Pharmaceutical giant Merck (NYSE: MRK - News) agreed to purchase Beverly, Massachusetts-based insulin maker SmartCells for as much as $500 million, boosting the firm's exposure the diabetes segment, which generated $2.58 billion in 2009 revenue. Miller Tabak portfolio manager Les Funtleyder told Bloomberg, "We obviously know diabetes is a big problem, both here in the U.S. and in emerging markets," adding that Merck is familiar with the class of drugs and the disease, "so it seems like a good deal."
Elsewhere in the Big Pharmaceutical Stocks Index, a 12-week study concluded earlier this year found that Johnson & Johnson's (NYSE: JNJ - News) first diabetes drug candidate reduced blood sugar by 0.8% to 0.9%, depending on the dosage, while Merck's Januvia reduced patients' blood sugar by 0.7%. However, the study lacked the sufficient number of patients to determine which treatment was actually better, according to a J&J statement.
Meanwhile, performance has been widely mixed among components of the Diabetes Stocks Index, where DepoMed (NASDAQ: DEPO - News), Array BioPharma (NASDAQ: ARRY - News), and MannKind (NASDAQ: MNKD - News) have all posted gains of more than 8% over the last three months amid a sharp slide by select peers.
Spherix (NASDAQ: SPEX - News), Biodel (NASDAQ: BIOD - News), Amylin Pharmaceuticals (NASDAQ: AMLN - News),and Generex Biotechnology (OTCBB: GNBT - News) have all slipped by -25% or more for the period. Amylin and Alkermes (NASDAQ: ALKS - News) both got slammed in October following a negative complete response letter from the FDA regarding their Bydureon drug, for which large-cap pharma player Eli Lilly & Co (NYSE: LLY - News) is also a development partner. Elsewhere, J&J terminated a diabetes drug development deal with Arena Pharmaceuticals (NASDAQ: ARNA - News) last month.
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