Novo Nordisk Narrows Saxenda’s Positioning, Targets Seriously Ill Patients

The Danish diabetes specialist is preparing to diversify into obesity with the first launches of Saxenda expected in the first half of 2015. Competition is expected to increases for GLP-1 market leader Victoza but Novo Nordisk also expects a more benign U.S. pricing environment during the year.

Novo Nordisk AS’ entrant into the obesity market, the higher-dose glucagon-like peptide-1 analog Saxenda (liraglutide 3mg), likely will be positioned in the U.S. for the treatment of the morbidly obese, not individuals who are simply overweight, according to company Chief Operating Officer Kare Schultz.

Such an approach would tighten the focus of its U.S. marketing for Saxenda to a subset of patients for whom it is indicated. The product was approved Dec. 23 by FDA as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adults with obesity (body mass index (BMI) equal or greater than 30 kg/m²) or who are overweight (BMI equal or greater than 27) with at least one weight-related co-morbidity, such as type 2 diabetes and cardiovascular disease (Also see "A Busy Year-End, In Brief: December Brings Slate Of Approvals, And Setbacks" - Pink Sheet, 2 Jan, 2015.).

“We will be targeting individuals with a body mass index above 35 who have serious health issues, and in whom the cost-benefits are clearly positive,” Schultz told analysts attending a U.K. company roadshow on Feb. 3. This approach to where Saxenda would be positioned was confirmed by CEO Lars Rebien Sorensen, who said the co-morbidities of being overweight would be the focus of Novo Nordisk’s positioning to payers, rather than weight management.

The reimbursement hurdle is likely to be high, however, and the Danish group had only just started to talk to U.S. pharmacy benefit managers (PBMs) and employer plans after the product’s approval at the end of last year, Schultz said. “It’s too early to say whether we will be successful,” he added. The company has brought together a U.S. sales force of around 500 reps from its existing sales teams, to visit specialist weight-management physicians.

Saxenda received a positive opinion from Europe’s top advisory panel, the CHMP, during January (Also see "European Obesity Market To Liven Up After CHMP Backs Saxenda" - Pink Sheet, 23 Jan, 2015.). A U.S. launch is expected in the first half of 2015 and launches elsewhere in the second half of 2015. From discussions with European regulators, Saxenda is likely to have a broader label in Europe in terms of treatment claims than in the U.S., Schultz said.

Tresiba Sales Affected By Access

The importance of a good reimbursement outcome was shown by the differences in market uptake in 2014 of Novo Nordisk’s new long-acting basal insulin, Tresiba (insulin degludec) in different countries. In markets where it has the same level of market access as the market leader, insulin glargine (Sanofi’s Lantus), Tresiba penetrated the market well.

For instance, it has a 26% share of the basal insulin market by value in Japan after being launched in March 2013, Schultz reported. However, in countries where Tresiba has restricted market access, it has achieved only modest uptake, for example a 2% share in the U.K. and Denmark, and a 6% share in Sweden (Also see "Novo Nordisk Withholding Tresiba From German HTA Process" - Pink Sheet, 20 Aug, 2013.).

In the U.S., Novo Nordisk is conducting a cardiovascular outcomes trial DEVOTE for Tresiba after it received a “complete response” letter from the FDA in February 2013 (Also see "Novo Nordisk Dismayed By “Complete Response” Letter For Insulin Degludec" - Pink Sheet, 11 Feb, 2013.). An interim analysis is now underway, and a small unblinded team at the company will discuss with FDA whether to re-submit a marketing approval in the first half of 2015 on the strength of those data, or to wait until the end of the study in the second half of 2016, slightly earlier than previously expected.

Xultophy, a combination of insulin degludec and the glucagon-like peptide-1 (GLP-1) analog liraglutide (Novo Nordisk’s Victoza), has been launched in its first market, Switzerland, and the product is being positioned globally for use in patients on basal insulin who have inadequate control of their blood glucose, Schultz said.

The Novo executive was sanguine about the increasing competition to Victoza, which includes the launch of the once-weekly GLP-1 Trulicity (dulaglutide) by Eli Lilly & Co. (Also see "Lilly Prices Trulicity Near Victoza, But Well Above Tanzeum" - Pink Sheet, 19 Sep, 2014.). At the end of November 2014, Victoza held around 66% of the U.S. GLP-1 market in terms of volume, compared with a 33% share for AstraZeneca PLC’s once-daily and once-weekly exenatide products (Byetta and Bydureon), a 1.3% share for GlaxoSmithKline PLC once-weekly GLP-1 Tanzeum (albiglutide) and a 0.2% share for Lilly’s Trulicity.

