By lunch time yesterday, Merck stock was falling much more precipitously than the rest of pharma on the NYSE -- Merck shares ended the day down over 2.4 percent, on about double normal volume -- 22 million shares changing hands v. an 11 million share average day. Ouch.
The most-likely explanation is that Bristol-Myers-Squibb and AstraZeneca's diabetes drug Kombiglyze XR® was approved by FDA at lunch, yesterday -- and it will directly compete with Merck's Januvia® and Janumet®. Moreover, Kombiglyze's extended release formulation offers a patient-ease (and comfort) advantage -- as well as a likely lower risk profile for pancreatitis, as compared to Merck's franchises.
Here is a bit of the Bloomberg story on it:
. . . .The medicine, called Kombiglyze XR, brings together extended-release version of the metformin diabetes drug with the companies’ Onglyza, cleared for U.S. sales in July. The new pill was approved by the U.S. Food and Drug Administration to treat patients with Type 2 diabetes, the companies said in a statement.
Bristol-Myers, based in New York, and London-based AstraZeneca have been working together on diabetes drugs since January 2007. About 24 million Americans have the condition, which occurs when people don’t have enough insulin, limiting their ability to convert blood sugar to energy. Onglyza competes with Whitehouse Station, New Jersey-based Merck & Co.’s Januvia in a category of medicines called DPP-4 inhibitors that spur the pancreas to make more insulin and cause the liver to produce less glucose. . . .
Previously, Merck has faced concerns about increased risks of pancreatitis with FDA on the franchise, as the above graphic indicates. We'll keep you posted.