A new diabetes drug by Johnson & Johnson (NYSE:JNJ) got the Food and Drug Administration’s gold seal of approval this week, potentially bringing in over $100 million for the pharmaceutical company.
The New York Times reported that the type 2 diabetes drug, Invokana, will be sold at a competitive price of $8.77 per tablet. An estimated 26 million Americans live with type 2 diabetes and many may prefer Invokana—which causes blood sugar to be excreted in urine— opposed to other drugs that affect the supply of insulin, oftentimes through injection.
Lawrence Biegelsen, an analyst at Wells Fargo, estimated that the drug would bring in $111 million in profit in 2013, with that number skyrocketing to $667 million by 2016.
However, the drug is not without its side effects. Clinical trials revealed some signs of elevated stroke risk and a small increase in patients experiencing heart attacks. The F.D.A. ruled that the significance of the findings was unclear and did not require warnings about heart attacks or strokes on the Invokana label. However, they did require J&J to conduct five post-marketing studies to further test these risks.
All in all the F.D.A.’s ruling is a much-needed win for J&J, who was recently on the wrong end of a court ruling over one of their hip implants. The alternative way to treat type 2 diabetes Invokana offers is not the first of its kind, but it provides users with a legitimate company name to attach to a relatively new medicine.
Last year, the F.D.A. denied a similar drug by Bristol-Myers Squibb and AstraZeneca because of safety concerns. J&J’s ability to side step these troubles will pay nice dividends down the road.
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