The Insulin Mystery
After reviewing the results from Novo Nordisk (NYSE:NVO) and Sanofi-Aventis (NYSE:SNY) it’s clear that some new trends in the treatment of type 2 diabetes are emerging. First and foremost, the increased use of insulin therapy. In the first quarter of 2008 sales of Lantus jumped nearly 31%, while sales of modern insulin at Novo grew 33%. According to Novo the number of type 2 patients using insulin is outgrowing the number of type 1 patients. During their investor presentation the company noted that in Europe approximately 75% of all insulin is consumed by type 2 patients.
During their presentation Sanofi talked of two studies, TULIP and GINGER, which will be released in June at the upcoming ADA conference. The TULIP study looked at the use of insulin earlier in therapy regimen for type 2 patients, while GINGER compared basal bolus therapy to the use of premixed insulins in type 2 patients. Although we have not yet seen the results of either study it’s clear that Sanofi is determined to convince physicians that insulin therapy should not only be used more with type 2 patients but the therapy should be introduced earlier in the treatment cycle.
Many, including Diabetic Investor, speculated that insulin use in the type 2 patients population would increase after the Avandia controversy came to light. The results from both companies confirm that physicians are increasingly turning to insulin as a replacement for Avandia. The effectiveness of insulin therapy has been well known for years but until the failure of Avandia primary care physicians were reluctant to prescribe insulin therapy. Insulin therapy requires a greater commitment from both the patient and physician. With the concerns over Avandia, physicians began running out of options for their type 2 patients.
It should also be noted that this increased use of insulin in the type 2 patient population coincides with the introduction of new more patient friendly insulin pens. All the major insulin companies Novo, Sanofi and Lilly (NYSE:LLY) have introduced new or improved versions of their insulin pens. Pens that use smaller more patient friendly pen needles.
Finally, it cannot go unnoticed that the increase also coincides with growth in the number of sales reps calling on the primary care physician market. All three insulin companies embarked on an aggressive expansion of their insulin sales teams.
Diabetic Investor expects this trend to continue in the future for a variety of reasons. Although physicians will not abandon oral medications the current crop of medications, most notably Januvia from Merck (NYSE:MRK), just aren’t getting the job done. For some time Diabetic Investor has been reporting the rather lackluster performance of Januvia. The fact of the matter is used as monotherapy Januvia produces only minor reductions in HbA1c.
Secondarily looking towards the future Diabetic Investor sees no oral drug in late stage development that looks all the exciting. In a very strange twist, the two most promising drugs for the type 2 market are both taken via injection; Liraglutide from Novo and Byetta LAR from Amylin (NASDAQ:AMLN). It should also be noted that of all the drugs under development the most exciting are all taken via injection. (This is very good news for companies like Becton Dickenson (NYSE:BDX), the leading maker of syringes and needles.)
It remains to be seen what impact the introduction of Liraglutide and Byetta LAR will have on the insulin market. While Diabetic Investor expects Byetta LAR to be a game changer, it’s also true that physicians once they convinced a patient to use insulin will be reluctant to switch them to LAR. The question is will Byetta LAR’s once-a-week dosing combined with its weight loss capabilities trump daily injections. This question will be complicated by the fact that when first introduced LAR will be delivered using a larger needle and needs to mixed prior to delivery. Diabetic Investor still expects LAR to be a mega-blockbuster, were just not sure what impact it will have on the insulin market.
One market that should be positively impacted by the increased use of insulin is the blood glucose monitoring (BGM) market. Unfortunately there is little concrete evidence that the increased use of insulin is having any impact at all on the BGM market. This seems strange as patients need this information. Unlike Byetta, which is not dose dependent, patients cannot (maybe we should say, should not) simply deliver their insulin without first checking their glucose levels. The primary risk with insulin therapy is hypoglycemia, which can be a serious even life threatening, adverse event.
Diabetic Investor suspects a couple of dynamics are in play here. First, many physicians take a step by step approach when initiating insulin therapy. Typically when a patient is failing oral therapies, the physician will add Lantus to the therapy regimen. As a once daily insulin, Lantus plus orals, has proven to be an effective therapy regimen for type 2’s. While it would be great if patients on this Lantus plus orals regimen checked their glucose levels, many physicians simply tell the patient to inject the same amount of Lantus each day giving the patient little reason to check their levels.
While this can be a dangerous approach when patients move towards using short-acting insulin, which is taken at meals or snacks, it does happen. The same is true when using premixed insulin, which is a combination of short and long acting insulin. To keep things simple and the patient compliant with their therapy many physicians tell patients to inject a specific amount of insulin with each meal. Once again the patient has little reason to test.
Looking ahead it will be interesting to see if the increased use of insulin therapy reinvigorates the BGM market. Given the rather lackluster growth in the market one would think that the BGM companies would be partnering with insulin companies. Johnson and Johnson (NYSE:JNJ) at one time had a relationship with Novo hoping to capitalize on the synergies between insulin use and testing. Although this did not work out, it may well have be a move that was ahead of its time and should be reexamined given the new dynamics of the market.
Diabetic Investor long ago predicted that one day patients would use a diabetes care kit that contained everything they needed to manage their diabetes. Instead of a meter from one company and insulin from another, everything would come in one nice neat package. We still this day coming and the increased use of insulin therapy in the type 2 population might just be the catalyst that makes this happen.
Another market that should benefit from this move towards the increased use of insulin is the insulin pump market. Unlike the BGM market, there is some evidence that insulin pump sales are increasing. Diabetic Investor isn’t convinced this growth in insulin pumps is directly tied to the increased use of insulin and could be more directly linked to the introduction of new products like the OmniPod from Insulet (NASDAQ:PODD). However, going forward pump sales will likely benefit from increased insulin use, given it is the most effective form of insulin therapy.
The difficultly surrounding insulin pumps sales up to this point has never been the effectiveness of pump therapy, rather the work involved mastering pump therapy. This work load should decrease as all the insulin pump companies either have or are working on systems that integrate a continuous glucose monitoring system with their pump. The fact is once comfortable with insulin therapy many patients move towards pump delivery as it improves the quality of their lives. This has also been the strongest hidden benefit with pump therapy, unfortunately it’s a not benefit that can quantified in a clinical trial. Unlike HbA1c, there is no standard to measurement for an improved quality of life.
All in all Diabetic Investor is encouraged by this trend towards greater use of insulin in the type 2 community. Hopefully, this will finally put to rest the long held but foolish belief that patients are afraid of injections. In our eyes, it’s a positive sign when analysts start debating the impact of needle size or mixing on sales rather than whether patients will inject or not. We’ve come a long way.