Takeda Agrees to buy Rights to Amylin’s Obesity Drugs (Update3)

Nov. 2 (Bloomberg) — Japan’s Takeda Pharmaceutical co.,maker of the world’s top-selling diabetes treatment, will pay asmuch as $1 billion to Amylin Pharmaceuticals Inc. to co-developthe U.S. company’s obesity treatments.

Amylin rose 9.9 percent, the most since March, in Nasdaqtrading and Takeda dropped 1.4 percent in Tokyo. Takeda, basedin Osaka, will pay $75 million upfront for medicines includingAmylin’s experimental therapy that combines the diabetes drugSymlin with a form of leptin, a hormone implicated in weightloss, Takeda and San Diego-based Amylin said in a statement.

The purchase may help Takeda buffer losses after Actos, itstop seller with $4 billion generated for the year ended March31, loses patent protection in January 2011. The drugmaker needsproducts to replace sales lost when U.S. regulators delayedapproval of a combination diabetes therapy that includes Actos.

“The purchase will surely boost Takeda’s product lineup,”Takashi Akahane, a health-care analyst at Tokai Tokyo ResearchCenter co. in Tokyo, said by telephone today. “Still, this drugalone won’t be enough to make up for the sales decline in Actos,and the company needs to make more acquisitions.”

The agreement also includes davalintide, a next-generationform of Symlin being developed as an obesity treatment.Davalintide and the Symlin/leptin combination are in the secondphase of testing needed for U.S. regulatory approval. As much as$2 billion in annual sales await a safe and effective weight-loss drug, according to analyst Michael King, of Merriman CurhanFord & co. in San Francisco.

Takeda fell 1.4 percent to close at 3,600 yen, while thebenchmark Topix index dropped 1.6 percent. Amylin rose 9.9percent, or $1.09, to $12.13 at 4:15 p.m. New York time incomposite trading.

“What was most important to us was to find a partner whocould help us to advance compounds quickly, and achievesomething that we couldn’t by ourselves,” Amylin ChiefExecutive Officer Dan Bradbury said in a telephone interview.”We looked across the entire spectrum of companies, and lookedfor those with expertise in metabolic disease. We also wantedsomeone with a global presence.”

Amylin’s biggest product is the diabetes drug Byetta, co-marketed with Eli Lilly & co. The injection had sales of $678.5million for Amylin last year, or about 81 percent of revenue.Byetta, injected twice daily, is a synthetic hormone that spurspancreas cells to make insulin when blood sugar is high.

Once-Weekly Version

Amylin and Lilly are trying to gain U.S. approval for aonce-weekly version of the product. On Oct. 30, U.S. regulatorsapproved Byetta as a stand-alone medication for those withdiabetes. Previously, it had been approved for use only withother medications. The once-weekly shot uses technologydeveloped by Alkermes Inc., of Cambridge, Massachusetts.

The number of obese adults may reach 700 million worldwideby 2015, from 400 million in 2005, the World Health Organizationestimates. About 34 percent of Americans are obese. Obesity isdefined as having a BMI greater than 30, which is equivalent toabout 186 pounds for a person who is 5 feet 6 inches tall.

Prescription-drug sales account for less than 1 percent ofthe $59 billion market for weight-loss products, fromNutrisystem meals to health-club memberships, according toMarketdata Enterprises Inc., in Tampa, Florida.

The best-selling weight-loss drug, Roche Holding AG’sXenical, generated $465 million in sales last year, followed byAbbott Laboratories’ Meridia with sales of $41 million andgeneric phentermine with $40 million, according to IMS HealthInc., a market data company in Norwalk, Connecticut.

The Takeda-Amylin agreement also will include othercompounds being developed by the two companies, according to thestatement dated Nov. 1. under the deal, Amylin gets addedpayments as they achieve certain milestones based ondevelopment, commercialization and sales, the statement said.

Takeda will pay 80 percent of costs linked with U.S. Foodand Drug Administration marketing approval and all of thedevelopment costs of obtaining clearance for approval ofproducts outside the U.S.

“Both Amylin and Takeda have extensive experience in thediabetes and metabolic disease area, and this collaborationshould allow us to more quickly bring promising new treatmentsto patients in need,” Takeda Chief Executive Officer YasuchikaHasegawa said in the statement.

Regulatory Setback

Takeda, Asia’s biggest drugmaker, failed to win FDAapproval for its experimental diabetes medicine alogliptin and atreatment combining Actos and alogliptin after regulators askedfor more safety data. The company was counting on those drugs toreplace Actos.

