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Diabetes Europe Healthcare Pharmaceuticals

Novo Nordisk mostly unaffected by COVID-19 in Q1

Novo Nordisk is with the exception of the postponement of new clinical trials mostly unaffected by COVID-19. Sales in Q1 were however positively affected by stock piling of insulin. Growth continues to be spearheaded by Ozempic®, whereas Victoza® and Levemir® in the US continue to lead the decline. Rybelsus® revenue totaled DKKb 229 in the US in Q1. Rybelsus® was approved for the treatment of adults with type 2 diabetes in the EU on April 4th.

Novo Nordisk is experiencing positive GLP1R growth in the US due to Ozempic® and despite of Victoza®. Negative growth for insulin is led by Levemir®.

GLP1R

Novo Nordisk and Eli Lilly are both experiencing GLP1R growth in the US thanks to Ozempic® and Trulicity®, whereas Victoza® is declining.

Obesity

Saxenda® for the treatment of obesity is also growing within and outside the US.

Eli Lilly has the dual GIP/GLP1 receptor agonist Tirzepatide (LY3298176) in phase 3 for diabetes (SURPASS) and obesity (SURMOUNT1 / NCT04184622), but it has gastrointestinal issues such as nausea, diarrhea and vomiting. The cardiovascular risk outcome trial (NCT04255433) is set to start this year.

Novo Nordisk has semaglutide for obesity in phase 3 (STEP). Results are expected in Q2 for STEP1 (NCT03548935), STEP2 (NCT03552757), STEP3 (NCT03611582) and STEP4 (NCT03548987) and later this year for STEP6 (NCT03811574). Results from the cardiovascular outcome trial SELECT (NCT03574597) is not expected until 2024.

Insulin

Insulin is declining in the US led by Levemir® from Novo and Lantus® from Sanofi. Tresiba® (daily injection) is holding its ground in the US. Novo Nordisk has long acting Insulin Icodec (weekly injection / LAI287) in phase 2. The initiation of phase 3 could be affected by COVID-19.

Appendix

Bloomberg – Novo Nordisk Joins Other Drugmakers With Gains on Virus Stockpiling

Reuters – Novo Nordisk’s drug sales boosted by virus-related stockpiling

Bloomberg – Novo Nordisk CEO on Earnings, 2020 Outlook, Coronavirus

Early Rybelsus® uptake further supports GLP-1 NBRx and TRx market leadership in the US

Novo Nordisk experiences growth among the GLP1R class of drugs, but this is offset by the decline of insulin in the US.

The diabetes world market as a whole across companies and across drugs is growing outside the US.

Growth of the sale of anti-diabetic drugs is experienced by Eli Lilly within and outside the US and by Novo Nordisk outside the US, whereas Merck, Sanofi and AstraZeneca are all declining in the US.

The GLP1R drug class (e.g. Ozempic® from Novo) is growing in the US, whereas insulin (e.g. Lantus® from Sanofi), DPP4 (e.g. Januvia® from Merck) and SGLT2 (e.g. Invokana® from J&J) are all declining in the US.

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2019Q4 Diabetes Europe Healthcare Pharmaceuticals

Novo Nordisk poised to fire on all new GLP1 cylinders following the fourth quarter of 2019, but shares fairly valued

  • Anti-diabetic oral GLP1 drug Rybelsus® (semaglutide) received FDA approval on September 20th and 70%-80% of patients are not coming from other injectables.
  • GLP1 drug segment is growing led by the weekly injectable anti-diabetic drug Ozempic® (semaglutide) approved for CV risk reduction in the US.
  • Revenue in US diabetes segment is flat due to declining revenue of the daily injectable GLP1 drug Victoza® (liraglutide) and insulins such as Levemir®.
  • Growth of sales and operating profit expected to be 3-6% and 1-5%, respectively.
  • Shares fairly valued for now.

Diabetes

The revenue from anti-diabetic drugs in the US is flat across companies such as Novo Nordisk, Eli Lilly, Merck and Sanofi despite the growth of Ozempic® due to declining sales of Lantus® (insulin glargine from Sanofi), Victoza® (GLP1 liraglutide from Novo Nordisk), Levemir® (insulin detemir from Novo Nordisk), Januvia® (DPP4 sitagliptin from Merck) and others.

Novo Nordisk still has the leading position in diabetes, but Eli Lilly has gained ground within and outside the US thanks to its GLP1 drug Trulicity®, SGLT2 drug Jardiance® and generic insulin glargine Basaglar®.

GLP-1

The GLP1 class of drugs in particular are showing strong growth within and outside the US.

