An Interesting Approach

An Interesting Approach

One of the hottest trends outside of the diabetes device world is the quest to develop an ultra-rapid acting insulin. Several companies are working on their particular version of an ultra-rapid acting insulin as one of the issues with the current crop of short-acting insulin’s is they don’t start working fast enough and hang around too long which can lead to hypoglycemia. In a perfect world these new ultra-rapid acting insulin’s would start working faster, hang around long enough to get the job done and then disappear therefore avoiding the possibility of hypoglycemia.

MannKind (NASDAQ:MNKD) and Biodel (NASDAQ:BIOD) are two companies that quickly come to mind when looking in this area and it’s also known that all the major insulin players are also working in this area. One company that has sparked the attention of Diabetic Investor is Halozyme Therapeutics (NASDAQ:HALO) as they too are working in this area. What makes Halozyme different is their rather unique approach to this problem. Rather than build a new insulin as the others are doing, a process that will require a much longer and more expensive regulatory path, Halozyme is trying to get the current crop of short-acting insulin’s to work better using an additive.

The best way to describe the Halozyme approach is to think back to the days when drivers used to add products like STP to improve the performance of their cars. Back in the day drivers would fill their tank and then pour in a product like STP to make their gas perform better. This additive didn’t change the formulation of the gas rather it enhanced its performance.

Late last week the company released some top line data from a study which compared regular short-acting insulin’s to short-acting insulin’s that were enhanced with the company’s additive an enzyme called rHuPH20. According to a press release issued by the company patients using the enhanced version of insulin; “resulted in a greater than 50% increase in the proportion of patients able to consistently achieve AACE (American Association of Clinical Endocrinologists) guidelines for post-prandial glucose targets in both Type 1 and Type 2 patients. Across all of the treatment groups, there was no meaningful difference in hypoglycemia incidence or event rates. Hypoglycemia events were generally mild, and adverse events with PH20 insulin analog formulations were similar to those observed during the insulin analog comparator phase.”

Diabetic Investor became more interested after speaking with the company as their approach is not the only thing that separates the company from the rest of the players here. Halozyme realizes that while their additive can have huge clinical benefits they also understand the business of diabetes and most importantly the insulin market. The company noted that while these Phase 2 studies yielded positive results they will not move onto Phase 3 without first finding a partner.  A wise move considering that whoever partners with the company would have a major strategic advantage over the competition should this make it all the way through the FDA.

As it stands today all three short-acting insulin’s analogues do basically the same thing, the same way. While there are some minor differences between the three, these differences are so small that most patients would not see a noticeable difference in their levels no matter which short-acting insulin they used. This is one reason the short-acting insulin market is becoming a commodity market where price rather than performance determines success.

It’s also true that just as Lantus® is coming off patent soon, so are NovoLog® and HumaLog®.  While the major insulin companies have done their best to try and convince the investment community that the threat of generic insulin isn’t really a threat, the fact is generic insulin will be here sooner than many believe and it will be a major threat.

This fact has not gone unnoticed by the folks at Halozyme who noted that possibility exists that they could partner with a generic company who instead of launching a biosimilar insulin would launch a bio-superior insulin; a situation that would turn the insulin market upside down and should be scaring the daylights out of the major insulin companies.

The Halozyme story becomes more intriguing when you look at the regulatory path for short-acting insulin that’s formulated with the rHuPH20 enzyme. According to the company this reformulated insulin would not require an NDA and would likely follow a 505b2 regulatory path. As we noted when we wrote about Dance Pharmaceuticals last week, the 505b2 regulatory pathway is much cheaper and quicker than a conventional NDA.  Assuming the company is correct, and unlike what Dance is working on Diabetic Investor believes Halozyme actually is correct in their assumption, this makes rHuPH20 even more valuable.

Think of it this way, any company that decides to partner with Halozyme would be in the position to launch their enhanced short-acting insulin about the same time as generic’s hit the market. Rather than being forced to compete on price the company could actually make the claim their enhanced short-acting insulin performs better. A claim which if backed up by data would resonate with patients and their physicians. This won’t stop the coming onslaught of generic insulin’s however; it could blunt their impact and allow a company to maintain superior margins over generics or at minimum maintain valuable market share.

Now the Halozyme story isn’t all kibbles and bits as the company still must find a partner, get the FDA to agree to the 505b2 regulatory pathway and most importantly prove that a short-acting enhanced with the enzyme actually performs better. That being said Diabetic Investor does like their approach as they aren’t trying to reinvent the wheel here rather they are taking a well-established, well-known product and making it work better. Diabetic Investor also likes the fact the company isn’t trying to bite off more than they can chew, they understand that as a small company lacking the resources and scale needed in today’s insulin market that it would be foolhardy to try and go it alone here.

One of the biggest issues with everyone else in this race is their insistence on reinventing the wheel. Not only is this approach more expensive and time consuming, the burden of proof is much higher. Unlike the Halozyme approach, these companies must not only prove their new insulin’s work but have the added burden of convincing the FDA, physicians and patients that these new insulin’s don’t have any unknown issues. In today’s market where new drugs are viewed with increasing skepticism this will not be an easy task. Take a currently available short-acting insulin, which is well-known already, enhanced with the enzyme and this hurdle is much lower.

Diabetic Investor will be keeping an eye on Halozyme and so far we like what we see.