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FDA probe of diabetes medications hurts drugmakers' stock

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Shares of several pharmaceutical companies that make widely used, newer diabetes medicines fell Thursday, after U.S. regulators warned they are looking into potential risks of drugs in two classes of diabetes treatments.

The Food and Drug Administration said it is seeking more information about evidence found by academic researchers that the two groups of drugs can raise the risk of inflammation of the pancreas and cellular changes in the insulin-making organ that occur before cancer. However, the agency recommended patients keep taking their medicine until they discuss it with their doctor.

Shares of Eli Lilly and Co. of Indianapolis, which sells the pills Tradjenta and Jentadueto, fell 39 cents, or 0.7 percent, to $55.07 Thursday and continued to drop Friday morning. Shares were down to $54.88 by late morning.

Merck & Co., based in Whitehouse Station, N.J., and Denmark's Novo Nordisk A/S were hardest hit, as their drugs in question account for 12 percent of each company's annual revenue.

Merck makes Januvia and three drugs that combine its active ingredient with another medicine: Janumet, extended-release Janumet and Juvisync. Those drugs brought in a total of about $5.75 billion last year. That makes them the company's biggest franchise since allergy and asthma drug Singulair, which had been bringing in about $5.5 billion a year, had its U.S. patent expire in August.

Merck shares fell 44 cents, or about 1 percent, to $44.27, after initially falling 2.2 percent.

Novo Nordisk's U.S. shares fell $1.16, to $17 each.

Novo makes the once-a-day injection Victoza, which brought in about $1.7 billion last year. That's far less than the Merck drugs, but Novo Nordisk is known as the world's biggest seller of insulin and about 80 percent of its total revenue comes from products to treat diabetes.

Doctors have been concerned that this category of diabetes treatments may damage the pancreas since the FDA said in 2007 it received a high number of reports of pancreatitis in patients taking Byetta. The agency issued a similar alert for Januvia in 2009. An analysis of insurance records published last month in the journal JAMA Internal Medicine showed such drugs may double a user’s risk of pancreatitis.

The drugs in the class include exenatide, liraglutide, sitagliptin, saxagliptin, alogliptin and linagliptin. They mimic incretin hormones that the body usually produces naturally to stimulate the release of insulin in response to a meal, the FDA said.

The FDA said it hasn’t reached any new conclusions about the safety risks associated with the drugs and hasn’t determined whether they may cause or contribute to pancreatic cancer.

Merck, the second-largest U.S. drugmaker, reported $4 billion in sales, or about 9 percent of total revenue, from Januvia last year. The daily pill blocks an enzyme that breaks down GLP-1. Janumet, which combines Januvia with the older diabetes drug metformin, generated $1.7 billion in sales last year for Merck.

Bristol-Myers, which has been expanding its diabetes business with partner AstraZeneca PLC of Great Britain, now sells four diabetes drugs: injections Byetta and Bydureon and the pills Onglyza and Kombiglyze.

Bristol-Myers, based in New York, acquired Byetta when it bought Amylin Pharmaceuticals last year. Byetta, which mimics GLP-1, had sales of $148 million for Bristol-Myers last year, and $159 million for Lilly, which ended its marketing partnership with Amylin in 2011.

The remaining three drugs now under scrutiny are lesser-known pills sold by Japan's Takeda Pharmaceuticals: Nesina, Kazano and Oseni.

The injected drugs are all in the class called GLP-1 and are taken by nearly 1 million Americans, according to health data firm Kantar Health. These drugs work by mimicking the effects of a natural hormone that causes the body to make more insulin, the hormone that reduces levels of sugar in the blood by making it enter cells that turn the sugar, or glucose, into energy.

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