Johnson & Johnson (JNJ), Merck & Co., Inc. (MRK): New Approved Treatment for Type 2 Diabetes Will Give JNJ a Sugar Rush

Johnson & Johnson (NYSE:JNJ) just got the nod from the Food and Drug Administration for a new treatment of Type 2 diabetes.

The drug, Invokana, the very first of its kind, was given the okay after nine clinical trials involving more than 10,000 patients with Type 2 diabetes. The FDA has mandated five post-marketing studies for the just approved drug that is designed to help lower blood sugar by causing the excretion of glucose in urine.

The government agency’s endorsement of Invokana is a super sweet coup for Johnson & Johnson (NYSE:JNJ). While the drug behemoth has long sold a bevy of diabetes products like blood glucose meters, Invokana is Johnson & Johnson (NYSE:JNJ)’s first prescription treatment for the disease. The New Brunswick, NJ based pharmaceutical giant is also working on some additional promising treatments for diabetes.

By some analysts’ estimates, Invokana has the potential to bring in annual sales of a saccharine $500 million to $1 billion. That would be a cherry-on-top of Johnson & Johnson (NYSE:JNJ)’s $25.4 billion annual sales (for 2012).

Invokana in a League of Its Own

Invokana is a novel treatment for diabetes.

The drug’s mechanism of blocking sodium glucose in the kidney may have some doctors opting to prescribe the drug in only the most acute cases dues to concerns about effectiveness, safety and after-effects.

Merck & Co., Inc. (NYSE:MRK)’s oral diabetes pill Januvia may have an edge here. Sales of the blockbuster drug added $4 billion to Merck & Co., Inc. (NYSE:MRK)’s bottom-line last year.

But Januvia and Bristol Myers Squibb Co. (NYSE:BMY)’s Byetta, which earned $490 million in 2012, are currently under the microscope.

U.S. regulators are looking into the two diabetes treatments for a possible link to some serious side effects.

The FDA said in a mid-March statement it is reviewing unpublished findings by a group of academic researchers suggesting pre-cancerous cellular changes associated with the drugs. Additionally, the findings point to a reported increased risk for pancreatitis.

The results of the current review could wallop both Merck & Co., Inc. (NYSE:MRK) and Bristol Myers Squibb Co. (NYSE:BMY), not to mention the millions of type 2 diabetes patients.

Findings could also increase Invokana’s appeal.

Diabetes by the Numbers

To be sure, the incidence of diabetes is an increasing concern. The disease has grown to near epidemic proportions. Some 26 million Americans have diabetes, and an estimated 79 million adults have pre-diabetes.

According to data from the Centers for Disease Control and Prevention, diabetes affects 8.3% of all Americans, and 11.3% of adults age 20 and over. Moreover, roughly 27%, or 7 million Americans, have the ailment and don’t even know it.

If the current trend continues, as many as one in three U.S. adults could have diabetes by 2050. Type 2 diabetes, where the body progressively loses the ability to use and produce insulin, accounts for 90-95% of cases.

Diabetes complications include heart disease, stroke, obesity, vision loss, nerve damage, organ damage and amputation. It is the seventh leading cause of death in the America.

Statistics show diabetes cost the U.S. $23.7 million a year. Johnson & Johnson’s Invokana stands to help save a bundle in health care costs. That’s a fact that needs no sugar coating.

The article New Approved Treatment for Type 2 Diabetes Will Give JNJ a Sugar Rush originally appeared on Fool.com and is written by Diane Alter.

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