The GLP1 class of drugs (diabetes and obesity) generate more revenue in the US for Novo Nordisk than insulin.

Novo Nordisk leads the GLP1 class within and outside the US.

The GLP1 leadership position is due to the anti-diabetic drugs Ozempic® (weekly injectable semaglutide) and Rybelsus® (oral semaglutide) as well as anti-obesity drug Saxenda® (liraglutide). Ozempic® is partly cannibalizing Victoza® (daily injectable liraglutide).

Rybelsus® received FDA approval for the treatment of type 2 diabetes in the US and positive EU CHMP opinion. Ozempic® was approved in the US for CV risk reduction.

In January, the U.S. FDA approved an Ozempic label expansion to include its use in reducing the risk of major adverse cardiovascular events so-called MACE including cardiovascular death, nonfatal heart attacks, nonfatal strokes in adults with type 2 diabetes and established cardiovascular disease.

The approval was based on the SUSTAIN 6 cardiovascular outcomes trial in which Ozempic reduced the MACE risk by 26% versus placebo, in both cases as addition to standard of care in people with type 2 diabetes and increased cardiovascular risk.

The FDA also updated the Rybelsus label to include additional information from the PIONEER 6 outcomes trial in which Rybelsus demonstrated CV safety with MACE occurring in 3.8% of people on Rybelsus versus 4.8% on placebo treatment.

Last week, the European regulatory authority, CHMP, issued a positive opinion for Rybelsus the first all oral biological treatment for adults with insufficiently controlled type 2 diabetes. The recommendation is for Rybelsus to be indicated as monotherapy when metformin is considered inappropriate as well as in combination with other type 2 diabetes medications.

CSO Mads Krogsgaard Thomsen on Q4 earnings call

Very interestingly it was revealed that the first few Rybelsus® patients are mostly switching from tablets rather than injectables. This could be an indication, that the oral Rybelsus® will not be cannibalizing the injectable Ozempic® the same way the weekly-injectable Ozempic® has and is cannibalizing the daily-injectable Victoza®.

What we see with Rybelsus® is that the primary number of this are coming from patients that are not previously on injectable medication. So that means to the tune of between 70% and 80% of the patients sourcing a source from either the naive patients, metformin patients, SGLT-2 or DPP-4. So that is a relatively big change compared to what we saw with Ozempic® by the time of launch where was exactly the opposite initially. So that confirms the expected positioning of Rybelsus® in the market so far, but it’s still early days of course.

Camilla Sylvest – EVP and Head, Commercial Strategy and Corporate Affairs on the 2019Q4 earnings call

Japan could become the 2nd best market behind the US for Rybelsus®, because of the low penetration of injectables in Japan.

Japan I think is the second largest single-country opportunity for us in Rybelsus® if we can get it right after U.S. It’s predominantly an oral market as you know. Injectables are only I think 14% of the market. So of course, we are very excited about the introduction of Rybelsus® there.

Maziar Doustdar – EVP, Head of International Operations on the 2019Q4 earnings call

Ozempic® was one of the fastest growing drugs in the US and in the world in 2019. Its sales are on pace to exceed those of Victoza® in 2020.

Victoza® biosimilars might put some pricing pressure on Ozempic®, but they will not hit the market until 2023 following the settlement of the US patent litigation case on Victoza® (liraglutide) with Teva in March 2019.

Insulin

Novo Nordisk still has a leadership position in insulin within and outside the US despite declining revenue in the US.

The decline in insulin revenue is led by the once- or twice-daily Levemir® (insulin detemir) in the US, which is facing competition from insulin glargine (Basaglar® from Eli Lilly and Lantus® from Sanofi) and insulin lispro (Admelog® from Sanofi and Humalog® from Eli Lilly). Sales of the once-daily long-lasting insulin Tresiba® (insulin degludec) on the other hand is not deteriorating.

The phase 2 trial of the weekly-injection long acting insulin Icodec (LAI287) was successfully completed. Phase 3 is set to be initiated in the second half of 2020.

How icodec achieves its very smooth profile hinges upon the enhanced albumin binding in the circulation.

CSO Mads Krogsgaard Thomsen on the 2019Q4 earnings call

Obesity

Saxenda® (liraglutide) has developed into a best-selling anti-obesity drug.

Novo Nordisk looks set to dominate the obesity space in the first half of the decade following pipeline abandonment by Sanofi (GLP1R/GIPR/GCGR agonist SAR441255) and Novartis (ACVR2B targeting mAB BYM338/Bimagrumab). Results from the phase 2 trial on the once-weekly amylin analogue AM833 is expected this year. So are results from a GDF15 analog in phase 1. Most importantly semaglutide obesity phase 3 results are due mid-2020. A phase 2 obesity trial has already shown weight loss for semaglutide exceeding that of liraglutide (Saxenda®). The diabetes trials SUSTAIN and PIONEER also showed weight loss for semaglutide.

