Normally, our weekly look at what's going on within the health-care sectors involves a mixture of health-care conferences, FDA panel meetings and decisions, and a plethora of earnings reports. However, as we work our way into a holiday-shortened week thanks to Good Friday, it's very evident that the upcoming week is going to be dominated by two FDA rulings with few earnings reports and no major conferences on the docket.
J&J for the win?
With a PDUFA date of Sunday, March 31, the FDA is expected to relay its decision on Invokana, Johnson & Johnson's Type 2 diabetes drug. Invokana was studied in multiple late-stage trials in patients with an elevated risk for cardiovascular disease and was shown to reduce A1C levels at a much better rate than the placebo. The more interesting tidbit is that one of the placebos in trial was Merck's blockbuster drug Januvia, which my Foolish colleague Brian Orelli noted was beaten in every respect by Invokana.
An approval for Invokana would be extremely intriguing, as it's part of a new class of Type 2 diabetes drugs known as SGLT2 inhibitors. This new drug class works in the kidneys and inhibits the reabsorption of glucose so as to normalize glucose levels. At the moment, only one SGLT2 inhibitor is approved worldwide. That drug is AstraZeneca and Bristol-Myers Squibb's Forxiga, which is currently approved in Europe. However, it's worth noting that Forxiga received a complete response letter in the U.S. because of concerns from the FDA about the potential for the experimental drug to cause cancer.
The skinny is that Invokana appears to support approval based on clinical data, but preceding concerns from Forxiga’s rejection hang a cloud over a guaranteed approval. J&J will definitely be a name worth keeping an eye on in the coming week.
Should United Therapeutics shareholders calm down?
Also with a PDUFA date of March 31 (honestly, what was the FDA thinking with these dates?) is United Therapeutics , with its oral treatment for pulmonary arterial hypertension, known as Treprostinil.
This is actually a new drug application resubmission for United Therapeutics, which received a complete response letter in late October. In that CRL, the FDA questioned the clinical important of the six-minute walking-distance test demonstrated in its Freedom-M study, the inability of United Therapeutics to demonstrate an improvement in time to clinical worsening in all of its late-stage trials, and an inability to demonstrate a statistically significant improvement in the 6MWD in two of its Freedom-C trials.
United Therapeutics responded by resubmitting its NDA in mid-February, much more quickly than anyone had expected.This is noteworthy, because it appears that United Therapeutics has decided not to run any additional trials. Investors probably shouldn’t expect a huge move either way, but I'd say there’s more downside risk potential at these levels than upside potential if approved.
Is bigger really better?
Involved in everything from baby powder to biotech, Johnson & Johnson's critics are convinced that the company is spread way too thin. If you want to know if J&J is nothing but a bloated corporate whale -- or a well-diversified giant that's perfect for your portfolio -- check out The Fool's new premium report outlining the Johnson & Johnson story in terms that any investor can understand. Claim your copy by clicking here now.
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