Januvia and Janumet: Merck’s Blockbuster Diabetes Products



Januvia and Janumet

Januvia and Janumet are two blockbuster drugs in Merck & Co.’s (MRK) Diabetes franchise. These drugs are used to lower blood sugar levels in patients with type 2 diabetes. The combined sales for these drugs totaled ~$1.6 billion for 3Q16. This figure is a 2% decline at constant exchange rates, offset by 1% positive foreign exchange impact. The company experienced a 1% fall in total sales for these drugs in 3Q16 compared to 3Q15.

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What makes Januvia and Janumet special?

Januvia and its combination version, Janumet, are drugs classified as DPP-4 inhibitors. DPP-4 is an enzyme, called Dipeptidyl Peptidase-4. This enzyme removes incretin from the human body in normal cases for people without type 2 diabetes. However, people with type 2 diabetes require these DPP-4 inhibitors in order to prevent low blood sugar and weight gain.

Januvia has a very high share in Japan, as DPP-4 inhibitors have more patient days of therapy than other treatments. Japan has always been a very fast uptake market for DPP-4 usage.

The competitors for Januvia and Janumet are Onglyza jointly made by Bristol-Myers Squibb (BMY) and AstraZeneca (AZN), and Galvus from Novartis (NVS). Recently, Januvia was confirmed by the American Diabetes Association to have a high safety profile and no risk of major adverse cardiovascular events or hospitalization for heart failure. According to the FDA’s report, there were few concerns with Onglyza’s safety profile.

Apart from Januvia, Merck has received marketing authorization for Marizev in Japan. Marizev is a once-weekly DPP-4 inhibitor. Merck is in the process of filing of Omarigliptin, the generic name of Marizev in the US, and it expects to complete this filing by end of 2016.

Marizev currently has a limit of a two-week prescription. However, this limit will be removed, and Marizev is expected to be a blockbuster drug in the DPP-4 class.

Contribution of Januvia and Janumet

Januvia and Janumet together contributed ~14.7% of Merck’s (MRK) total revenues for 3Q16, an ~0.9% decrease compared to 3Q15. Further, these drugs are estimated to contribute over 15% for 4Q16.

Investors can consider funds like the SPDR S&P Pharmaceutical ETF (XPH), which holds ~4.4% of its total assets in Merck, in order to diversify the risk.


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