Smart Move By Novo

Smart Move By Novo

This morning Novo Nordisk (NYSE:NVO) announced topline results from their SCALE™ Obesity and Prediabetes three-year extension trial in adults with obesity or who were overweight with comorbidities, and had prediabetes at baseline. The trial was conducted with Saxenda® which is known as Victoza for diabetes patients. According to a company issued press release;

“Over the course of this 160-week, randomised, blinded phase 3a trial, the time to onset of type 2 diabetes was 2.6 times longer with Saxenda® compared with placebo treatment. In addition, the risk of developing type 2 diabetes was reduced by approximately 80% and statistically significant (p<0.0001) for those being treated with Saxenda®.”

This news could not have come at a better time for Novo given how competitive the insulin market has become combined with the fact that in diabetes there are now three once-weekly GLP-1’s on the market. Although the FDA has yet to approve any drug as a treatment for pre-diabetes this may change in the future. Now that Saxenda has been approved as a treatment for obesity it’s not a stretch to imagine another indication for pre-diabetes.

This expansion of the Victoza franchise is a no lose proposition for Novo. As everyone knows the obesity market like the diabetes market continues to expand while there is acute awareness of pre-diabetes amongst physicians. This repositioning of Victoza is not just smart but also very cost effective as Novo is not reinventing the wheel. The infrastructure to Saxenda was already in place, there is vast pool of patient data from Victoza and physicians do not have to be reeducated on the benefits of GLP-1 therapy. It’s also helps that Novo can use the same sales teams that were selling Victoza to sell Saxenda.

Diabetic Investor suspects it won’t be long before Lilly (NYSE:LLY), AstraZeneca (NYSE:AZN) and GlaxoSmithKline (NYSE:GSK) follow Novo’s lead and seek obesity indications for their respective once-weekly GLP-1’s. Yet given Novo’s jump on these three offerings and the time it will take to reposition these once-weekly products Novo stands a solid chance of establishing a solid presence in the obesity/pre-diabetes market.

The fact is any prescriptions written for Saxenda is gravy for Novo as Victoza in spite of slowing new scripts continues to perform just fine in the diabetes market. As we noted when once-weekly GLP-1’s came onto the market it was likely they would garner most of the new scripts written in the GLP-1 space. We also noted that although once-weekly products are more patient friendly physicians would be loath to switch patients who were effectively using Victoza which is taken once-daily. As it turns out this is exactly what’s been happening in the marketplace.

Novo might also benefit from the recent FDA warning on SGLT2’s as physicians may now look at Victoza as a replacement.

Novo should be commended for looking ahead and properly seeing where the diabetes market, the GLP-1 market in particular, was going. They knew they had nothing to lose by repositioning Victoza and had plenty to gain. With the infrastructure already in place they also knew that any success with Saxenda would have a nice positive impact on their bottom line. So kudos to Novo as sometimes a company doesn’t have to be overly innovative to succeed they just have to be smart.