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Biodel Inc. (BIOD - Snapshot Report) recently announced that it has completed enrolling patients in a phase II study on its diabetes candidate BIOD-123.

In the study, BIOD-123 will be compared with Eli Lilly and Company’s (LLY - Analyst Report) Humalog with respect to various parameters such as measures of HbA1c, weight changes, postprandial glucose excursions, glycemic variability and hypoglycemic event rates.

We note that the randomized, open label, parallel group study is being conducted across approximately 30 US sites. During the study approximately 130 patients suffering from type I diabetes will receive either BIOD-123 or Humalog as meal-time insulin during the therapy duration of 18 weeks. In the study the primary endpoint will be the evaluation of HbA1c control. The secondary endpoint will consist of postprandial glucose excursions, glycemic variability, hypoglycemic event rates and weight changes.

Biodel expects to report top-line data from the study in the third quarter of calendar 2013. Biodel’s fiscal year ends on Sep 30.

We note that Biodel focuses on the development and commercialization of innovative therapies for diabetes. In Jan 2013, the company announced encouraging top-line results from a phase I study on BIOD-238 and BIOD-250. BIOD-238 and BIOD-250 are combinations of the company’s proprietary excipients with the marketed version of Humalog.

We believe that the successful development and commercialization of the candidates will bring in significant revenues to Biodel since the diabetes market offers significant commercial potential.

Currently Biodel carries a Zacks Rank #2 (Buy). However, companies like QLT Inc. (QLTI - Analyst Report) and Lannett Company Inc. (LCI - Snapshot Report) look more attractive with both carrying a Zacks Rank #1 (Strong Buy).

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