A phase 2 obesity trial showed weight loss for semaglutide.
SUSTAIN trials showed weight loss for subcutaneous/injected semaglutide.
PIONEER trials showed weight loss for oral semaglutide.

Haemophilia

NovoSeven® is the best selling drug in the biopharma portfolio with annual sales exceeding a billion US dollars.

Revenue from NovoSeven® is not declining despite rejuvenated competition in the space.

On NovoSeven®, years back we guided that we would expect to lose maybe potentially 50% of the business. Consistently, we’ve seen since the launch of Hemlibra® that that erosion is slower than what we had expected.

CEO Lars Fruergaard Joergensen on the 2019Q4 earnings call

Novo Nordisk has two phase 3 trials (NCT04083781 and NCT04082429) on the antibody Concizumab (NN7417) of the tissue factor pathway inhibitor (TFPI).

Another anti-TFPI is Marstacimab (PF-06741086) from Pfizer ($PFE), which has two ongoing trials (NCT03363321 and NCT03938792).

Furthermore bluebird bio in October 2019 entered into a research agreement with Novo Nordisk to develop in vivo genome editing candidates for haemophilia.

Biomarin ($BMRN) is also working on a gene therapy for the treatment of haemophilia (BMN270); e.g. NCT03370913.

Valuation and comparison with peers

Novo Nordisk has better operating margins than its peers due to better gross margins and lower R&D spending.

Time series of operating margins.
Time series of gross margins.
Time series of R&D as a percentage of revenue.
Time series of SG&A as a percentage of revenue.

Novo Nordisk was trading at attractive multiples during the winter 2017/2018 due to uncertainty about future growth rates. Now the stock seems more fairly valued given the expected single digit growth rates going forward.

Time series of price to operating income.
Time series of price to earnings.

Appendix

Pipeline

References

2020-02-05 Reuters – Novo Nordisk sees slower 2020 growth with U.S. insulin prices pressured

2020-02-05 GlobesNewswire – Novo Nordisk’s operating profit increased by 11% in Danish kroner and by 6% at constant exchange rates (CER) in 2019

2020-01-30 EMA – First oral GLP-1 treatment for type 2 diabetes

2020-01-30 GlobesNewswire – Rybelsus® (oral semaglutide) recommended for approval for the treatment of adults with type 2 diabetes by the European regulatory authorities

2020-01-16 GlobesNewswire – Ozempic® approved in the US for CV risk reduction in people with type 2 diabetes and established CVD

2020-01-16 PR Newswire – FDA approves Ozempic® for cardiovascular risk reduction in adults with type 2 diabetes and known heart disease, updates Rybelsus® label

2019-11-18 Dicerna – Dicerna and Novo Nordisk Enter Agreement to Discover and Develop RNAi Therapies for Liver-Related Cardio-Metabolic Diseases

2019-10-09 bluebird bio – bluebird bio and Novo Nordisk Enter into Research Agreement to Develop in vivo Genome Editing Candidates for Haemophilia and Other Severe Genetic Diseases

2019-10-01 Noom – Novo Nordisk and Noom to partner around digital health solutions to help people with obesity lose weight and keep it off

2019-09-20 FDA – FDA approves first oral GLP-1 treatment for type 2 diabetes

2019-09-20 GlobeNewswire – Rybelsus® (semaglutide tablets), the first GLP-1 in a tablet approved in the US

2019-09-16 Medtronic – Medtronic and Novo Nordisk Enter Agreement to Provide Integrated Digital Solutions for People with Diabetes

Clinical Trials

NCT04083781 – Novo Nordisk – Research Study to Look at How Well the Drug Concizumab Works in Your Body if You Have Haemophilia With Inhibitors (explorer7)

NCT04082429 – Novo Nordisk – Research Study to Look at How Well the Drug Concizumab Works in Your Body if You Have Haemophilia Without Inhibitors (explorer8)

NCT03363321 – Pfizer – PF-06741086 Long-term Treatment in Severe Hemophilia

NCT03938792 – Pfizer – Study of the Efficacy and Safety PF-06741086 in Adult and Teenage Patients With Severe Hemophilia A or B

NCT03987919 – A Study of Tirzepatide (LY3298176) Versus Semaglutide Once Weekly as Add-on Therapy to Metformin in Participants With Type 2 Diabetes (SURPASS-2) – https://clinicaltrials.gov/ct2/show/NCT03987919

