A Wall Street analyst is warning investors that Merck may be headed into troubled waters due to problems with Januvia, its blockbuster diabetes drug.
Sales of Januvia declined by 4% in the first quarter of 2012, amid increasing competition and mounting concerns in the medical community about a potential risk of pancreatic cancer from Januvia side effects.
On July 18, BMO Capital Markets analyst Alex Afraei downgraded the rating of Merck’s shares from “Outperform” to “Market Perform,” predicting that Januvia sales would continue to disappoint. Afraei cited competition from newer diabetes drugs, and predicted that drug development problems may lead Merck to attempt to buy another company.
Januvia (sitagliptin) is a type 2 diabetes drug introduced by Merck in 2006, which is part of a relatively new class of medications known as incretin mimetics. A combination pill containing Januvia and the older diabetes drug metformin was introduced by Merck in 2007, under the brand name Janumet. Together, the medications are best sellers for the global pharmaceutical company, generating about $4 billion in sales last year.
Januvia Pancreatic Cancer Concerns
The downgrade comes amid continuing concerns in the medical community about the impact of Januvia and other incretin mimetic diabetes drugs on the pancreas, including a potential risk of pancreatic cancer users may face.
In March, the FDA launched an investigation into the potential pancreatic cancer risk associated with Januvia and other incretin mimetics. The safety review was initiated after results of a recent study identified pre-cancerous cellular changes in pancreatic tissue taken from individuals treated with one of the drugs. European health officials have also launched a similar review.
A growing number of Januvia lawsuits, Janumet lawsuits, Byetta lawsuits and Victoza lawsuits have been filed in courts throughout the U.S. on behalf of individuals diagnosed with pancreatic cancer, alleging that the manufacturers of these drugs placed their desire for profits before consumer safety by withholding information about the potential risk of pancreatic cancer.
Later this week, a panel of federal judges are scheduled to hear oral arguments on a motion to consolidate the incretin mimetic litigation involving pancreatic cancer, which would centralize all cases brought in U.S. District Courts throughout the country before one judge for coordinated handling during pretrial proceedings and any bellwether trials.
All of the claims involve common allegations that the drug makers knew or should have known about the risk of pancreatic cancer and failed to adequately warn users or the medical community. Plaintiffs maintain that if they had known about the potential side effects they may have elected to use other diabetes treatments or to carefully monitor for any changes to their pancreas during treatment with Januvia, Janumet, Byetta or Victoza.
In the analyst report, Afraei indicated that a number of diabetics may be drawn away from Januvia following the recent approval of Johnson & Johnson’s Invokana in March, which is the first in yet another new class of diabetes medications.