Riding in circles

Riding in circles

Although it was not exactly earth shattering news in the diabetes world, this past Monday Novo Nordisk (NYSE:NVO) announced the formation of the first all diabetes professional cycling team. According to a press release from the company; “Novo Nordisk today announced a unique partnership to form Team Novo Nordisk, a global sports team with more than 100 cyclists, triathletes and runners who all have diabetes, spearheaded by the world’s first all-diabetes pro-cycling team.” Spearheading Team Novo will be Phil Sutherland, the creator/founder of Team Type 1, an organization which has done outstanding work empowering patients across the globe.

The irony here is that the primary sponsor for Team Type 1 prior to this announcement was Novo’s arch rival, Sanofi (NYSE:SNY). A rival who based on recent events appears to be riding in circles and going nowhere in a hurry. Try as they might the company can’t seem to find a strategy that will help replace the revenue that will be lost when their blockbuster diabetes product, Lantus, goes off patent.  Now before everyone starts screaming about how a generic Lantus won’t be available the day after the Lantus patent expires or won’t be 80% cheaper than Lantus, get a grip. A generic Lantus is coming and it will be cheaper than Lantus, plus it will put payors in the driver’s seat when they negotiate with Sanofi.

Looking beyond the Lantus patent cliff isn’t very pretty as the company really has nothing of substance in their diabetes pipeline and their other diabetes initiatives have failed to yield anything of value.  As we noted when this journey began Sanofi was embarking on what seemed like a wise strategy, become the first company to offer a complete diabetes management system. A system that would not just include the drugs used to treat diabetes but extended to the devices used to monitor the disease plus throw in disease management as well. The theory was that having such a comprehensive system would more closely bind the patient and physician to Sanofi products. This effort was not just ambitious, as it was never really tried before, but tricky as the company had no real experience or success outside of Lantus.

Well here are with the Lantus about to fall over the cliff and the company is no closer than they were when this strategy was put in place. Apidra®, the company’s short-acting insulin which was supposed to capitalize on Lantus, is not even within shouting distance of its competitors, which were on the market well before Apidra. While company officials would beg to differ, Apidra was really no different than what was already on the market and offered no compelling reason for a patient and/or physician to use it, a distributing trend which seems to being repeated with the companies once-daily GLP-1 which is nothing more than a Victoza® copycat.

The iBGStar, the company’s attempt at entering the ultra-competitive glucose monitoring market, was dealt a fatal blow when Apple changed the connector port on their just released and widely popular iPhone 5. The iBGStar, while way cool, was a long shot to make it even without this change by Apple; something the company likely knew as they were in hot pursuit of buying Bayer’s diabetes device unit. Yet for reasons unknown the company walked away from the Bayer acquisition and now is left without direction in what has become a commodity market they should have never entered in the first place.

As noted earlier the pipeline isn’t all that spectacular as it is filled basically with me-too, copycat products that even if they make it will be second or third in the category. Lyxumia®, their once-daily GLP-1, is not only late to market but having issues finding enough participants for the ongoing cardiovascular studies.  The fact is even without this latest hiccup, the drug was unlikely to find much attention as Victoza is already well-established in the market and Bydureon™, now owned by Bristol Myers (NYSE:BMY) who’s partnered with AstraZeneca (NYSE:AZN), offers a more compelling case with its very patient friendly once-weekly dosing schedule.

So just as the elected officials in Washington bicker over how to avoid the coming fiscal cliff, Sanofi is struggling to avoid the fast approaching Lantus patent cliff.  In a sign of just how bad things have gotten at the company Diabetic Investor suspects the politicians will find a solution to the fiscal cliff well before Sanofi finds one for the Lantus patent cliff. And surprise, surprise the company is once again reorganizing their diabetes unit and rumors are rampant that layoffs will soon be announced – imagine that.

Alas the company has not given up on their quest to look for new revenue sources and the latest is a doozy. Check out the latest bright idea at https://www.readionthego.com/order/home.action and no this is not a joke and yes the company is actually selling lunch bags. Now Diabetic Investor must admit that we are not experts in the lunch bag market and perhaps the company is truly onto something here.  One thing we do know is they won’t have to worry about Novo Nordisk a company that is eating their lunch in the global diabetes market. The harsh reality here is that without Lantus, Sanofi and diabetes are like peanut butter without jelly, and that’s not much of a lunch. But what the heck they will sure have some nice bags to give away when it’s all over and that’s something.