NCT04184622 – A Study of Tirzepatide (LY3298176) in Participants With Obesity or Overweight (SURMOUNT-1) – https://clinicaltrials.gov/ct2/show/NCT04184622

NCT04153929 – A Study to Test Whether Different Doses of BI 456906 Are Effective in Treating Adults With Type 2 Diabetes. – https://clinicaltrials.gov/ct2/show/NCT04153929

NCT03591718 – A Study to Test Different Doses of BI 456906 in Patients With Obesity – https://clinicaltrials.gov/ct2/show/NCT03591718

Nightly Business Report – October 23, 2019
Eli Lilly CEO on 3Q Results, Drug-Pricing Reforms

ReutersNovo Nordisk nudges up 2019 sales outlook as new drugs excel

BloombergNovo CEO Jorgensen on Biopharma, Insulin Prices, Innovation

Reuters – Sales of Eli Lilly diabetes drug Trulicity fall short, shares drop

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Uncategorized

Oral semaglutide (Rybelsus®) receives FDA approval for the treatment of type 2 diabetes

The FDA has issued a press release regarding the approval of the first oral GLP-1 treatment for type 2 diabetes. Novo Nordisk also issued a press release on Rybelsus®. Novo Nordisk in the US issued a separate press release. In terms of future peak sales this might be the most important FDA approval of any drug this year.

Insulin has in recent years lost market share to drugs such as injected GLP1, oral SGLT2 and in particular oral DPP4 such as Januvia® from Merck and Trajenta® from Eli Lilly.

Novo Nordisk has annual sales of approximately $17B of which more than 80% originate from anti-diabetic drugs. The oral DPP4 drug Januvia® in 2016 reached worldwide peak sales of approximately $6B. Rybelsus® does not have the same side effects as DPP4 and it is not impossible imagining Rybelsus® reaching peak sales as high or higher than Januvia®. Sales of Victoza® and Levemir® will continue to shrink as they are cannibalised by their superior equivalents Ozempic® and Tresiba® and other drugs. But this deterioration will most likely be more than offset by Rybelsus® going forward.

The late stage clinical trial SOUL (NCT03914326) for oral semaglutide follows the phase 3 PIONEER studies. If this trial is succesful, then this could put Rybelsus® on par with other GLP1 class drugs in terms of major adverse cardiovascular events (MACE) and further boost sales of Rybelsus® in the decade ahead.

Additionally it is worth pointing out that injected semaglutide is already used for the treatment of obesity (Saxenda®) and oral semaglutide could very well be approved for the same purpose.

Novo Nordisk has with the approval of oral semaglutide for the treatment of type 2 diabetes (Rybelsus®) positioned itself well for the future. But the approval might have been expected by the market for the past few years and a lot of it might already be priced in as witnessed by the somewhat insignificant share price movement of approximately +2% following the approval.

Reuters – Novo Nordisk wins U.S. approval for first-of-its-kind oral diabetes drug

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Uncategorized

Recent developments in the diabetes landscape halfway into 2019

All manufacturers of anti-diabetic drugs have issued press releases on their Q2 earnings. Novo Nordisk on August 9th and Eli Lilly on July 30th. And the 79th Scientific Sessions of the American Diabetes Association took place June 7-11, so a look at the changes in the diabetes landscape is due.

Worldwide sale of insulin continues to deteriorate, whereas the GLP1 class of drugs (e.g. Trulicity® from Eli Lilly and Ozempic® from Novo Nordisk) continues to grow within and outside the US.

The majority of the growth in the US is spearheaded by Lilly and the GLP1 drug Trulicity®, whereas Sanofi and their insulin Lantus® continues to descend lower.

GLP1

The previous GLP1 bestseller Victoza® is descending from its peak sales, whereas Trulicity® is now the best selling GLP1 drug and Ozempic® the fastest growing. Interestingly semaglutide against obesity (Saxenda®) is turning into a blockbuster drug for Novo Nordisk. The GLP1 sale at Novo Nordisk could further accelerate, if oral semaglutide is approved by the FDA on 20th of September. Other noteworthy GLP1 news are summarised below. One of them regarding benefits of the phase III dual agonist tirzepatide from Eli Lilly. Another regarding the filing of oral semaglutide for FDA approval six months ago.

