Merck gains on approval for combo diabetes pill

Shares of Merck & Co. rose on Monday after the company won U.S. marketing approval for Janumet, which combines its recently introduced Januvia diabetes drug in the same tablet with the widely used metformin treatment.

Merck was up 74 cents, or 1.7 percent, to $44.91, in midday trade on the New York Stock Exchange, amid slight gains for the drug sector.

Janumet, by combining Januvia and metformin into a single product, is meant to help patients with Type 2 diabetes better control their blood sugar. That most common form of diabetes is highly linked with obesity.

Metformin, a member of the biguanide class of oral treatments, is the most widely used-diabetic drug in the United States. It was introduced more than a decade ago by Bristol-Myers Squibb Co. (BMY.N: Quote, Profile , Research) under the brand name Glucophage, but is now sold by many generic drugmakers.

The U.S. Food and Drug Administration in October approved use of Januvia either by itself or alongside metformin or another class of medicines called thiazolidinediones (TZDs) to treat type 2 diabetes.

Analysts have predicted Januvia, a member of a new class of drugs called DPP-4 inhibitors, would become a blockbuster medicine with annual sales of more than $1 billion.

"Over time, we wouldn't be surprised if Janumet overtakes Januvia as the preferred drug in its class as potency on the combined agent is superior to the single-agent pill," Morgan Stanley analyst Jami Rubin said in a research note.

She said combined annual sales of Januvia and Janumet are likely to reach $2.8 billion by 2011.
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