a telephone interview. “The new FDA has a real level of rigor. They’ll be a lot more cautious going forward, and there will be a lot more questions before applications for similar drugs go in for approval.”
Increased oversight by the FDA may raise the cost of clinical trials and drug development for pharmaceutical companies including Glaxo, Malik said.
The FDA panel recommended Avandia’s fate at the conclusion of a two-day meeting in Gaithersburg, Maryland. While the agency usually follows the recommendations of its advisers, it isn’t required to do so.
Glaxo gained 21 pence, or 1.8 percent, to 1,202.5 pence at 2:56 p.m. in London after the company said in a statement it expects to record a 1.57 billion-pound ($2.4 billion) legal charge in the second quarter to settle legal cases, including lawsuits alleging Avandia led to heart attacks.
The drugmaker’s American depositary receipts rose 86 cents, or 2.4 percent, to $37.21 at 4 p.m. in New York Stock Exchange composite trading. Each ADR represents two ordinary shares.
An estimated 23.6 million Americans have diabetes, mostly the Type 2 variety linked to being overweight and sedentary, according to the National Institutes of Health. The disease is caused by an inability to use insulin to break down blood sugar into energy and can increase the risk of heart disease, stroke and kidney damage.
Avandia is approved by the FDA to treat type 2 diabetes. In this condition, the body fails to properly use insulin, a natural substance that helps control blood sugar levels. The drug, approved for sale in the U.S. in 1999, works by increasing the body’s sensitivity to insulin.
Questions about how Avandia affects the heart arose even before it won U.S. approval. The drug decreases hemoglobin levels, raises cholesterol and can cause swelling and weight gain. European regulators required the company to conduct a study into Avandia’s cardiovascular safety as a condition of its approval the following year.
Subsequent studies failed to prove Avandia increased the risk of heart attacks or deaths. Its main rival, Takeda Pharmaceutical Co.’s Actos, didn’t boost cholesterol levels, which can contribute to heart attacks, and was shown to reduce cardiovascular complications in a 2005 trial.
It wasn’t until researchers compiled the results of several studies that they found patients taking Avandia may be at higher risk for cardiovascular disease. Nissen’s report used data Glaxo posted on its website as part of a settlement with former New York Attorney General Eliot Spitzer over claims it withheld information about the risks of giving the antidepressant Paxil to children. A Glaxo review found a similar risk, and the company was discussing the results with the FDA when the Nissen report came out in May 2007.
Nissen said yesterday in an interview that Actos, which is in the same family of diabetes medicines, has been shown to work as well as Avandia without the same heart risks. It is not clear why.
Takeda dropped 1.4 percent to close at 3,965 yen in Tokyo trading, and Japan’s benchmark Topix index lost 1.6 percent. The stock had gained 3.3 percent in the last seven trading sessions until yesterday.
“Some investors are selling Takeda as they had bought the shares on an expectation that sales of Avandia may be discontinued,” Yasuhiro Nakazawa, an equities analyst at Mitsubishi UFJ Morgan Stanley Securities Co., said by telephone today.
Seventeen members of the FDA advisory panel voted to allow the drug to remain on the market with new restrictions and three backed the medicine with no new warnings. Twelve voted to recall the treatment and one panel member abstained.
Regulators “will come to a decision as soon as possible,” Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, told the panel after the meeting. European regulators have said they also are reviewing the drug’s risks and benefits.
“Avandia is still not out of the woods yet,” said Timothy Anderson, an analyst at Sanford Bernstein & Co. in New York, in a note to clients yesterday. “It is possible that Avandia could still face withdrawal in certain ex-U.S. markets, but the odds seem better now with the U.S. recommendation to stay on the market in hand.”
Lost Market Share
Since 2007, Avandia has lost market share to newer diabetes drugs including Merck & Co.’s Januvia, Amylin Pharmaceuticals Inc. and Eli Lilly & Co.’s Byetta, and Novo Nordisk A/S’s Victoza. Studies released in recent weeks, including an analysis by David Graham, a drug safety reviewer at FDA, suggested Avandia may be linked to more deaths, heart attacks and strokes.
“I can’t imagine that Glaxo is happy with this vote,” Graham, associate director for science and medicine in the FDA’s Office of Surveillance and Epidemiology, said in an interview. “The sentiment of the committee was that Avandia should not be widely available for use in the United States.”
During the course of two days, the panel heard reports from Glaxo researchers, FDA staff and outside scientists about the safety of Avandia, approved in 1999. A series of votes considered whether Avandia’s risks were greater than rival diabetes drugs. They determined the heart attack risks from Avandia were worse than for patients on Takeda’s Actos, a treatment that works the same way.
A similar advisory panel voted 22-1 to allow Avandia to stay on the market in 2007 after saying the data suggested heart risks.
“They moved a long way from 2007 and they gave the leadership of the FDA enough ammunition to withdraw if they want to withdraw,” Nissen said yesterday. If the agency adopts recommendations to certify doctors who prescribe Avandia and restrict patient use, “it would mean that essentially the drug would be used almost not at all,” he said.
“Following today’s recommendations, we will, of course, continue to work with the FDA in the best interest of diabetes patients who face this chronic and serious disease,” said Ellen Strahlman, Glaxo’s chief medical officer, in a statement. “Patients taking Avandia should speak with their physician about their treatment and any questions they may have regarding the safety of the medicine.”
President Barack Obama last year appointed FDA Commissioner Margaret Hamburg and Principal Deputy Commissioner Joshua Sharfstein to run the agency, citing their expertise in public health. Lawmakers have urged them to use the Avandia decision to show their commitment to protecting consumers.
“If the FDA is to be a force for change and for returning to the gold standard for safety for which it was once known, then its upcoming decision on whether to pull Avandia from the market will be the defining moment for the agency under the Obama administration,” said Representative Rosa DeLauro, a Connecticut Democrat, in a statement yesterday. DeLauro chairs the House subcommittee in charge of the FDA’s budget.
Two members of the current FDA advisory panel, who also were part of the group that examined Avandia in 2007, took opposing views on the new research.
“The additional evidence since 2007 is weak from a clinical and scientific point of view, and there was nothing that convinced me it required a major change,” said Arthur Moss, one of three panelists who voted to keep Avandia on the market with no labeling changes. Moss is director of the University of Rochester Medical Center’s Heart Research Follow-up Program.
‘Totality of Evidence’
Clifford Rosen, director of Clinical and Translational Research at Maine Medical Center, said, “the totality of evidence is now stronger” that Avandia poses significant heart risks. “Clearly there is a signal.”
The panel recommended in a 19-11 vote that Glaxo continue its ‘Tide’ study comparing Avandia and Actos. Two panel members abstained and one left the meeting before the vote.
“I find there to be very little clarity in the two days of analysis that we’ve been subjected to,” said Rebecca Killion, the panel’s patient representative. “This drug is not for everybody, but that may not mean that it’s not for anybody.”
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