  • 26Jun Lilly’s AWARD-11 trial studying higher investigational doses of Trulicity® (dulaglutide) demonstrated superiority in A1C reduction in people with type 2 diabetes
  • 09Jun Trulicity® (dulaglutide) significantly reduced major cardiovascular events for broad range of people with type 2 diabetes
  • 08Jun Lilly’s tirzepatide demonstrates benefits in data presented at the American Diabetes Association’s® 79ᵗʰ Scientific Sessions®
  • 20Mar Novo Nordisk files oral semaglutide for US regulatory approval of glycaemic control, as well as for CV risk reduction for oral semaglutide and Ozempic®

Insulin

In terms of insulin, Lantus® from Sanofi is slowly bleeding to death in the US caused by the patent expiration and the launch of the analog Basaglar® by Eli Lilly. Levemir® from Novo Nordisk is also deteriorating in the US and this is not offset by growing sales of the newer Tresiba®. Similarly Humalog® from Eli Lilly will suffer in the coming quarters from the launch of a generic insulin Lispro by Eli Lilly itself and the analog Admelog® by Sanofi. Today and tomorrow belongs to the GLP1 class of drugs and not to insulin.

  • Jun09 Lilly’s ultra rapid lispro provided similar A1C reductions compared to Humalog® (insulin lispro), with superior post-meal blood glucose reductions
  • May22 Lilly’s Lower-Priced Insulin Now Available

SGLT2

The SGLT2 drugs Farxiga® from AstraZeneca and Jardiance® from Eli Lilly continue to show positive growth in the US, whereas Invokana® from Merck displays negative growth. In the case of AstraZeneca SGLT2 is their fastest growing antidiabetic drug class. Recent news regarding the SGLT2 class of drugs are mentioned below.

  • Sep01 Detailed results from Phase III DAPA-HF trial showed Farxiga significantly reduced both the incidence of cardiovascular death and the worsening of heart failure
  • Aug20 Farxiga met primary endpoint in landmark Phase III DAPA-HF trial for the treatment of patients with heart failure

DPP4

Along with insulin the DPP4 class of drugs will probably be a loser going forward. Oral semaglutide, injected GLP1 and SGLT2 will continue to take market share from DPP4 going forward. The big loser will continue to be Januvia®/Janumet® from Merck, which is currently the best selling antidiabetic drug in the world with combined TTM sales just shy of USD 6B. Eli Lilly is planning to launch a combined SGLT2/DPP4 tablet according to the June press release below.

04jun U.S. FDA Accepts New Drug Application for Triple Combination Tablet for Adults with Type 2 Diabetes

Novo Nordisk and Eli Lilly

The figures below summarise the sales for Novo Nordisk and Eli Lilly for individual drugs. For Novo Nordisk the losers are Levemir® and Victoza® and the future and current winner is oral and injected semaglutide (Ozempic®), respectively. Tresiba® is only partially offsetting the revenue loss by Levemir®. The big winner for Eli Lilly is Trulicity®. A future winner might be their phase III dual agonist, which is discussed elsewhere in this article. The insulin Basaglar® is cannibalising Lantus® and the SGLT2 drug Jardiance® is also doing well within and outside the US.

Novo Nordisk sales in 2019Q2 and 2018Q2 of antidiabetic and antiobesity drugs (DKKm).
Eli Lilly sales in 2019Q2 and 2018Q2 of antidiabetic drugs (USDm).

Studies

The table below summarises some of the ongoing or recently finished GLP1 studies from Sanofi, Eli Lilly and Novo Nordisk.

CompanyStudy IDTrial IDDrugStudy
LillyAWARD-11NCT03495102Dulaglutide
SanofiAMPLITUDE-DNCT03684642EfpeglenatideDulaglutide
SanofiAMPLITUDE-LNCT03713684EfpeglenatideGlargine
SanofiAMPLITUDE-MNCT03353350EfpeglenatidePlacebo
SanofiAMPLITUDE-SNCT03770728EfpeglenatideSulfonylurea
SanofiAMPLITUDE-ONCT03496298EfpeglenatideMACE
LillySURPASS J-monoNCT03861052TirzepatideDulaglutide
LillySURPASS-1NCT03954834Tirzepatide
LillySURPASS-2NCT03987919TirzepatideSemaglutide
LillySURPASS-3NCT03882970TirzepatideDegludec
LillySURPASS-4NCT03730662TirzepatideI Glargine
LillySURPASS-5NCT04039503TirzepatideI Glargine
NovoSOULNCT03914326SemaglutideMACE
NovoPIONEER 12NCT04017832O SemaglutideSitagliptin

Valuation

Eli Lilly is more than just Trulicity® and diabetes (e.g. Taltz®), but it is very richly valued despite terzepatide and other interesting drugs in the pipeline. Levemir® will continue to deteriorate for Novo Nordisk and Ozempic® will continue to cannibalise Victoza®, but a positive catalyst is the expected approval of oral semaglutide on September 20th; oral semaglutide could take market share from injected GLP1 (USD9B), SGLT2 (USD3B), DPP4 (USD8B) and insulin (USD18B). There is a lot of potential upside. Neither company is particularly attractive at current prices.

