Drug giant AstraZeneca was denied approval of a diabetes drug combination treatment by U.S. regulators, citing the need for more clinical information.
The London-based firm said Friday that it had received a letter from the Food and Drug Administration requesting more clinical data for its new drug application for a combination treatment of its previously approved Type 2 diabetes therapies saxagliptin and dapagliflozin, known by their brand names as Onglyza and Farxiga.
Morningstar analyst Damien Conover said he expected the denial would serve only to delay the product's ultimate approval since both of its components are already approved for individual use.
AstraZeneca did not provide information as to the specific concerns the FDA cited in its disapproval. The company stated that the data requested included information from “ongoing and completed studies and may require information from new studies.”
The denial will be a blow for AstraZeneca, which has speculated annual sales of up to $3 billion from its combination product. A delay in its approval could set the company back in its efforts to grab sizeable share in a market that, with the introduction of several blockbuster drugs, has become increasingly competitive in recent years.
Despite the setback, Conover said AstraZeneca's drug combination was still likely to generate the revenue it has projected upon approval. Much of that success will hinge largely on Farxiga, which belongs to a newer class of diabetes drugs known as SGLT2 inhibitors that block reabsorption of glucose by the kidney and remove excess glucose through urination.
Sales of Farxiga reached $205 million for the first half of 2015, according to company filings. In May, the FDA issued a warning letter regarding SGLT2 inhibitors such as Farxiga, as well as competing drugs Jardiance from Ely Lilly, and Johnson & Johnson's Invokana over concerns that such drugs could lead to the development of ketoacidosis, or high acid levels in the blood.
“Farxiga looks like it could belong to a class of drugs that could potentially be very powerful in treating diabetes as well as cardiovascular disease,” Conover said. Farxiga's success will depend on whether the outcomes of post-market studies are comparable to those of Jardiance, which was found to significantly decrease rates of cardiovascular death and hospitalization, according to a study published in September in the New England Journal of Medicine.
Shares of AstraZeneca were down by 7 cents to $32.17 during afternoon trading on Friday.