Two pharmaceutical companies – Merck & Co Inc. and Pfizer Inc. – have just announced that they have partnered up for the development of the type 2 diabetes drug ertugliflozin (PF-04971729), an investigational oral sodium glucose cotransporter (SGLT2) inhibitor.

There’s been a huge rise in the number of treatment options for people suffering from diabetes over the past years, with close to 25 million Americans diagnosed with diabetes, the condition costs the U.S. over $245 billion a year. Demand for more effective medications continues to grow apace, as many patients currently have to take more than one medication to regulate sugar levels and insulin.

SGLT2 inhibitors work by excreting glucose in urine, which helps stabilize sugar levels.

There is currently fierce competition to get SGLT2 medications approved and onto the market. A few weeks ago, the first SGLT2 drug called Invokana (canagliflozin), developed by Johnson and Johnson, was approved by the U.S. FDA. Bristol-Myers Squibb’s and AstraZeneca’s SGLT2 drug Forxiga, on the other hand, was rejected.

The president of Pfizer Primary Care, John Young, said:

“We are pleased to join forces with Merck in the battle against type 2 diabetes and the burden that it poses on global health. Through this collaboration, we believe we can build on Merck’s leadership position in diabetes care with the introduction of ertugliflozin, an innovative SGLT2 inhibitor discovered by Pfizer scientists.”

Ertugliflozin, which is ready for its Phase III trials, will likely eventually be marketed as a drug to be taken on its own as a fixed-dose, or in combination with metformin and JANUVIA (sitablipin), both oral antihyperglycemic agents.

Last year, Januvia generated over $4 billion in sales, while its sister drug Janumet brought in a further $4 billion. However, the safety of the medication is under investigation by the FDA to determine whether it is associated with an increased risk of developing pancreatic cancer, the findings could have a serious impact on Merck’s income.

Merck made a total payment of $60 million to Pfizer and will share the revenue and costs on a 60/40 percent basis.

Nancy Thornberry, senior vice president and Diabetes and Endocrinology franchise head, Merck Research Laboratories, said:

“Merck continues to build upon our leadership position in the oral treatment of type 2 diabetes through our own research and business development. We believe ertugliflozin has the potential to complement our strong portfolio of investigational and marketed products, and we look forward to collaborating with Pfizer on its development.”

It’s come to many as a surprise that these two rivals are teaming up to develop new drugs.

Written by Joseph Nordqvist