Novo Reports – Less is better
If there was a theme for today’s earnings call conducted by Novo Nordisk (NYSE:NVO) it would have been, less is better or more specifically patients prefer therapy options that are administered less frequently. This trend which started with Lantus has now expanded into the growing GLP-1 market and could continue its expansion into the type 2 insulin using market.
Looking at the results for Victoza, Novo’s once daily GLP-1 it’s becoming obvious that the GLP-1 is expanding. Although Victoza does not have the best managed care coverage the drug has performed above expectations and now has another 18 months to develop its market share thanks to the FDA’s strange decision regarding Bydureon, the once weekly GLP-1 from Amylin (NASDAQ:AMLN), Alkermes (NASDAQ:ALKS) and Lilly (NYSE:LLY). Just as Diabetic Investor predicted, physicians and their patients would embrace effective therapy options which are delivered simply and less frequently. This has given Victoza an edge over Byetta which is delivered twice daily and will give Bydureon an edge over Victoza.
Novo is also embracing this trend with the development of Degludec and DegludecPlus, long acting insulin’s which can be dosed less frequently. Although the data released data on both drugs was not overwhelming Diabetic Investor does not believe either drug has to be superior to current insulin’s. Looking ahead the future for treating type 2 patients will shift from therapy options which are dosed multiple times per day to options which are dosed less frequently. Given the heightened concern over therapy non-compliance and the epidemic growth rate of diabetes, particularly type 2 diabetes, the bottom line is simple, less is better than more.
Novo also has another strategic advantage which should help them capitalize on this trend as it is well known that Novo’s delivery systems are some of the best in the business and most patient friendly. In the future the best of all possible worlds is an effective therapy option, delivered less frequently in a patient friendly delivery device. This is another reason why GLP-1 therapy looks promising as unlike insulin GLP-1’s are fixed dosed products, whereas insulin is a variable dosed product. Put more simply, with GLP-1 therapy the patient has no thinking involved, they simply dial out their dose and inject. No need to monitor glucose levels, no carb calculations, no worries about duration of action, etc.
With Sanofi-Aventis (NYSE:SNY) making a major move onto Novo’s turf, the development of Degludec and DegludecPlus will be critical for the company’s continued success. While the company caught a lucky break with the Bydureon delay they must take advantage of this delay and effectively build Victoza’s market share. The reality of the situation is Novo cannot rest easy if they wish to remain a dominate player in diabetes. They would also be well to remember the old saying of what comes around goes around, while they dodged a bullet with the Bydureon delay, the competition has painted a large target on the company and is gunning for them.