P/S time series for manufacturers of anti-diabetic drugs.
Categories
2019Q1 Diabetes

Diabetes developments in the first quarter of 2019

Press releases regarding first quarter results have been issued from diabetes competitors Novo Nordisk, Eli Lilly, Sanofi and others. Four of the main antidiabetic drug types manufactured by these pharmaceutical companies are insulin, GLP-1 receptor agonists, SGLT2 inhibitors (gliflozins) and DPP4 inhibitors (gliptins). The development in each of the four drug categories is covered in separate sections belows. Revenue market share is shifting from insulin to GLP1 and it is happening faster in the US than the rest of the world.

GLP-1 receptor agonists

Victoza® (daily injection GLP1R agonist liraglutide) from Novo (-18% YoY in the US) is competing with the weekly injection GLP1R agonists Trulicity® from Lilly (+26% YoY and -9% QoQ in the US) and in particular Ozempic® from Novo itself (+41% QoQ in the US).




It is not unreasonable to expect GLP1 to further gain value share of the total diabetes market going forward given the expected approval of oral semaglutide following the PIONEER studies and the expiration of patents on insulins Lantus®, Levemir® and Humalog®.

The dual agonist Tirzepatide (LY3298176) for the treatment of diabetes has progressed to phase 3 and Lilly is currently recruiting for the clinical trials SURPASS-3 (versus insulin degludec – Tresiba®) and SURPASS-4 (versus insulin glargine – Lantus®).

Saxenda® (liraglutide) from Novo has quickly become the best selling anti obesity drug in the world (+47% YoY).

Insulin

Lantus® (insulin glargine) from Sanofi (-37% YoY in the US) is competing with the biosimilar Basaglar® (+56% YoY in the US) from Lilly.


Humalog® from Lilly (-11% YoY in the US) will be competing with the biosimilar Admelog® from Sanofi (+18% QoQ in the US) and the recently launched generically labeled insulin lispro at half price from Lilly itself.

Despite the price pressure on insulin, Tresiba® from Novo displayed positive growth (+21% YoY and +5% YoY in the US). The ultralong-acting daily injected Tresiba® (insulin degludec) reduces the risk of hypoglycaemia.

But despite the growth from Tresiba® Novo experienced negative growth in the insuling segment because of NovoMix® (-20% YoY), NovoRapid® (-6% YoY), Levemir® (-8% YoY) and human insulin (-17% YoY). Furthermore Levemir® faces patent expiration in 2019. Sanofi experienced negative growth because of Lantus® (-37% YoY in the US), whereas Lilly experienced positive growth because of their biosimilar Basaglar® (+56% YoY in the US).

SGLT2 ihbitors (gliflozins)

The SGLT2 inhibitors however have side effects that oral semaglutide does not have. But Farxiga from Astra and Jardiance® experiences growth (+17% and +35% YoY respectively) while FDA approval of oral semaglutide is pending.


DPP4 inhibitors (gliptins)

Boehringer Ingelheim and Lillyannounced in February, that the CAROLINA cardiovascular outcome trial of Trajenta® met its primary endpoint of non-inferiority compared with glimepiride.

Merck wrote in their earnings press release, that sales of Januvia®/Janumet® “declined slightly due to continuing pricing pressure in the United States, which more than offset strong demand from international markets.”

Below are headlines from the press following the earnings releases:
Bloomberg: Eli Lilly CEO on 1Q Results, Drug Pricing, Pharma Margins
Reuters: Eli Lilly misses estimates for top-selling diabetes drug Trulicity, shares slip
Reuters: Novo Nordisk profit tops forecast as new diabetes drug shines

Categories
Uncategorized

Eli Lilly & Novo Nordisk – Episode 2018Q3 – The ongoing battle for GLP1 market share

Diabetes rivals Eli Lilly and Novo Nordisk and their smaller diabetes competitors such as Sanofi, Merck, AstraZeneca and Johnson & Johnson have all released their Q3 results. Below is a summary of Novo and Lilly and their shared therapeutic area diabetes and their shared drug class GLP1.

