Novo Continues to roll
This morning Novo Nordisk (NYSE:NVO) announced first quarter 2005 results. According to the company sales of insulin analogues in North America increased by 46%, additionally Novo now holds more than 35% of the total insulin market and over 20% of the analogue market, measured by volume. This type of strong performance in North America is becoming commonplace for Novo. With Lilly (NYSE:LLY) their main competitor struggling, Novo continues to apply full court pressure.
Looking ahead Diabetic Investor sees Novo expanding their presence in North America. A contributing factor will be their recently announced deal with insulin pump maker MiniMed, a unit of Medtronic (NYSE:MDT). Their short-acting insulin analogue NovaLog is fast becoming the insulin of choice for patients on insulin pump therapy. Under the agreement Novo will develop prefilled cartridges to be used with MiniMed’s line of Paradigm insulin pumps. MiniMed is the dominate player in the insulin pump market holding a commanding lead with almost 70% market share. The company also has a huge installed user base of existing pump patients many of whom will be upgrading to the Paradigm platform. Having a prefilled cartridge is another step towards making pump therapy easier for the patient and once developed should help MiniMed expand their lead in the market.
On the R&D front the news isn’t quite as good. After further analysis of the phase 3 safety study for the AERx iDMS project (inhaled insulin) the company determined that the impaired regulation of meal-related plasma glucose was not caused by formation of insulin antibodies. The company said it will decide whether or not to re-initiate the remaining phase 3 clinical studies at the turn of the year. Diabetic Investor suspects the company is waiting to see if Pfizer’s (NYSE:PFE) Exubera is approved before making a final decision on the AERx system.
The company also decided to cease further development of NN2501, an oral glucagons receptor antagonist for patients with type 2 diabetes.
At the moment this leaves Novo’s diabetes pipeline a little thin. While this may be cause for concern in the short term, this is another area were Diabetic Investor believes Novo will become more aggressive. Here too we suspect Novo will look for more strategic partnerships especially in the Type 2 market where the company is particularly weak and will soon be facing competition from Amylin’s (NSADAQ:AMLN) Exenatide which is expected to receive FDA approval latter this week or early next week. Diabetic Investor sees Exenatide as potential blockbuster with little competition for the next year to 18 months.
Novo has made impressive strides in the insulin market but needs to strengthen their Type 2 portfolio. While it’s true that insulin therapy is becoming more popular in the treatment of people with Type 2 diabetes, the preferred method of treatment remains the use of oral medications. Novo has never been particularly strong in this area preferring to stick (no pun intended) with their strength in insulin. However, with diabetes continuing to grow at epidemic rates and Type 2 being the most common form of diabetes Novo is missing a major market opportunity. This is the one area the company needs to address, other than that look for the good times to roll.
David Kliff
Publisher
Diabetic Investor
www.diabeticinvestor.com
www.davesrunfordiabetes.blogspot.com
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