Developing drugs to treat the twin epidemics of obesity and diabetes should be a gold mine for drugmakers. In fact, it is turning out to be a minefield.
Among a series of upsets this year, a U.S. advisory panel recommended against approval of Sanofi-Aventis SA obesity pill Acomplia, and GlaxoSmithKline Plc diabetes drug Avandia was hit by a heart-attack scare that is expected to weigh on second-quarter results in its report next week.
At the same time, Novartis AG faces a lengthy delay to experimental diabetes medicine Galvus in the United States, and Pfizer Inc.'s recently launched inhaled insulin drug, Exubera, has failed to sell well.
Novel treatments for obesity and diabetes remain high on the wish-list of most pharmaceutical company executives, but getting products through clinical trials, past regulators and widely used in clinical practice is a tough fight.
According to data compiled for Reuters by consultancy Evaluate, as many products have failed in development for obesity as are currently in active development -- a total of 74 in the pipeline against 77 abandoned.
For diabetes, there are 253 development projects and 188 abandoned.
It's a pretty dire state of affairs, said Jonathan de Pass, head of London-based Evaluate.
The deeper you go, the more complex this whole area is. There is no lack of optimism that a better approach can be developed but it is just not happening at the moment.
Failure, of course, is nothing new in drug development. But the chronic nature of obesity and diabetes and the fact that they do not cause mortality directly make it hard to prove the value of medicines unequivocally.
Taking drugs for a long time also increases the likelihood that relatively rare side effects will emerge.
Critics argue that the blunderbuss approach of some medicines lies at the heart of the problem.
In a letter to the European Medicines Agency (EMEA) this week, Dr Sidney Wolfe of the consumer group Public Citizen called for Acomplia to be pulled in Europe due to psychiatric side effects caused by the drug, which modulates the effects of a widespread and little studied neurotransmitter system.
Similarly, Dr Steven Nissen of the U.S. Cleveland Clinic, who raised concerns about Avandia in May, says that so-called PPAR drugs like Glaxo's turn on and off as many as 100 genes, the function of most of which is unknown.
The whole issue is complicated for drug companies by conflicting signals from regulators, as highlighted by two decisions from the EMEA this week.
In sharp contrast to the cautious approach of the U.S. Food and Drug Administration, the EMEA on Thursday recommended approval of Novartis's Galvus in Europe, allowing it to compete with Merck & Co. Inc.'s similar product, Januvia.
The European regulator also decided to keep Sanofi's Acomplia on the market, albeit with a reinforced warning that it should not be given to people with depression.
The different approaches suggests the FDA is in ultra-cautious mood compared with the Europeans, according to Paul Diggle, an industry analyst at Nomura Securities.
This is not a great year to have your product hit the FDA's desk, he said.
For investors, caution has become the watchword as well. Shares in both Sanofi and Glaxo have plunged in the past two months, sending the stocks to the bottom of the rating table at 11.4 and 12.2 times expected 2008 earnings, respectively.
Despite the recent setbacks, however, analysts do not expect big drugmakers to throw in the towel. The rapidly rising levels of obesity around the world, which in turn drives up rates of type 2 diabetes, is simply too big a prize.
There is such huge demand out there, this is a natural market, according to Martin Hall of stockbroking and asset management firm Eden Financial.