Novo Reports

Novo Reports

Satchel Paige once said “Don’t look back. Something might be gaining on you.” Given the competitive threats surrounding Novo Nordisk (NYSE:NVO) it seems as though Novo is following Satchel’s advice. Rather than worry about possible generic entries into the insulin market, pricing pressure due to healthcare reform or Bydureon cutting into Victoza® sales, the company is doing what they do best; forging ahead with a solid pipeline of innovative products and delivery systems.

It also appears that Novo has a newfound sense of urgency as they seem to see the competitive threats that surround them. While no one would ever call Novo speedy, they are no longer moving at glacial speed either. Looking over their vast pipeline Novo has also found religion learning from their recent Victoza® launch, in that, even with insulin products less frequent administration is where this market is going. Additionally they have jumped fully onto the GLP-1 bandwagon combining their GLP-1 with an insulin analogue targeting the growing Type 2 patient population who seeks greater glycemic control with the added benefit of weight neutrality.

Looking at their current portfolio everyone was anxious to see just who well Victoza® is doing. As Diabetic Investor has previously reported initial field reports indicated that Victoza® was exceeding expectations, although it should be noted these were not overly high expectations. As we suspected and confirmed at last week’s AACE meeting, endocrinologists are not overly concerned with the black box warning and are (excuse the pun) giving Victoza® a shot. On the flip side, primary care providers are taking a more cautious approach concerned with legal implications of prescribing a new drug that carries a black box warning.

That being said these reports while early offer a possible glimpse of what lies ahead for Victoza®. Looking at the German market in particular it appears that Victoza® sales have already begun to level off and sales in the UK are off to slow start. While the company did not provide any data on the US market Diabetic Investor suspects it won’t be that much different than what we have seen in the UK. Basically what’s happening here in the US is endo’s are doing what they always do when a new drug hits the market, namely they will try it out on a select group of patients to see who things go. Or put another way, they are conducting their own personal trial using some of their own patients as test subjects.

Diabetic Investor suspects the same process will be followed when Bydureon receives approval. While Bydureon trumps Victoza® with once-weekly administration, the pre-pen version of Bydureon will be less patient friendly than the once-daily pen delivered Victoza®.  After the endo’s have finished their trials a decision will be made for which drug becomes more widely adopted. The risk facing Bydureon and the hope for Victoza® is patients will be turned off by the fact the initial version of Bydureon carry’s a larger needle size and requires mixing prior to administration. While Diabetic Investor and many endo’s believe these disadvantages will be more than offset by once-weekly dosing compared to once-daily, the honest truth is no one knows for sure who patients will react in a real world setting.

One thing that is becoming increasingly clear that once in an easy to use patient friendly pen delivery system which requires no mixing and comes with a smaller needle size, Bydureon wins going away. The real and unanswered question is, how many patients, who start on Victoza®, will (again excuse the pun) stick with the drug once the Bydureon pen arrives.

Looking at the insulin side of the equation Diabetic Investor is anxious to see the clinical data for Degludec and DegludecPlus the company’s new long acting insulin’s now in phase three trials. Equally intriguing is NN9068 which combines a GLP-1 with basal insulin. We should see data from all three compounds at the upcoming ADA conference in late June.

While Novo’s competition, most notably Sanofi-Aventis (NYSE:SNY) who reports earnings Thursday morning, are aggressively entering the diabetes device market, Novo is doing what they do best; developing solid products for the diabetes market. It’s well known that Sanofi is gunning for Novo using an all out assault to capture the insulin using patient. At the core of the Sanofi strategy is building a diabetes management system that includes all the tools and drugs this patients needs to manage their diabetes. Novo meanwhile remains firm in their belief that devices, glucose monitoring in particular, will only divert the company from their core competencies.

At this point it’s too early to tell who will win this fight and quite frankly both companies could come out just fine in the long run. The real losers here just might be the already embattled glucose monitoring companies. Given that Sanofi’s objective is to sell more insulin it’s possible they could devastate the BGM market accepting lower margins on test strips, understanding that insulin sales are what matters. With BGM companies already facing intense pricing pressure they need this like the Titanic needs another iceberg.

As we indicated in our AACE wrap up, the diabetes arena is about to go through another round of change. The battle lines are being drawn and the players are beginning to stake out their respective territories. As E. J. Hobsbawm once wrote; “The only thing certain about the future is that it will surprise even those who have seen furthest into it.” Things in the diabetes space are once again becoming very interesting, thank goodness.