Always a bridesmaid

Always a bridesmaid

This afternoon we received word that the FDA has approved Novo Nordisk (NYSE: NVO) GLP-1/Insulin combo. Per a company issued press release;

“Novo Nordisk today announced that the US Food and Drug Administration (FDA) has approved the New Drug Application (NDA) for Xultophy® 100/3.6. Xultophy® 100/3.6 is indicated as an adjunct to diet and exercise to improve glycaemic control in adults with type 2 diabetes mellitus inadequately controlled on basal insulin (less than 50 units daily) or liraglutide (less than or equal to 1.8 mg daily).”

Although we don’t see Xultophy as a major product, its approval before LixiLan from Sanofi (NYSE: SNY) is just another in a series of blows to Sanofi’s struggling diabetes franchise. A franchise which continues its fall from grace and is about to become irrelevant. Lantus, the goose that laid the golden eggs is cooked and thanks to Basaglar from Lilly (NYSE: LLY) will be officially dead.

Even if LixiLan is approved over the next few days which could happen, it won’t matter much. The fact is, yes those pesky facts again, is that Novo knows what they are doing, Sanofi is clueless. The fact is the only way LixiLan wins is by losing, by offering deeper discounts and/or higher rebates. Discounts and rebates which would likely be matched by Novo which means a price game, which means no one wins.

We hate to sound like a broken record but this has nothing to do with patient outcomes or patient convenience, this is all about money. The simple fact is, yes those pesky facts again, is that payors will not pay a premium for patient convivence. Yes, a combination of GLP-1/Insulin works but this can be done with injecting a GLP-1 and then injecting insulin. Sure, injection both at the same time is nice but therapeutically it doesn’t matter much.

This makes one wonder why Novo, who is smarter than the average bear, would venture down this path. Is it really necessary that they have a product in every diabetes injectable category? Or did they do this because Sanofi was doing this? Whatever the reason they will still out execute Sanofi as Sanofi has never shown they can execute. They are great at beheadings which we guess are a form of execution but when it comes to executing a strategy, they couldn’t hit dirt if they feel off a bus in the Iowa countryside. It would also help if they actually had a strategy, but we digress.

Once again Sanofi will be a bridesmaid while Novo walks down the aisle. Once again Sanofi has demonstrated that when it comes to any diabetes product not named Lantus they have a unique ability to turn gold into sand. Once again Sanofi who spent millions so that LixiLan would get an expedited review has proven there is no cure for stupid.

Consistency is something that’s normally rewarded in business unless a company is consistently stupid.