Another Victoza® delay

Another Victoza® delay

This morning
Novo Nordisk (NYSE:NVO) announced that the formal feedback for Victoza® from
the FDA has been pushed back again, this time to the fourth quarter of 2009.
Not surprisingly shares of Novo are down on the news as investors are beginning
to wonder if Victoza®, which has been approved in Europe, will ever see the
light of day here in the United States.

This news
also reinforces a belief by Diabetic Investor that the company will face a
serious decision when, or should we say if, Victoza receives FDA approval. As
everyone knows the long-acting once-a-week version of Byetta from Amylin
(NASDAQ:LLY) and Lilly (NYSE:LLY) is also awaiting FDA approval. It is also
well known that Victoza® being a once daily injection would face a major
marketing hurdle versus Byetta LAR which is a once-weekly injection. Should the
two drugs come to market within months of each other, something that is
becoming a stronger possibility with each bit of news that comes out, Victoza®
would find a difficult time gaining traction in the marketplace.

could be dealt a more serious blow should the drug be approved after LAR or
even worse not receive full FDA approval. Looking at the range of options there
are few, if any, positive choices here. Any further delay, such as, the FDA
requiring additional data or more studies, would put the company in the
uncomfortable position of deciding whether or not to continue pursuing Victoza®
in the US. This is not unlike the situation Novartis (NYSE:NVS) found themselves
in with Galvus®, their DPP-4 which was supposed to compete with Merck’s
(NYSE:MRK) Januvia®.

Facing delay
after delay at the FDA, Novartis basically threw in the towel and had to be
content to market the drug in Europe. The company understood, even with an
approval, Januvia had already itself as the DPP-4 choice and it would be next
to impossible to stop Januvia’s momentum. Novo’s situation is actually worse
than Novartis as LAR offers the benefit of once-weekly delivery, a major advantage
over once-daily. Novartis could have toughed it out and brought Galvus to market
here and then used price to combat Januvia’s strong presence in the market.
This is exactly the strategy being pursued by Bristol Myers (NYSE:BMY) and
AstraZeneca (NYSE:AZN) with their recently approved DPP-4 Onglyza™. While
company officials would never admit it publicly, they know Onglyza and Januvia
are basically the same drug so they resorted to the oldest marketing tactic in
the book to gain share; sell what you have at a lower cost than the

Novo could follow
this dangerous path however Diabetic Investor isn’t certain that a lower price
would help. When the available data for both drugs are placed side by side LAR
comes out ahead in two key areas. While both Victoza and LAR do a great job of
lowering A1C, patients on LAR see greater weight lose and only need to inject
once-a-week. Just ask any physicians who treats type 2 patients and they will
tell you that therapy compliance is one of the greatest obstacles to improving
patient outcomes. This is why these same physicians are anxiously awaiting LAR’s
approval. Like Diabetic Investor, they understand less frequent administration
trumps more frequent administration; and yes it is that simple.

This news is
a double edge sword for the folks at Amylin and Lilly, as it puts even more
pressure on the companies. Amylin, who just barely survived a proxy fight from
corporate raider Carl Icahn, is under tremendous pressure to execute with LAR.
The company can ill-afford another misstep as they did when Byetta first came
to market. While Amylin and Lilly appear to be on the same page, it is well
known this partnership has had its rocky moments. With Lilly stating that
diabetes will play a major part in their future, there is an equal amount of
pressure here too. Lilly is still smarting from Novo kicking their backsides in
Lilly’s core insulin business. The company would like nothing better than to
return the favor with LAR.

The way
things stand today, Amylin and Lilly have the upper hand and with a little help
from the FDA they could deliver a knockout blow. While GlaxoSmithKline
(NYSE:GSK) and Roche are both working on long-acting GLP-1’s to compete with
LAR, these products are still years away from being submitted to the FDA, let
alone getting on the market. Should Victoza continue its backward path and LAR
continue its forward path, Amylin and Lilly could virtually own the GLP-1
market, just as Merck virtually owns the DPP-4 market.

Things are
getting very interesting.