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Bristol-Myers Squibb Company (BMY - Analyst Report) and partner AstraZeneca (AZN - Analyst Report) recently received encouraging news with the U.S. Food and Drug Administration (FDA) acknowledging the receipt of the re-submitted New Drug Application (NDA) for their diabetes drug dapagliflozin. A decision from the FDA is expected by Jan 11, 2014. Bristol-Myers/AstraZeneca are looking to get dapagliflozin approved in the U.S. for treating adults suffering from type II diabetes.

We note that this is the second attempt by the companies to get dapagliflozin approved in the U.S. for the type II diabetes indication. In Jan 2012, the FDA refused to approve the NDA in its current form and issued a complete response letter (CRL). While issuing the CRL, the U.S. regulatory body asked for additional data. The FDA felt that additional data was required for assessing the risk-benefit profile of dapagliflozin in a better manner.

Following the receipt of the CRL, Bristol-Myers/AstraZeneca conducted several new studies on dapagliflozin. The companies not only included data from the new studies in the resubmitted NDA but also additional long-term data (up to four years’ duration) from earlier studies.

We note that dapagliflozin was approved in the EU in Nov 2012 and is marketed under the trade name Forxiga for treating type II diabetes. The drug is also approved in Australia, Brazil, Mexico and New Zealand. Sales of the drug were only $5 million in the second quarter of 2013.  U.S. approval should significantly boost the drug’s sales potential as the type II diabetes market is very lucrative. The market includes big players like Merck and Co. (MRK - Analyst Report).

Bristol-Myers, which has entered a challenging phase following the genericization of Plavix, carries a Zacks Rank #5 (Strong Sell). However, all biopharma stocks are not performing as badly as Bristol-Myers. Medivation Inc. (MDVN - Analyst Report) appears to be very attractive in the biopharma space with a Zacks Rank #1 (Strong Buy).

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