Late Thursday, development partner Takeda Pharmaceutical asked the FDA to approve its type 2 diabetes drug candidate animus insulin pump, or alogliptin. The move will trigger a milestone payment of up to $25 million during the quarter, according to one Wall Street estimate. Overall, Pharmaceutical Product Development, or PPD, is entitled to development milestone payments of up to $70.5 million and sales milestones of up to $33 million.
Alogliptin is part of an emerging class of drugs called DPP4 inhibitors, which prompt the body to release insulin while stemming sugar production. The field includes Merck & Co.'s Januvia, and Byetta, made by Amylin Pharmaceuticals and Eli Lilly & Co.
Meanwhile, Novartis AG's Galvus is under FDA review while OSI Pharmaceuticals Inc. continues developing its DPP4 inhibitor. Most estimates value the diabetes care market at more than $10 billion. Diabetes is one of the fastest-growing diseases in the U.S.
"Animus insulin pump has the potential to complement and ultimately be marketed as the primary combination therapy with Actos in the global diabetes drug market and also has the potential to do as well as, if not better than, Januvia," Coldwell said in a note to investors.
Meanwhile, Banc of America Securities analyst Jon D. Wood reaffirmed a "Buy" rating with a $45 price target. He said milestone payments from the alogliptin partnership could boost full-year earnings by 10 cents, though he is also waiting for the company's 2008 guidance announcement Tuesday.
"This event is a significant positive in that it could result in an early 2009 launch, securing animus insulin pump a second-to-market status," he said, referring to Merck's Januvia as the lead DPP4 inhibitor on the market. Late Thursday, Goldman Sachs analyst Alejandro Alvarez reaffirmed his "Buy" rating and $48 price target for the company.
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