FDA OKs AstraZeneca's rare disease drug, but only for a subset of patients

The FDA approved AstraZeneca's ($AZN) drug for a diabetes-related rare disease--but, following a vote from a panel of advisers, the agency cleared it only for a portion of a tiny patient population. The decision put a clamp on already staid sales estimates.

AstraZeneca had hoped to get metreleptin approved to treat patients with metabolic disorders associated with partial lipodystrophy (LD), a potentially deadly condition that robs patients of the essential hormone leptin and affects a few thousand people around the globe. But regulators were unimpressed with the data on patients with partial LD and instead indicated the injection for the even rarer generalized form of the disease, in which patients are born with little or no leptin-producing fat tissue, putting them at risk for Type 2 diabetes, high triglycerides and fatty liver disease, AstraZeneca said.

The drug, which will sell as Myalept, could have brought in $300 million at its peak with a partial LD indication, according to JPMorgan; sales in generalized LD will presumably be much smaller. But AstraZeneca isn't giving up on its hoped-for label, saying after a December rebuke by FDA advisers that it would work with the agency to "identify the appropriate patients with partial LD who may benefit from metreleptin."

Whatever the drug's sales turn out to be, they'll be all AstraZeneca's. The company got full dibs on metreleptin through its just-closed buyout of ex-partner Bristol-Myers Squibb ($BMY), a takeover of the once-heralded Diabetes Inc., that could cost the U.K. giant as much as $4.1 billion in total. And while AstraZeneca expressed some excitement about metreleptin's potential, the belle of the breakup is dapagliflozin--FDA-approved to sell as Farxiga--a diabetes drug in the SGLT2 class that analyst say could bring in anywhere from $600 million to $1.5 billion at its peak.

Now that metreleptin is approved, the FDA is demanding 7 postmarketing studies and requesting another 8, looking to keep tabs on antibody development and serious adverse events. The drug was initially developed as an obesity treatment by Amylin, which Bristol-Myers and AstraZeneca bought for $7 billion in 2012.

- read the FDA's announcement