Sanofi-Aventis (NYSE:SNY) has already publicly stated they are gunning for Novo Nordisk (NYSE:NVO) and looking to become the worldwide leaders in diabetes. Listening to this morning’s earnings call we were given a glimpse of the similarities and differences between these two companies and how Sanofi plans to overtake Novo. Like Novo, Sanofi is aggressively moving into the GLP-1 arena with their once-daily GLP-1 lixisenatide which is currently in Phase 3 and also like Novo Sanofi is combining their GLP-1 with the Lantus which will move into Phase 3 in the fourth quarter of the year.
Where these two companies part company is on the device side. As Diabetic Investor noted with our AACE wrap up, Novo has no plans to enter the glucose monitoring space while Sanofi is moving full steam ahead here. According to the company we should see the first product from their recently announced partnership with AgaMatrix before the end of 2010 and as Diabetic Investor has been predicting this is just the beginning for Sanofi. The long term goal of this relationship is “to deliver integrated solutions to patients”.
In the future look for Sanofi to offer a glucose monitor that contains a bolus calculator along with a monitor that communicates with an insulin pen. The goal of both devices is to help insulin using patients properly dose their insulin and take some of the guess work out of dosing decision. It’s often misunderstood that insulin using patients simply monitor their glucose level and then use that number alone to determine how much insulin to dose. Dosing decisions are actually much more complex as the patient must also take into account not just what their current glucose is but factor other factors such as carb intake, duration of insulin action, insulin to carb ratio’s and insulin onboard.
The beauty of a bolus calculator is that it’s like a mini-computer for the insulin using patient who programs the computer with their personal information and then the computer using this information recommends a dose of insulin. While bolus calculators are standard for insulin pumps, they have yet to be adopted for insulin pen or syringe patients. This is one reason many physicians try and simplify the insulin dosing process by telling patients to inject X units of insulin with each meal. These physicians understand that the majority of insulin using patients are not comfortable with these calculations and like to keep things simple. This is also another reason why physicians are reluctant to recommend insulin therapy. They understand that insulin while very effective therapy can also be a very dangerous drug when not properly dosed.
Having a bolus calculator on glucose monitor makes the whole insulin therapy process more patient friendly, once the patient understands how to program the unit. Frankly having a bolus calculator as part of a glucose monitor is long overdue and the success of this type of product really has more to do with who owns the intellectual property rather than whether there is a need for such a device. As Diabetic Investor has noted before when it comes to IP and patent infringement claims in diabetes devices this is a contact sport.
The real goal here is simple as well, Sanofi understands the more patient friendly insulin therapy becomes the more insulin they will sell and that’s the bottom line for Sanofi, selling more insulin. They correctly understand that while insulin pump therapy is very effective not every insulin patient wants to be attached to a machine yet they need the same tools available to an insulin pump patient. It’s just a matter of time before they take the next step with this approach and add in connectivity to this system. Diabetic Investor can see the day coming when this insulin delivery systems not only provides the patient with more information but also sends this information to the physician or diabetes educator.
While selling more insulin is Sanofi’s primary goal they are smart enough to read the handwriting on the wall which is why they are also in the GLP-1 space. The key question here is whether a once-daily GLP-1 stands a chance once Bydureon, a once-weekly drug, gets to the market. Besides battling Bydureon the company will come up against Victoza® from Novo which is already on the market. Given Novo’s expertise in developing simple and very patient friendly delivery devices it’s difficult to see lixisenatide out selling Victoza® without a vastly superior profile.
The advantage Sanofi may have here is with the physician. As Diabetic Investor has stated previously Sanofi is proceeding down a path where they can offer physicians a complete diabetes management system. A system that includes everything the patient needs to manage their diabetes; a system that will likely add in connectivity making it easier for the physician to manage their diabetes patients. While all the insulin companies would argue this point when it comes to short-acting insulin they are all basically the same. The key therefore is to provide the physician with better tools to manage their insulin using patients giving them a reason to prescribe Sanofi’s product offerings.
The same fundamentals will hold true for the GLP-1 market as well. With the exception of Bydureon and its once-weekly administration advantage, the remaining GLP-1’s have very similar characteristics. Although Sanofi has yet to release detailed data on lixisenatide, something we’ll likely see in third quarter, Diabetic Investor anticipates the drug to perform like other GLP-1’s delivering solid glucose control, promoting weight loss and simple dosing. Like other GLP-1’s will also likely to see nausea as the primary adverse events along with questions about c-cell formation and pancreatitis. Here as well Sanofi is designing tools that will make it easier for both the patient and physician to manage diabetes.
Many, including Diabetic Investor, have wondered given their zest for overtaking Novo will Sanofi acquire an insulin pump company. Based on all available evidence and public statements Diabetic Investor believes it’s not a question if they will do this but when and who they will do this with. An insulin pump fits nicely into their systems based approach and fits their number one goal of selling more insulin. The real question here is will they acquire someone like Insulet (NASDAQ:PODD) or make a bigger splash and acquire Medtronic’s (NYSE:MDT) insulin pump and continuous glucose monitoring unit. There is a slight possibility the company could follow the path they did with AgaMatrix and partner with one of the many insulin pump start-ups and use this as their platform. Given the high costs of starting from ground zero strategically it seems more likely they would pursue a more established player.
Finally it should be noted that it was actually quite refreshing to listen to a conference call from a company that has done their homework in the diabetes space and actually understands how this market is transforming. As we reported on Tuesday Novo is not sitting around waiting for Sanofi to make their moves and has a solid portfolio and years of diabetes experience. Given their size and resources it’s easy to understand why Sanofi is moving towards not just therapy solutions but device integration. They can see that the BGM market is falling apart and they control the most important patient in this market, the insulin using patient. They also see the emerging market of devices where connectivity will play a major role in the future. As we stated when they partnered with AgaMatrix, this is just the first of many deals to come. Things are about to get very interesting.