Avandia Risks May Cost Glaxo $300 Million in Alzheimer's Sales

-Bloomberg

12/13/2007 - GlaxoSmithKline Plc is likely to delay marketing its troubled Avandia diabetes pill as an Alzheimer's disease treatment because patients are reluctant to volunteer for research studies.

Glaxo, Europe's largest drugmaker, has lost more than 33 percent of Avandia's $3.3 billion in annual sales since a report in May tied the pill to heart attacks.

Glaxo is trying to transform the drug into an Alzheimer's therapy after a preliminary study in 2005 suggested that Avandia may improve memory in some patients.

Doctors who are running the new trials say the heart-risk concern has slowed patient recruitment. The Alzheimer's use may bring in $300 million of the more than $1 billion in lost annual revenue, according to London-based analyst Matthew Weston and colleagues at Lehman Brothers Holdings Inc. The delay may disappoint investors when the company gives an update today on its research. Of 35 analysts surveyed by Bloomberg, 12 rate Glaxo a buy and 12 say it is a hold.

``We're going to need an additional year,'' said Suzanne Craft, a researcher at the Veterans Affairs Puget Sound Health Care System in Seattle who is involved in the trials. ``Many people are choosing to leave the study or their physicians are recommending that they don't enroll in this study if they don't have cardiac disease.''

London-based Glaxo has fallen 10 percent since Avandia's safety concerns were raised. Attracting volunteers may get harder after Canadian researchers reported yesterday that older people taking Avandia and Osaka, Japan-based Takeda Pharmaceutical Co.'s Actos had a higher risk of heart attacks than those taking other diabetes medicines.

Scare Off Patients

Even if approved for Alzheimer's, the heart attack reports may scare off doctors and patients. ``At the moment the risks outweigh any benefits'' for Avandia as a dementia drug, said Standard & Poor's analyst Sho Matsubara, who rates Glaxo a ``buy.''

Glaxo shares rose 8 pence to 1,314 pence in London yesterday. Glaxo earned 94.5 pence a share in 2006 on sales of 23.2 billion pounds ($47.4 billion). The Alzheimer's use would increase Glaxo's earnings by about a penny a share, according to the Lehman analysts. They estimate the product has a 10 percent chance of reaching the market, perhaps in 2010.

Revenue from Avandia, the company's second-best selling product, dropped 38 percent in the third quarter worldwide after a New England Journal of Medicine report linked it to a higher risk of heart attacks and doctors stopped prescribing it to diabetics.

`Lot of Damage'

The publicity ``has done a lot of damage,'' said Allen Roses, a neurology professor at Duke University who was a Glaxo senior vice president until October. ``It has scared the doctors, it has scared the patients. It's damaged the recruitment significantly.''

Company officials said Avandia's woes had a ``slight dampening'' effect on their ability to attract patients to the three Alzheimer's trials. Recruitment is complete in one and all patients should be enrolled in the others by the end of January.

``Overall it hasn't really made a significant impact at all,'' Glaxo Senior Vice President Jackie Hunter said in an interview.

Alzheimer's drug sales will rise 3 percent to $5.1 billion between 2006 and 2011, three times the rate of other central nervous system treatments, Lehman analysts said. About 18 million people worldwide have Alzheimer's disease, according to the World Health Organization. The figure is projected to almost double to 34 million by 2025. The progressive illness destroys brain cells and impairs memory and thinking in older people.

Current Treatments

Current treatments, such as Eisai Co.'s Aricept, Novartis AG's Exelon, Johnson & Johnson's Razadyne, H. Lundbeck A/S's Ebixa and Forest Laboratories Inc.'s Namenda aim to manage symptoms, don't work well for all patients and some may cause stomach and intestinal side effects, doctors said.

In the 1990s, Seattle researcher Craft looked at whether Warner Lambert Co.'s Rezulin diabetes pill, which belongs to the same class of drugs as Avandia, might benefit Alzheimer's sufferers. When Rezulin was linked to liver damage and withdrawn from the market in 2000, she turned to Avandia, which had been approved a year earlier.

Scientists say Avandia may work in Alzheimer's disease by better regulating sugar levels in patient's brains, much as it helps regulate diabetics' blood sugar. Some even call the illness ``diabetes of the brain.'' The medicine may also reduce brain inflammation that contributes to the ailment and restore normal function to damaged energy centers in brain cells.

Patient Benefit

``In Alzheimer's disease it appears that insulin is not working normally in the brain,'' Craft said. ``Part of it has to do with getting energy to the parts of the brain that are supporting thinking and other cognitive abilities. Part of it has to do with insulin's role in regulating proteins in the brain.''

In mid-stage studies, Avandia was as safe as a placebo and added about three points to the scores of Alzheimer's patients taking it on the 70-point cognitive section of the Alzheimer's Disease Assessment Scale. Patients who benefited the most from the treatment didn't carry the Apoliprotein E4 gene, an indicator of susceptibility to the disease which about half of Alzheimer's sufferers carry.

At regulators' request, half of the 4,000 patients enrolling in the current trials have the ApoE4 gene and half don't. Data from the 12-month studies should be available in 2009, Hunter said. That may be up to a year later than previously planned, Roses said. Regulatory approval can take an additional year or two.

Slow Answer

``Avandia could have had an answer in 2008,'' Roses said. ``This could slow getting a drug for Alzheimer's disease to the public.''

If regulators approve it, Glaxo will need to find ways to overcome Avandia's association with heart attacks. The separate extended-release formulation for Alzheimer's disease may be one way to differentiate the product from the diabetes pill, analyst Irina Stratan of WestLB AG in London said. Giving it a name other than Avandia may be another, Stratan said.

If you or a loved one have experienced an Avandia heart attack, or Avandia stroke, Avandia congestive heart failure, Avandia cardiovascular disease or if you have lost a loved one to an Avandia death you may be entitled to compensation. Contact the Avandia attorneys of Ennis & Ennis today for a free confidential case evaluation. Our on staff nurse and lawyers are standing by to answer any questions you may have regarding Avandia's side effects, a possible Avandia class action lawsuit, or any other type of Avandia litigation