Will Victoza® follow the same path as Galvus®?
This past Thursday the European Commission granted marketing approval for Novo Nordisk’s (NYSE:NVO) GLP-1 Victoza®. This approval covers all 27 European Union member states. According to an article that appeared in the Wall Street Journal on July 3, 2009 Novo’s Chief Scientific Officer Mads Krogsgaard Thomsen stated Novo Nordisk hopes to launch Victoza in most of the EU region within about a year, starting on major markets such as Germany, the UK and Denmark.
Some may recall that way back in September of 2008 Novartis (NYSE:NVS) received European approval for their DPP-4 Galvus. Like Victoza, Galvus at the time was stalled at the FDA over safety concerns. Also like Novo, Novartis at the time was optimistic that the issue with the FDA could be resolved and Galvus would soon be approved by the FDA.
The two drugs also share another similarity as they both would be the second approved product in a new drug class. When Galvus received EU approval, Januvia from Merck (NYSE:MRK) was the only DPP-4 approved by the FDA. The same is true for Victoza with Byetta from Amylin (NASDAQ:AMLN) being the only FDA approved GLP-1.
Finally in the most ominous similarity Januvia and Byetta to this day remain the only FDA approved products from their respective drug class.
While EU approval is a positive step FDA approval is critical for Victoza if the drug stands any chance at being a commercial success. Proof of this comes from sales of Galvus which according to the most recent earnings statement from Novartis reached a whopping $26 million in the first quarter of 2009.
Novo has yet to provide an update on the US status of Victoza only stating that the company is in discussions with the FDA on how to proceed. Novo is facing a very difficult decision the longer these discussions labor on. With the long-acting once-a-week version of Byetta also awaiting FDA approval, it’s quite possible that even if approved Victoza would come to market as second tier technology. Diabetic Investor has said it many times; once a day injection is better than twice a day injection, once a week injection trumps all and yes it is that simple.
Novo also must realize that Amylin management has everything riding in making the LAR successful. The company knows that they won’t survive another proxy fight if LAR does not live up to its ever increasing expectations. With two dissidents now sitting on their board any mistake will be quickly pounced upon. Simply put, the future of Amylin, even with its solid pipeline, rides on the shoulders of LAR.
Considering how this situation is developing and the eerie similarities to how the Galvus situation has played out the folks at Novo must be worried. Prior to Victoza being delayed the drug stood a halfway decent chance of establishing a following in the US. Besides its once daily administration Victoza would have likely come in a patient friendly pen like delivery device. As we’ve said many times no one is better at designing patient friendly delivery systems than Novo Nordisk.
However everything changed after the FDA panel meeting. The company can no longer count on having time to blunt the arrival of Byetta LAR, and it’s even possible that LAR could hit the market before Victoza, which would effectively kill any chances the drug had at all. The question is then does Novo follow the same path as Novartis and market the drug in Europe or do the follow the path of Takeda who decided not to meet the FDA’s demands so their DPP-4 could receive approval? Given the statements made by the company it appears they will follow the Novartis path and try to recoup whatever they can from EU sales. They continue to hold out hope that the discussions with the FDA will lead to a positive result. But as we have seen with the Takeda situation these discussions don’t always yield the desired outcome.
When this situation finally resolves itself Diabetic Investor cannot help but think that the words of Henry Kissinger will ring true when he said; “It is generally unwise….to raise an issue when one is not prepared to accept the likely response.”