AstraZeneca, Flying Solo, Sees Momentum Take Off In Diabetes

The company launched three diabetes drugs in 2014, just after breaking off a joint venture with Bristol-Myers and taking over full control of the business. U.S. President Paul Hudson talked about the evolution of AstraZeneca’s diabetes business – and where it stands today – in a recent interview.

It’s been nearly one year since AstraZeneca PLC took full control over its diabetes business, ending a six-year joint venture with Bristol-Myers Squibb Co., and the business appears to be reenergized.

AstraZeneca launched three new diabetes drugs in 2014, making diabetes one of the company’s strongest-growing business segments.

AstraZeneca’s portfolio now includes several commercial drugs to address the pre-insulin market across a range of mechanisms. But the business has grown through fits and starts, having transitioned through ownership changes. U.S. President Paul Hudson said the business is finally on a solid trajectory during an interview at the J.P. Morgan Healthcare conference.

“I think right now, literally right now, we are in a really good place,” Hudson said. The business area has been highlighted by CEO Pascal Soriot as one of the company’s six core growth areas, along with the blood thinner Brilinta (ticagrelor), respiratory, emerging markets, Japan and, more recently, oncology (see related story, (Also see "With Oncology Drugs On The Way, AstraZeneca Sets The Stage For New Launches" - Pink Sheet, 26 Jan, 2015.)).

“There is a real start-up mentality that they are building their own identity, but building it within AstraZeneca,” Hudson said of the diabetes unit.

It has taken several years for AstraZeneca to hit its stride in diabetes. That’s because the diabetes unit has gone through several leadership changes over the course of its evolution. AstraZeneca and Bristol first came together to collaborate in diabetes in 2007, when they agreed to develop and sell two of Bristol’s then-investigational compounds, the dipeptidyl peptidase-4 inhibitor saxigliptin (now Onglyza) and the sodium/glucose co-transporter 2 (SGLT2) inhibitor dapagliflozin (now Farxiga).

In 2012, the two pharmas expanded their collaboration by acquiring together the diabetes specialist Amylin Pharmaceuticals Inc. for $6.8 billion, adding Amylin’s first-in-class glucagon-like peptide-1 agonist (GLP-1) Byetta (exenatide) and its long-acting follow-on Bydureon (Also see "Bristol And AstraZeneca Make A Splash In Diabetes With Joint Purchase Of Amylin" - In Vivo, 30 Jul, 2012.).

AstraZeneca U.S. President Paul Hudson

The acquisition came at a critical time, however, just as Amylin was in the midst of launching Bydureon after losing its original big pharma partner Eli Lilly & Co. Bydureon, a once-weekly injection, never gained solid footing in the market against the once-daily standards of care, as much because of the complicated delivery method as the distraction of the merger.

Then, in December 2013, AstraZeneca announced plans to buy out Bristol’s stake in the alliance, paying $2.7 billion up front, as well as $1.4 billion in regulatory and commercial milestones to go it alone in diabetes (Also see "AZ Doubles Down On Diabetes, Buys Out Bristol’s Share in Alliance" - Pink Sheet, 19 Dec, 2013.).

Standing Alone In Diabetes

“The day that everyone became AstraZeneca employees – 2,200 people in the U.S. – was the day that we launched Farxiga,” said Hudson. “It is not highly recommended in management textbooks, but it was a real coming together.”

A lot of AstraZeneca’s more recent momentum in diabetes has been about getting the business organizationally to a place where it is humming. Under the Bristol alliance, the business had parallel structures, which since have been removed. The diabetes group works out of its own building, located in Fort Washington, Penn., chosen originally for its proximity to Bristol’s and AstraZeneca’s U.S. offices. It’s a cross-functional team made up of everyone from medical to finance and commercial.

“There is a real start-up mentality that they are building their own identity, but building it within AstraZeneca,” Hudson said. Some of the employees are originally from AstraZeneca, others from Bristol and still others from Amylin.

“We realized quite early the Amylin experience and their long-term presence in diabetes, particularly around GLP-1s,” Hudson said. As a result, the company sought to retain as many of the former Amylin employees as possible to tap that expertise, he said.

“We built our own reputation on the back of the launches that we too are experts,” he added.

Following on the heels of the February launch of Farxiga, the company also launched a new easier-to-use pen version of Bydureon in September and Xigduo XR, a combination of dapagliflozin and extended-release metformin, late in the year. Diabetes sales increased 139% in the third quarter on the strength of the new launches.

