This is getting very interesting

This is getting very interesting

This morning Lilly (NYSE:LLY) released a more detailed analysis of the landmark EMPA-REG OUTCOME® trial.  According to a company issued press release;

“New sub-analysis data presented today showed the reduction in risk for hospitalization for heart failure or cardiovascular death with Jardiance® (empagliflozin) compared with placebo when added to standard of care in patients with type 2 diabetes (T2D) at high risk of cardiovascular (CV) events was consistent across all sub-groups analyzed, including those who had heart failure at baseline and those who did not. These results were presented on behalf of Boehringer Ingelheim Pharmaceuticals, Inc. (BIPI) and Eli Lilly and Company (NYSE: LLY) at the 2015 Scientific Sessions of the American Heart Association in Orlando, Fla. “

The release also states;

“New data also presented today demonstrate JARDIANCE reduced the risk of the composite endpoint of rates of hospitalization for heart failure or death from heart failure by 39 percent compared with placebo when added to standard of care in patients with T2D at high risk of CV events.”

As we have noted previously while most experts believe that the cardiovascular benefits seen with Jardiance will be seen with other SGLT2’s, Lilly has something Johnson and Johnson (NYSE:JNJ) and AstraZeneca (NYSE:AZN) does not, real hard data. Yes data is coming for Invokana and Fraxiga but until it gets here no one knows for sure that they too will produce cardiovascular benefits. Lilly to their credit isn’t wasting the advantage they have and will press this advantage every chance they get.

Again as we have noted before JNJ and AstraZeneca are doing their best to convince everyone that this is a class effect, yet without data to prove this they are playing defense. Simply put without data they must fight for share with one head tied behind their back. To be even more blunt, Lilly has basically forced JNJ and AstraZeneca to use price as their primary weapon to maintain share in the growing SGLT2 market.

At this same meeting the news was not so good for Novo Nordisk (NYSE:NVO) when they presented data last night for their once-daily GLP-1 Victoza. Data which found Victoza failed to improve clinical stability or delay death in patients suffering from advanced heart failure. According to Dr. Adrian Hernandez, professor of medicine at Duke Clinical Research Institute and one of the study’s lead researchers “We’re disappointed this didn’t work out, but it’s important to understand heart failure and diabetes together as common problems.”  Many had hoped that Victoza would have CV benefits similar to Jardiance as the drug is effective at lowering glucose with the added benefit of weight loss.

Diabetic Investor does not believe these results will adversely impact sales of Victoza as the drug continues to do quite well in the marketplace. Frankly Novo should be more concerned with the three once-weekly GLP-1’s now on the market as they are more likely to adversely impact future Victoza sales. As we have noted in the past we don’t see physicians switching Victoza patients to one of the newer once-weekly offerings rather the impact will be seen with new patient starts.

Joining the quest to enter the obesity drug market we also learned today that JNJ has signed a deal with Hanmi Pharmaceutical’s, yes the same company that just signed a deal with Sanofi (NYSE:SNY).  According to a company issued press release;

“Janssen Pharmaceuticals, Inc. (Janssen) announced today that it has obtained worldwide rights, excluding China and Korea, to develop and commercialize oxyntomodulin-based therapies including HM12525A, a biologic that is completing Phase 1 and expected to enter Phase 2 studies next year, from Hanmi Pharmaceutical Co., Ltd. The agreement is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

HM12525A is an oxyntomodulin-based therapy (GLP-1/glucagon receptor dual agonist) that has shown evidence of improving multiple metabolic parameters that lead to improved blood glucose, body weight, and insulin sensitivity. This asset has the potential, as a once weekly therapy, to be a best-in-class oxyntomodulin-based therapy.”

Just as refresher Hamni licensed rights to its experimental GLP-1-RA agonist efpeglenatide to Sanofi as part of a deal potentially worth up to 3.9 billion euros ($4.2 billion). The agreement also includes a weekly insulin and a fixed-dosed weekly GLP-1-RA/insulin drug combination. Additionally Sanofi and Lexicon Pharmaceuticals, Inc. (NASDAQ: LXRX have entered into a collaboration and license agreement for the development and commercialization of sotagliflozin, an investigational new oral dual inhibitor of sodium-glucose cotransporters 1 and 2 (SGLT-1 and SGLT-2).

Looked at collectively the study data combined with this zest for deals points to just one thing, competition in the diabetes drug space already fierce continues to intensify. For drugs already on the market the battleground has shifted somewhat as it is no longer good enough for a drug to just lower glucose. That in addition to lowering glucose drugs must at a minimum prove they have no adverse cardiovascular impact and as we have seen in the SGLT2 category cardiovascular benefits.  Not to be redundant but as we noted last week it won’t be long now before drug companies also start measuring glycemic variability as way to differentiate a drug.

The deals announced by JNJ and Sanofi also point to the fact that these players will not go quietly into the night, that they will do whatever they can to compete with Lilly and Novo.  The question now becomes what if anything will AstraZeneca do, a more compelling question since the company just announced a deal to acquire ZS Pharma (NASDAQ:ZSPH) for $2.7 billion. Lacking a presence in the insulin market the company continues to have holes in their diabetes portfolio. AstraZeneca also finds themselves fighting an uphill fight in diabetes, while sales of Bydureon seem to have improved they are well behind in the DPP4 and SGLT2 categories.

Even with all this activity we remain convinced that the diabetes drug market is transforming into a commodity market where price trumps performance. The twist now is companies in this market are arming themselves with more data in attempt to show all things are not equal, that their particular offering is really different than the competition. Again this is another reason we see glycemic variability being added to the mix, that measuring HbA1c and cardiovascular impact is no longer sufficient.

Suffice it to say the arms race has begun and all the players are bulking up. This is getting very interesting indeed!