Some last minute deals and preview of things to come.
With the clock ticking towards the end of 2010, Novo Nordisk (NYSE:NVO) and Sanofi-Aventis (NYSE:SNY) are making some last minute deals to complete their holiday shopping. This morning Sanofi announced they bought patents for drug delivery technology for diabetes treatment from the U.S.- and Denmark-based pharmaceutical company Ascendis. According to the Ascendis web site the company’s TransCon technology platform “allows for a drug compound to be released in the body in a precise, time-controlled fashion, creating a long-acting effect for the original unmodified drug.” Diabetic Investor suspects Sanofi will attempt to use this technology to develop an extend-release version of Lantus, the world’s number one selling insulin.
Just as Novo is attempting to develop an extend release insulin with Degludec and Degludec Plus, Sanofi understands that when it comes to insulin the fewer times a patient needs to inject the better. Both Novo and Sanofi are also aware that while Bydureon is not yet on the market, it will soon be here and with its once-weekly dosing poses a serious threat to future insulin sales, in particular with type 2 patients moving towards insulin therapy.
Even better than fewer injections would be to eliminate injections altogether which is what Novo is attempting by signing a deal with Emisphere Technologies (OTC BB: EMIS.OB). Novo hopes to use Emisphere’s technology to develop oral versions of their insulin’s. If successful Novo would have what many believe would be the “Holy Grail” of insulin delivery and vastly expand insulin usage. Just as patients prefer fewer insulin injections think of how they would react to no injections at all.
As excited as this technology sounds Novo is going into this project with their eyes wide open understanding that it could be 10 years or more before an oral version of insulin ever makes it to the market. They also must be cognizant of Emisphere somewhat checkered history which caused many to doubt their technology was for real. Now under new management Emisphere has softened their tone and focused less on making outrageous statements and more on science. There are still significant hurdles to overcome and it remains to be seen if the technology will ever make it however the potential payoff makes this small investment by Novo worthwhile.
These two moves also confirm what Diabetic Investor has been stating in that Novo and Sanofi are on a collision course as they battle to dominate the diabetes market. While the companies are using two completely different strategies to achieve their objective, neither can afford to ignore what the other is doing. One common strategy shared by both companies is both know they cannot win this battle with insulin’s alone. They see GLP-1 therapy gaining momentum and realize that they must have a comprehensive portfolio of products if they are to compete in the future. At the moment Novo has a leg up on Sanofi as Victoza® is already on the market while Sanofi’s GLP-1 is in Phase 3 clinical trials.
What’s critical for both companies is to take advantage of time they have before Bydureon arrives on the scene. Once here Bydureon will mark the beginning of a transformation in how type 2 diabetes is treated. The simple fact is there are not enough patients with type 1 diabetes to support continued growth in insulin usage. Although Diabetic Investor does not anticipate physicians abandoning insulin therapy upon Bydureon’s arrival, there will be a slow and steady erosion of insulin usage among type 2 patients. An erosion which will accelerate when Bydureon comes in an easy to use pen delivery system, once in this patient friendly delivery system the paradigm will shift and forever change the dynamics of the insulin market.
The clock is ticking not just towards the end of 2010, but also towards the seismic shift in the use of insulin with type 2 patients. The question is which company will wear Cinderella’s glass slipper and get the prince. It goes without saying the stakes are enormous and there is little room for error. This is a classic heavyweight battle between two solid fighters, neither of whom is afraid to mix it up while in the ring. Diabetic Investor sees this fight going the distance with the two fighters trading blows until the final bell rings. We’re not sure which fighter will come out victorious but it will be a great fight to watch.