The drugs all compete in crowded categories in a therapeutic area that is coming under increased scrutiny by payers, but the launches, according to Hudson, all have gotten off to a strong start – especially Farxiga.

Farxiga: One Of 2014’s Strongest Launches

Farxiga was the second SGLT-2 inhibitor to reach the market, behind Johnson & Johnson’s Invokana (canagliflozin), which was approved by FDA in March 2013. J&J beat AstraZeneca and Bristol to the market after dapagliflozin received a “complete response” letter in 2012 due to safety concerns (Also see "AstraZeneca’s Farxiga Label Includes, But Downplays, Bladder Cancer Risk" - Pink Sheet, 13 Jan, 2014.). A third rival, Boehringer Ingelheim GMBH/Eli Lilly & Co.’s Jardiance (empagliflozin) has since joined the market (Also see "BI/Lilly Bring Third Entrant To SGLT2 Market With Jardiance Approval" - Pink Sheet, 1 Aug, 2014.).

Despite having lost its first-to-market advantage, Farxiga appears to be off to a strong start. AstraZeneca hasn’t yet broken out sales of the drug, but IMS data show it was one of the strongest new drug launches in 2014 by sales metrics, generating sales of $136.7 million from its launch through October (Also see "Head Of The Class: A Star Stands Out Among 2014 Drug Launches" - Pink Sheet, 5 Jan, 2015.).

“We benefited partly from being new and another mechanism, but mostly from the class growth,” said Hudson. “We were all trying to build the educational perspective.”

One of the things patients and physicians have found most gratifying about the class of medicines is not only the HbA1C reductions the drugs deliver, but the weight loss component, he added. “The patient for the first time is getting into a positive cycle,” he said. “What they do next is they comply with their meds.”

Win Some, Lose Some – “It Is Okay”

Despite positive initial uptake, payers have been taking a harder approach to reimbursement of drugs in crowded therapeutic areas like diabetes. The pharmacy benefit manager Express Scripts Holding Co. has been the most aggressive lately about pitting competitors against each other to wring out the best pricing discounts.

In the GLP-1 class, for example, Express Scripts has not shied away from excluding what has been the standard of care, Novo Nordisk AS’ Victoza (liraglutide), from coverage. Its national formulary for 2015 includes Byetta, which is administered twice daily, as well as Bydureon and Eli Lilly & Co.’s new Trulicity (dulaglutide), both administered once a week (Also see "Lilly Prices Trulicity Near Victoza, But Well Above Tanzeum" - Pink Sheet, 19 Sep, 2014.).

In this instance, AstraZeneca appears to have come out on top, though every payer and class of medicines is different.

“The overall marketplace is competitive, perhaps more than it has ever been,” said Hudson. “The providers, the managed care plans, the PBMs, everybody is trying to improve their competitive position, and there are some choices being made.”

“You win some and you lose some, and it is okay,” he added.

As for Bydureon, Hudson said the new pen device has been well received in the market, though the company found itself launching the new device around the same time Lilly introduced its once-weekly GLP-1 Trulicity and GlaxoSmithKline PLC also launched a once-weekly GLP-1 Tanzeum (albiglutide) (Also see "Price Is GSK’s Weapon Ahead Of Tanzeum Launch" - Pink Sheet, 14 Jul, 2014.). The older version of Bydureon has to be reconstituted before administration, which limited its uptake, though Hudson said some patients still prefer to use it and that the company is offering all three formulations of exenatide on the market.

“What we’ve realized is that there is a great deal of understanding of the clinical benefit of exenatide,” he said. “People were really ready for exenatide in a pen and the launch uptake has been phenomenal.”

Sales of Bydureon grew 210% in the first nine months of 2014 to $317 million. Byetta contributed another $258 million in franchise sales, reflecting solid 69% growth. Sales of the DPP-4 Onglyza also grew strongly, up 188% to $620 million for the nine months.

Future growth in diabetes is expected to come from combination treatments, including Xigduo XR, the first and only once-daily combination tablet of an SGLT2 inhibitor and metformin HC1 extended-release. Up next AstraZeneca is developing a DPP-4/SGLT2 combination pill. The company is awaiting additional clinical trial data testing the combination, which it expects to have later this year, and depending on the timing of an FDA approval, it could be in a position to launch the combination a year later.

Beyond the combinations, AstraZeneca will have to rely on future innovation. “There are plenty of things for us to go after in terms of breakthroughs,” Hudson said.