Recently, Bristol-Myers Squibb Company (BMY) and AstraZeneca Plc (AZN) announced that the U.S. Food and Drug Administration (FDA) has accepted their application for reviewing the combination of a fixed dose of Onglyza (saxagliptin) and metformin for treating patients suffering from type II diabetes. While Onglyza is already available for the treatment of diabetes, metformin is a widely-used generic diabetes pill.

Onglyza is co-developed by Bristol-Myers and AstraZeneca. The partners submitted a New Drug Application (NDA) to the U.S. regulatory authority for saxagliptin/metformin HCl extended-release tablets on Dec 29, 2009.

The NDA is based on bioequivalence data and data from the Onglyza late-stage clinical trial program. The data included studies on the co-administration of Onglyza and immediate release metformin, as an adjunct to diet and exercise, in adult patients suffering from type II diabetes. The subjects in the program were either treatment-naïve or their disease was inadequately controlled by metformin alone.

As a reminder, Onglyza, a dipeptidyl peptidase-4 (DPP IV) inhibitor, contributed approximately $4 million to sales in the most recent quarter (ended Dec 31, 2009). The drug has been submitted to regulatory authorities in more than 50 countries, and is approved in 38 countries and launched in the United States (the FDA approved Onglyza in July 2009), Canada , Mexico , Germany , UK and Denmark .

Onglyza is used as an adjunct to diet and exercise to improve glycemic control in adults suffering from type II diabetes mellitus. However, the drug should not be used for treating patients with type I diabetes mellitus or diabetic ketoacidosis. Furthermore, the drug has not been studied in combination with insulin. The most common adverse effects associated with Onglyza are upper respiratory tract infection, headache, nasopharyngitis and infection in the urinary tract.

Currently, we are Neutral on Bristol-Myers Squibb. The recommendation implies that the stock is expected to perform in line with the overall U.S. equity market over the next six to twelve months. Therefore, we advise investors to retain the stock over this time period.
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