“There may be preferences in the marketplace for either once-daily, or once-weekly products, but we believe it is unlikely that one product will take a major part of the market,” Schultz said. “If we look at what matters, its efficacy,” he added.

Also in Novo Nordisk’s late-stage product pipeline, according to Chief Scientific Officer Mads Krogsgaard Thomsen, are: a recombinant Factor VIII (NovoEight) likely to be approved in the U.S. in 2015; a once-weekly GLP-1 semaglutide that is in Phase III studies; an oral GLP-1 OG217SC in Phase II; a once-weekly growth hormone NN8640 entering Phase III for adults with growth hormone deficiency; and a long-acting amylin analog NN9838 in Phase I for obesity.

Stable U.S. Pricing In 2015

Unlike its diabetes competitor Sanofi, Novo Nordisk expects 2015 to be a relatively stable year for the pricing of its diabetes therapies in the U.S. In contrast, Sanofi warned in the 2014 third quarter that it would face a challenging U.S. diabetes pricing environment in 2015 (Also see "Uncertainty At Sanofi Highlighted By Turmoil In Diabetes (Updated)" - Pink Sheet, 28 Oct, 2014.).

The difference in expectations w possibly was due to a different view on what events Sanofi expected to occur during 2015, such as the advent of generic competition to insulin glargine or the launch of new products, explained Sorensen.

“The contracting environment for 2015, settled in the second half of 2014, was a poker game,” Sorensen said. Although he had no insight into Sanofi’s strategy, he suggested: “If you believed there might be generic competition, you might lower profitability to protect your market share.”

The Danish company expects pricing to be stable for Victoza in 2015, particularly as its sales in the U.S. in 2014 were not held back as much as expected by a decision by PBM Express Scripts Holding Co. to replace Victoza in plan formularies with Bydureon (Also see "PBMs See Room To Further Restrict Employer Plan Formularies In Coming Year" - Pink Sheet, 13 Jan, 2014.).

“A third of patients in the U.S. are covered by PBMs and plans that blocked Victoza, so we should have lost a third of our sales, but there was only a small ‘blip,’” noted Schultz. He attributed the lack of an effect to most patient plans opting out of closed formularies, and a significant number of patients in closed formularies staying on Victoza out of medical necessity.

North American sales of Victoza amounted to DKK 9,046 million ($1.4 billion) in 2014, up by 15% on 2013 sales. The growth of the GLP-1 segment of the anti-diabetes market also has picked up, due probably to the pancreatic cancer scare being refuted by FDA, Schultz suggested (Also see "FDA, EMA Lay Out Incretin Mimetic Safety Analysis In NEJM" - Pink Sheet, 26 Feb, 2014.).

This focus on U.S. pricing by the company reflects the importance of the U.S. market to Novo Nordisk in terms of sales growth: in 2014, its total sales in North America grew by 11% to DKK 43 billion and accounted for 61% of the company’s sales growth in the year. In contrast, Europe accounted for only 1% of sales growth, China for 14% and international operations (all countries except North America, Europe, Japan and China) for 25%. Seventy-nine percent of total sales of DKK 88.8 billion in 2014 were in diabetes care, with 88% of the sales growth put down to modern insulins and Victoza.

Chief Financial Officer Jesper Brandgaard noted that the company said six months ago that its sales in the basal insulin segment (mainly the long-acting insulin detemir Levemir) would be affected by higher rebates in 2015, and it was forecasting slightly lower U.S. sales for the company in 2015 than in 2014.

In overall terms, Novo Nordisk is expecting a 6%-9% growth in sales and a 10% growth in operating profits during 2015, in local currencies. Movements in currency exchange rates, including the appreciation of the U.S. dollar, are expected to have a significant effect on financial reporting in Danish kroner: sales growth in reported Danish kroner will be 12% and pretax operating profit 9% higher than in local currencies. Currency-hedging losses will negatively affect financial results until the fourth quarter, when the hedging ends and Novo Nordisk will gain a full positive effect from the U.S. dollar appreciation.