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Performance of Merck’s Diabetes Drugs in 1Q17

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Merck’s diabetes drugs

Merck & Co.’s (MRK) diabetes drugs are used for controlling sugar levels for patients with diabetes. The diabetes portfolio includes two blockbuster drugs—Januvia and Janumet—that are used for lowering the blood sugar levels in patients with type 2 diabetes.

In 1Q17, Januvia and Janumet reported combined revenues of ~$1.3 billion. The reported revenues fell 5% due to lower sales of the drugs compared to ~$1.4 billion for 1Q16.

Januvia has a strong market presence in Japan, and these revenues increased as DPP-4 inhibitors have more patient days of therapy than other treatments.

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Januvia and Janumet

Januvia and Janumet are DPP-4 inhibitors that help maintain lower blood sugar levels. DPP-4 is an enzyme, Dipeptidyl Peptidase-4, that removes incretin from the body.

Januvia and Janumet compete with other drugs like Onglyza, which was co-developed by Bristol-Myers Squibb (BMY) and AstraZeneca (AZN). However, according to FDA reports, there were a few safety profile concerns with Onglyza. The American Diabetes Association confirmed a high safety profile for Januvia. No risks for major adverse cardiovascular events or hospitalization for heart failure were reported in Januvia.

Revenues

The combined revenues from Januvia and Janumet comprised ~14% of Merck’s total revenues during 1Q17. However, these drugs are expected to contribute ~15% of total revenues for 2017.

For diversified exposure to the industry, investors can consider the iShares S&P Global Healthcare ETF (IXJ), which holds ~4.4% of its total assets in Merck. IXJ also holds 4.9% in Pfizer (PFE), 2.1% in Bristol-Myers Squibb (BMY), and 1.8% in AstraZeneca (AZN).

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