Bristol, AstraZeneca chalk up EU approval for Forxiga after FDA rejection

Once again, European regulators have shown that they don't always see eye-to-eye with the their counterparts in the U.S. The European Commission welcomed a new diabetes drug from Bristol-Myers Squibb ($BMY) and AstraZeneca ($AZN), dubbed Forxiga, just months after FDA rejected it on safety worries.

It's a victory for the two drugmakers and their newly pumped-up diabetes partnership. Forxiga is the collaborative effort's fourth drug to win approval. It joins Onglyza and two Onglyza combo pills in the in-house stable. Along with Byetta and Bydureon, acquired with Amylin Pharmaceuticals earlier this year, the BMS-AZ partnership has a sizable set of products to promote.

The question is whether Forxiga will deliver the sort of sales AstraZeneca and Bristol-Myers are hoping for. Will it come out of the gate limping, a la Onglyza, which has fallen far short of its blockbuster promise? Possibly, thanks to that FDA rejection. Expectations for Forxiga aren't quite so high--earlier peak sales estimates stood at $700 million--but those will probably be toned down because of FDA's decision. In fact, analysts worry that the U.S. standoff will weigh on European sales, too.

But then again, Onglyza was something of a me-too product, while Forxiga is a first-in-class drug. It works independently of insulin, pushing blood glucose out of the body via the kidneys. It's designed to complement the usual metformin-plus-insulin treatment. And it appears to boost weight loss and lower blood pressure.

The two companies say they're planning to take another run at FDA approval next year, armed with fresh data from their clinical trials. Presumably that means they'll hand over analyses to quell the agency's concern about potential cancer risks. Meanwhile, other companies are developing potential head-to-head competitors to Forxiga, including Johnson & Johnson ($JNJ)--canagliflozin--and Pfizer ($PFE).

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Special Report: Top diabetes drug pipelines of 2012