The FDA said it wants more information, consistent with arequest in June for additional data on heart risks relating toalogliptin as a single treatment.

Sales of Actos, which accounts for about one-quarter ofTakeda’s revenue, are already falling before the patent expiry.Revenue from Actos dropped 4.1 percent to 195 billion yen ($2.16billion) in the six months ended Sept. 30 as the stronger yeneroded the value of overseas earnings, Takeda said on Oct. 30.

Takeda is also developing an obesity compound calledcetilistat, which is in the last stage of clinical trialsgenerally required for regulatory review in Japan.

To contact the reporter on this story:Elizabeth Lopatto in New York at elopatto@bloomberg.net;Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net.

Last Updated: November 2, 2009 16:22 EST

As far as lorcaserin is concerned, the study results indicated the drug improved cardiovascular risk factors such as cholesterol and triglycerides, as well as quality of life factors such as physical function, self esteem and sexual enjoyment. The company now believes the data leaves Arena on track to file for regulatory approval late this year. And according to Reuters, Arena CEO Jack Lief said the company is in discussions with potential partners.

this study adds to earlier findings that 47.2 percent of subjects taking lorcaserin twice a day achieved at least a 5 percent reduction in weight — a key threshold — after a year. only 25 percent of patients who took a placebo achieved the same weight loss. The study involved 4,008 patients.

more specifically, of those who completed the treatment, 63.2 percent lost at least 5 percent of their weight, compared to 34.9 percent of patients on a placebo. And 35.1 percent of these lorcaserin patients lost at least 10 percent of their weight, compared to 16.1 percent for placebo.

Obesity is one of the nation’s most serious public health problems. According to the National Institutes of Health, 65 percent of U.S. adults are overweight or obese. The economic costs associated with obesity are significant, too, with the nation’s annual medical burden from the condition estimated at $147 billion in 2008, according to a recent report in Health Affairs.

Unquestionably, the market for diet drugs could be very large, which is why analysts believe there may be room for all three companies: Arena, Vivus and Orexigen. Since a 5 percent to 10 percent decrease in weight can be medically significant, there’s bound to be demand for the drugs. What’s more, each drug is designed to appeal to a specific group of patients.

The drugs belonging to Arena’s rivals achieved better weight-loss results. For example, Vivus’ Qnexa reduced patients’ weight by up to 14.7 percent (with the full dose), on average.

Arena is differentiating itself by trying to position lorcaserin as the safest of the drugs. While the other two drugs use phentermine which is know to increase blood pressure, Arena’s drugs sometimes even decreased it, as Lief told Xconomy’s Luke Timmerman.

Of course, all three experimental drugs will have to overcome the lingering stigma of Wyeth’s (WYE) fen-phen diet pill fiasco when officials linked the drug to heart-valve damage. Other attempts to develop such a drug by Sanofi Aventis (SNY), Pfizer (PFE) and Merck (MRK) failed because the candidates had serious side effects.

Lorcaserin is a new drug that actually works in a way similar to fenfluramine, part of the fen-phen combo, but is much more selective in the receptors it affects. The company said lorcaserin was not associated with heart-valve problems. It is designed to block appetite signals in the brain by stimulating the serotonin 2C receptor.

Arena said its trial found that lorcaserin helped reduce patients’ cardiovascular risk factors without increasing blood pressure or heart rate. as for the side effects, the most common ones were headache, nausea and fatigue.

Vivus’ drug is also a combo therapy that mixes the other generic drug in the fen-phen combo, phentermine, with the generic topiramate, sold as Topamax by Johnson & Johnson (JNJ ). The latter is known to have cognitive side effects such as diminished memory and concentration, which a Cowen analyst Tuesday said Vivus was hiding. Vivus, according to TheStreet.com denies it. Orexigen has two candidates, Contrave, which also mixes two generics and is in late-stage studies, and Empatic, in middle-stage trials.

Orexigen also released drug trial data for Contrave on Tuesday. The data showed that approximately 25 percent to 33 percent of patients lost 10 percent or more of their body weight and 12 percent to 16 percent lost at least 15 percent. Orexigen might also market its drug as reducing blood sugar levels.

For now, it seems that Vivus’ drug wins in the weight-loss department. meanwhile, if you ask Arena, it will say its drug’s safety profile is the best. perhaps there could be room for other, less aggressive, treatments in the market, depending on the patient. The pressure’s on, though. at least half a dozen other companies are also in earlier stages of developing weight-loss drugs.