Let the games begin

Let the games begin

This morning Lilly (NYSE:LLY) announced their generic version of Lantus® has received marketing authorization in Europe. According to a company issued press release; “The European Commission (EC) granted marketing authorisation for Eli Lilly and Company and Boehringer Ingelheim’s insulin glargine product, indicated to treat diabetes in adults, adolescents and children aged 2 years and above. Lilly/Boehringer Ingelheim’s insulin glargine product is the first insulin treatment approved through the European Medicines Agency’s biosimilar pathway and the fourth diabetes product approved in the EU from the Lilly-Boehringer Ingelheim Alliance.”

Later in the release came one of the more interesting and perhaps more telling comments;

“The Alliance’s insulin glargine product is a basal insulin with the same amino acid sequence as Lantus® (insulin glargine) and is intended to provide long-lasting blood sugar control between meals and at night.”

That statement basically says to everyone “Hey our basal insulin is the same as Lantus and guess what it’s cheaper too.” Not exactly what our wine drinking friends at Sanofi (NYSE:SNY) want to hear these days. Even worse when one considers that Lilly also has their own branded long acting insulin under development which appears not just to be better  than Lantus but also better than Sanofi’s Lantus replacement, Toujeo.

Diabetic Investor suspects that when the legal battle between Sanofi and Lilly is over, the FDA will join their European counterparts also approving the drug. That’s when the real fun begins.

Honestly Diabetic Investor can’t believe we’re writing this sentence but Lilly is not just regaining their leadership position in diabetes but they are putting every other diabetes drug company on notice. They are basically daring everyone else to play on their turf. They forcing companies like Sanofi and Novo Nordisk (NYSE:NVO) to make some very tough choices. They are also extending the advantage they have over AstraZeneca (NYSE:AZN) who lacks insulin in their diabetes treatment portfolio.

As we noted just yesterday this is the reason tomorrow’s FDA panel meeting for Novo takes on even greater importance. Among the weapons in Lilly’s diabetes arsenal is a long-acting once-weekly GLP-1 which is currently awaiting FDA approval. Although this will be the third once-weekly GLP-1 to receive FDA approval, it’s almost 100% certain that Lilly will be ultra-aggressive when it comes to pricing. Should the FDA approve Victoza as treatment for obesity they would avoid somewhat the coming price war in the diabetes GLP-1 sector.

Come to think it Lilly isn’t just daring the competition to play on their turf, their double daring them. Let the games begin.