After the stock market closed last night, New York-based Bristol-Myers Squibb (NYSE: [[ticker:BMY]]) announced that a cocktail containing two of its experimental drugs to treat hepatitis C obliterated the virus in some patients in a Phase 2 study. The results were so compelling the company used the “C” word in a press release, declaring, “This study was the first study to demonstrate the possibility that hepatitis C can be cured,” without interferon, which has to be injected and can cause side effects.
But the good news was quickly overshadowed by bad news from the FDA on another Bristol drug, dapagliflozin, which the company and its development partner, AstraZeneca (NYSE: [[ticker:AZN]]), had submitted for approval in Type 2 diabetes. At about 2 a.m., the companies announced that the FDA had issued a dreaded “complete response letter,” requesting additional data to help better assess the risk/benefit profile of the drug.
The FDA’s response was no surprise. In July, an advisory panel to the FDA voted nine-to-six against approving dapagliflozin. Although the agency doesn’t have to follow the recommendations of its advisory panels, it usually does. Dapagliflozin is part of a new class of drugs designed to inhibit SGLT2, a protein that promotes glucose absorption. The July assessment of Bristol’s drug was so harsh some Wall Street analysts declared the death of the entire SGLT2 class. In today’s statement, though, Bristol and AstraZeneca said they “remain committed to dapagliflozin and its development.”
Investors will be more likely to find something to cheer about in Bristol’s experimental hepatitis treatments, daclatasvir and asunaprevir. Both drugs target a subset of patients who have a particular genotype and who haven’t responded to the commonly used treatments interferon and ribavirin. With this recent study, the company reached its goal of proving that the combination would render the virus undetectable in some patients. A Phase 3 study of the dual treatment is now underway, meaning investors looking for some indication of how it works in a large patient population will have to wait a while.
Not surprisingly, Wall Street is focusing today on the bad news in diabetes. Shares of Bristol dipped about 1 percent to $33.42 in pre-market trading, and shares of AstraZeneca were down nearly 2 percent to $47.30.
