Sailing into treacherous waters

As expected the FDA approved Rybselsus Novo Nordisk once daily orally delivered GLP-1 and as expected the drug carries a list price on par with Ozempic, which of course is meaningless as the company will not release the level of discounts they will offer or how much they are rebating. The company also noted they have no plans to add additional reps meaning that the same reps who sell Ozempic will likely sell Rybselsus. We also find this meaningless as formulary coverage and positioning will determine the future of Rybselsus not how many reps carry it in their bag.

Judging by the press/analyst coverage since the approval and the muted reaction of Novo’s stock price since the approval a debate is brewing as to whether Rybselsus will be the blockbuster Novo desperately needs or whether it will just cannibalize Novo’s other GLP-1 offerings Victoza and Ozempic. To achieve blockbuster status the drug will have to take share away from Trulicity or at least have physicians put none GLP-1 patients on Rybselsus before Trulicity.

Rybselsus has several things going for it as being the first orally delivered GLP-1 there is a high level of physician awareness. What these physicians don’t know is the drugs rather complex dosing regimen something that will hit them like a ton of bricks. Novo reps will minimize the dosing regimen, Lilly reps will compare to the simplicity of once-weekly injections, which is ironic given that Ozempic is also a once weekly injection. Depending on how Novo structures rep comp will go a long way towards determining how aggressively the Novo reps push Rybselsus.

Don’t expect this to be a fair fight with Novo and Lilly playing nicely in the GLP-1 sandbox. Lilly will do whatever they can to prevent Rybselsus from impacting Trulicity sales.

Frankly we aren’t sure who will win but our gut and knowledge of Type 2 patients tells us that Novo will have a rough road when after the initial excitement wears off and it’s time for prescription refills. Like every new drug physicians will test it out on a select group of patients who will report back letting the physician know how its going. This feedback will largely determine the difference between Rybselsus being a blockbuster or just another drug in the medicine cabinet.

Keep in mind being the first orally delivered GLP-1 does have its disadvantages this is not like Ozempic coming to market. Thanks to Trulicity physicians and patients were already familiar with once-weekly injections. The battle came down to what it always comes down to, money which drug had better formulary position and ultimately was cheaper for the patient. Being the first orally delivered GLP-1 there is nothing to compare Rybselsus to, there is no comfort level., no patient experience.

Novo for their part is caught between the preverbal rock and hard place. Do they aggressively discount/rebate Rybselsus and risk cannibalizing Ozempic/Victoza sales or do they protect Ozempic/Victoza? They need Rybselsus to be a major hit, but they cannot afford this hit to come to the expense of Ozempic/Victoza sales. By comparison Ozempic was a much easier launch as it was simple battle with Trulicity, the Rybselsus launch is far more complex.

The harsh reality here is that Novo is sailing in uncharted very treacherous waters.