GLP1 receptor agonists come with the HbA1c advantages of insulin as shown by the SUSTAIN studies, but without the risk of hypoglycemia and without the side effects of SGLT2 inhibitors and DPP4 inhibitors, and with the added benefit of weight loss and weekly injection (Ozempic® from Novo) or no injection at all (oral semaglutide from Novo).
Click for the results of the Novo SUSTAIN studies



GLP1 is now recommended as the first injectable medication by the American Diabetes Association (ADA) and the European Association for the Study of Diabetes (EASD). Subcutaenous GLP1 is the superior drug class and is the reason both companies experienced growth as per the quarterly earnings releases:
Novo: Novo Nordisk’s operating profit decreased by 6% in Danish kroner and increased by 2% in local currencies in the first nine months of 2018
Lilly: Lilly Delivers Solid Third-Quarter 2018 Results, Revises EPS Guidance

The earnings releases from the two companies created a few headlines:
Novo Reuters: Upbeat sales lift Novo Nordisk as drugmaker weathers U.S. pricing pressure
Novo Bloomberg: Novo Nordisk Winning in Rivalry With Lilly, CEO Says
Lilly Reuters: Trulicity leads mixed third quarter for Lilly; shares sink
Lilly Bloomberg: Eli Lilly’s Big Picture Justifies Its Lofty Valuation

Both companies and the FDA also sent out some notable press releases during the 3rd quarter and prior to their Q3 earnings releases:
Click for the press releases in chronological order


Lilly 05nov2018: Trulicity® (dulaglutide) demonstrates superiority in reduction of cardiovascular events for broad range of people with type 2 diabetes

Lilly 05nov2018: Initial results from EMPRISE real-world evidence study show Jardiance® was associated with reduced risk for hospitalization for heart failure compared with DPP-4 inhibitors in people with type 2 diabetes with and without cardiovascular disease

Novo 26oct2018: Oral semaglutide demonstrates statistically significant reductions in HbA1c and body weight in people with long duration of type 2 diabetes treated with insulin [PIONEER 8]

Lilly 2018oct04: Lilly’s Investigational Dual GIP and GLP-1 Receptor Agonist Shows Significant Reduction in HbA1c and Body Weight in People With Type 2 Diabetes

Novo 2018oct02: People with diabetes may achieve improved glycaemic control with Tresiba® versus glargine U100, without an increase in hypoglycaemia

Lilly 2018sep26: Chugai and Lilly Enter into a License Agreement for Oral GLP-1 Agonist, OWL833

FDA: FDA warns of serious genital infection linked to certain diabetes drugs

Novo 2018aug20: Oral semaglutide provides superior HbA1c and weight reductions versus placebo in people with type 2 diabetes and renal impairment in the PIONEER 5 trial

Novo 2018aug17: Novo Nordisk acquires Ziylo Ltd to accelerate its development of glucose responsive insulins

Both companies are seeing growth in the US in their GLP1 receptor agonist class of drugs; i.e. Trulicity® from Lilly and Victoza® and Ozempic® from Novo. Insulin sales in the US are declining led by Lantus® from Sanofi, which is facing competition from generic insulin glargine (Basaglar®) from Lilly.

Lilly is the only company seeing growth in the US due to their GLP1 receptor agonist Trulicity®, their analog of insulin glargine Basaglar® and their SGLT2 inhibitor Jardiance®. Lantus® from Sanofi is losing market share to Lilly and their insulin glargine analog (Basaglar®). Novo is experiencing a sales decline in insulin in the US, but this is offset by GLP1s Victoza® and Ozempic®.

Insulin

Insulin sales in the US are down; especially Lantus® from Sanofi in the US after Lilly launched their generic version of insulin glargine (Basaglar®), but Novo is also taking a beating.

GLP1

GLP1 sales are up in the US led by Trulicity (weekly injection) from Lilly and Victoza® (daily injection) and the newly launched Ozempic® (weekly injection) from Novo.



DPP4

Sales of DPP4 inhibitors such as Januvia® and Janumet® from Merck are flat and have been overtaken by GLP1 receptor agonists Merck still holds the vast majority of the DPP4 market share in the US.

SGLT2

Sales of the SGLT2 inhibitor Invokana® from J&J continues to deteriorate, whereas Farxiga® from Astra and Jardiance® from Lilly displays growth within and outside the US. Unlike GLP1 receptor agonists the combined sale of SGLT2 inhibitors are mostly flat.

Novo

Novo Nordisk continues to see insulin sales slide (Levemir® being overtaken by Tresiba® in the US), but Victoza® continues to grow despite a loss of market share in terms of prescriptions to Ozempic®. The patent on insulin aspart (NovoRapid® and NovoMix®) has expired and that on insulin detemir (Levemir®) will expire in 2019, so Novo will have to rely on subcutaneous and oral GLP1 for growth going forward.

