And the winner will be……

And the winner will be……

According to a report issued by AdverseEvents, Bydureon the once-weekly GLP-1 now owned by AstraZeneca (NYSE:AZN) is one of the safer drugs to come on the market. AdverseEvents contends that of the three drugs evaluated in the GLP-1 receptor agonist class–Bydureon and Byetta from AstraZeneca and Victoza from Novo Nordisk (NYSE:NVO)–Bydureon appeared to be the safest. The report also notes that both GLP-1 receptor agonists and DPP-4 inhibitors (especially sitagliptin) have elevated associations with pancreatitis and pancreatic cancer, but neither class appears to have strong links to presumed renal and hepatic complications.

It is also well know that there have been conflicting studies and widely varying opinions over the pancreatitis and pancreatic cancer issue. So much so that a report from the FDA and the European Medicines Agency in February said that suggestions that the drugs could cause pancreatic disease are “inconsistent with current data.” Quite frankly Diabetic Investor doesn’t believe we’ll ever have a clear consensus over the pancreatic issue, this is going to be one of those areas where people will agree to disagree.

Watching all this very closely is GlaxoSmithKline (NYSE:GSK) who earlier this week announced that the FDA has approved their once-weekly GLP-1 Tanzeum™. Lilly (NYSE:LLY) also has a once-weekly GLP-1 dulaglutide in late stage development, which based on recent study data appears to be as effective as the current crop of approved GLP-1’s.

Perhaps the more important question is which of these drugs will emerge as the winner in the growing GLP-1 space, a space which is becoming very crowded. Or perhaps we should be asking why Astra isn’t moving more aggressively with Bydureon; a move which seems wise now that it’s not the only FDA approved once-weekly GLP-1. In the past Diabetic Investor has speculated that Bydureon sales which have disappointed since the product was launched have been hurt even more by the musical chairs being played over who owned the damn drug. Amylin, who developed Bydureon was acquired by Bristol Myers Squibb (NYSE:BMS) in partnership with Astra, only after Amylin went through a very nasty divorce from Lilly who was their original partner yet never seemed all that enamored with Bydureon, so much so they now have their own once-weekly GLP-1. Crazy we know but actually quite common in the wacky world of diabetes.

There is no question that Novo has been the primary beneficiary of all this wackiness as Victoza their once-daily GLP-1 has exceeded expectations and continues to perform quite nicely. While Amylin, Lilly, Bristol and Astra were running around like chickens with their heads cut off, Novo went about their business building Victoza sales. While Bydureon and now Tanzeum may be more convenient in terms of dosing, weekly over daily, all things being equal physicians are loath to change a patient’s therapy option if its working and the fact is Victoza works. The longer Astra fumbles about deciding what to do with Bydureon, the more scripts are written for Victoza.

Diabetic Investor can’t wait for Lilly’s once-weekly GLP-1 to get here not because we see it as better rather how Lilly plans to build sales for the drug. As we have noted in the past Lilly after years of languishing in diabetes now has the deepest pipeline of diabetes drugs and seems intent on being very aggressive getting this strong portfolio on every formulary.

It’s becoming more obvious each day that the diabetes drug space is moving closer and closer to transforming into a commodity style market where price trumps performance. The fact is if someone takes all the data that has been gathered on all the GLP-1’s, those on the market and those under development, blind the data there really isn’t that much difference between the drugs. This unfortunately for the companies who own these drugs sets up the perfect storm for what will likely be a nasty and costly price war. This is exactly what happened in glucose monitoring space and the short-acting insulin space.

About the only company who seems to acknowledge the changing dynamics of the diabetes drug space is Lilly. They see the market transforming and are taking the necessary steps that give them the most realistic chance at success. As we have noted previously this untested never tried before strategy may not work as Novo, Astra and Glaxo won’t sit ideally by and let Lilly win without a fierce fight. This fact will push the market even further towards commodization as just like in BGM the pricing power does not rest with the drug companies but in the hands of payors. Just like BGM, payors will likely demand and receive price concessions and/or higher rebates from drug companies looking to gain preferred formulary placement.

Perhaps this is the reason Sanofi (NYSE:SNY) decided to abandon their once-daily GLP-1 as a stand-alone product. They see a very crowded market, a market where they would have been a very late entrant with a product that really is nothing special. About the only weapon they could have used to build share would have been price and given the issues they are facing with upcoming patent expiration of Lantus, this is the last thing they needed.

Given that the Kentucky Derby is just two weeks away Diabetic Investor would put Lilly as the betting line favorite to win the GLP-1 race, even though their product hasn’t reached the market yet. Novo is strongest contender to give Lilly a serious run for the title. One might have thought that Astra has the best horse with Bydureon but as any good handicapper knows it takes more than a good horse to win the run for the roses, it also takes an experienced jockey riding that horse. The simple fact is Bydureon has had too many jockeys and we’re not sure that even now that it appears to have settled on just one they can get the job done.