Novo and Sanofi – Same problem different drugs

Novo and Sanofi – Same problem different drugs

Monday Novo Nordisk (NYSE:NVO) announced that  Xultophy®, a combination of Tresiba® long-acting basal insulin and Victoza® a GLP-1, taken once daily will be launched in Switzerland. Yet nowhere in the press release is there any information on when we might see this drug here in the US. Perhaps that’s because Tresiba is currently stalled at the FDA and it’s anyone’s guess on when or even if this drug will ever be approved by the FDA.

This announcement should send a reminder to our friends in France that it might not be so easy to get their combination product Lixilan, a combination of Lantus and Lyxumia, through the FDA. Not when the company withdrew the NDA for Lyxumia.

Interestingly both companies share another problem, patent expirations. As everyone knows Lantus is facing patent expiration later this year and the product which is supposed to replace it Toujeo is still awaiting FDA approval. Although Novo’s patent expirations are spread out over the next few years they too are wondering what will happen to Tresiba which is supposed to replace Levemir which goes off patent in 2019. And let’s not forget that Lilly (NYSE:LLY) already has conditional FDA approval for their insulin glargine and is just waiting for the 30 month stay to be expire before things get really interesting.

Is it necessary to mention that when the time comes both Novolog and Humalog, the two most popular short-acting insulin’s will face generic competition? A fact which makes Sanofi’s decision to raise the price for Apidra even stranger.

Diabetic Investor suspects that all the insulin companies who until recently have been raising prices will get hammered when the Biosimilars arrive. As we noted during JPM everyone and we do mean everyone in the diabetes drug space complained long very loud about the intensifying pricing pressure. Well my friends this is a mere walk in the park on a sunny day compared to what it will be like when Biosimilars hit the market.

Making matters worse for companies like Novo and Sanofi they have nothing in their pipelines ready to step in and lessen what will be a severe blow to their bottom lines. That even if these drugs were ready today and they aren’t, it’s highly unlikely in this environment payors would grant premium reimbursement, this is especially true as neither Tresiba or Toujeo are that better than the drugs they are supposed to replace.

Yet this is just the tip of the iceberg for Novo and Sanofi as both companies are lacking a comprehensive diabetes drug portfolio to match payors increasing fondness for single source contracting.

Now one area where the companies differ dramatically is their respective track records, here the two companies could not be more different. Novo is a global leader in the field while Sanofi is basically a one-hit wonder and everything else they’ve tried in diabetes has failed. Plus Novo has the added benefit of stable management while Sanofi has a soap opera.

In the end Diabetic Investor sees Novo surviving this difficult time although changes must be made. We can’t say the same for Sanofi. Change is coming to this wacky world and soon.