Lilly

Eli Lilly is seeing continued growth for their GLP1 Trulicity® within and outside the US. Sales of Humalog® were down in the US, which management tried to explain. Humalog® (insulin lispro) will probably face competition from Sanofi and Admelog® going forward. Basaglar® (insulin glargine) continues to grab market share from Sanofi and their Lantus® in the US. The SGLT2 inhibitor Jardiance® is also showing continued growth unlike Invokana® from J&J.

Click for an excerpt from the Lilly Q3 transcript regarding Humalog sales


Related to Humalog and Basaglar on the overall diabetes portfolio, first, I think we’re very pleased with the overall volume growth when it comes to the diabetes portfolio.

Clearly when it comes to Humalog, we did see a 14% price decline vis-a-vis Q3 of 2017. Just to provide maybe a little more color on this, we are seeing in a favorable segment mix about 8 points of that 14. Patient affordability is impacted in the insulin portfolio. That’s another 4 points. And then we had a unfavorable property (22:24) adjustment as a comparator to last year’s quarter.

Maybe to provide and try to be a little more instructed, yes, we do see a lot of volatility with Humalog. It is better to look at this product on a year-to-date basis. And when we look at it on a year-to-date basis, I think the trend that we basically see is mid-single digit erosion on price.

The future

Some of the interesting drugs in the pipelines of the two companies are the dual GLP1/GIP agonist LY3298176 (tirzepatide) from Lilly and the oral GLP1 NN9023 from Novo.

The CSO of Novo Nordisk (Mads Krogsgaard Thomsen) did shine a bit of light on the oral GLP1 NN9023 during the earnings call:
Click for an excerpt from the Novo Q3 transcript regarding NN9023

Yes. So the analogue 2023 is based on the original research on the series of compounds that led to semaglutide not supposed to exhibit greater efficacy per se than Sema, because it’s not really been possible to identify any GLP-1s that do so. However, it’s been optimized for oral exposure, that basically means that you can deliver lower oral dosing level achieve the same degree of exposure of the body or alternatively, you can go to the same doses with oral Sema and achieve a higher degree of exposure and hence a higher degree of efficacy.

So what analogue 2023 enables is one of two things: either higher efficacy, implying that it could be developed for obesity, could be developed for NASH, could be developed for high efficacy in type two diabetes; or you can match oral Sema as we know today and that would lead to a reduction in the cost of goods sold. And all of that we’ll know a lot more about next spring when we report the data both from this trial and from the second-generation oral semaglutide tablet formulation. They’re reporting approximately at the same time.

Vis-a-vis, the FDA and the CV discussions, we are essentially have had very constructive dialog with the agency, where basically they are confirming that we have promising data with the SUSTAIN 6, however they need some kind of confirmation before we can have a CV indication for Ozempic and that confirmation can actually come in the form of either a bridging study even with an oral route of administration of semaglutide such as the so-called oral trial.

Or in the best of all worlds, if the PIONEER 6 trial designed only to show safety were to in the upside scenario, provides signs of efficacy i.e., improved cardiovascular performance, then of course, that dialog will be held with the FDA. So that’s where we stand today, planning for ORALSO trial, but eagerly awaiting PIONEER 6 data. Thank you very much.

The president of Lilly Diabetes (Enrique A. Conterno) revealed just a small amount of details regarding the dual GLP1/GIP agonist tirzepatide (LY3298176) and the upcoming SURPASS studies:
Click for an excerpt from the Lilly Q3 transcript regarding tirzepatide

Yeah. So as we’ve shared as part of tirzepatide’s Phase 3 program, we are planning to study three maintenance doses at 5, 10 and 15 mg.

I think what we’ve learned is that we should titrate in smaller increments and over time. As we’ve shared, we have a titration study that we intend to share the details next year. But clearly we’ve learned a lot from the study in terms of what are the optimal titration schedules.

We are planning aggressively when it comes to starting this trial and starting enrollment. So you’ll be hearing more when it comes to our trial for Type 2 diabetes soon.

As far as REWIND, I don’t want to speculate on the particular indication that we will get. But clearly, this is important for the class in that it confirms what other GLP-1s have shown when it comes to seeing benefit.

And, I’m sorry, I cannot resist, but I heard Novo Nordisk’s call. And they also mentioned that GLP-1s were not all the same, and I think we agree with them.

Final comments

Based on valuation Novo Nordisk currently seems to be a better option than Eli Lilly.

The best years of both companies are probably ahead of them given the current and future prevalence of diabetes and obesity around the world.