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 Novo's oral semaglutide medicine is important for ensuring the
group's long-term growth - a critical mission after 2017 results
last week revealed mounting price pressure in a crowded market
targeting the world's 450 million diabetics.
Rivals, especially Eli Lilly <LLY.N>, are watching Novo's
final-stage oral semaglutide trials closely, ahead of the drug's
potential 2020 launch.
The once-daily pill belongs to a blockbuster class of treatments
known as GLP-1s that stimulate insulin production, the first of
which were derived from the venomous bite of North America's Gila
monster lizard. So far, all have been injections.
While diabetics with advanced disease need daily insulin shots,
those at a less serious stage start on simple tablets, with GLP-1s
added as a potent new option since 2005.
Today, GLP-1s are embraced as a highly effective diabetes therapy
and semaglutide, which was approved as a once-weekly injection in
December, has out-gunned rivals in efficacy. But the needle is still
a barrier.
"There is resistance in some patients to move to an injectable
medication," said Dr. Jason Gaglia, a diabetes expert at the Joslin
Diabetes Center in Boston. "Once an oral is available I think there
will be significant interest in it."
If the data stack up from 10 pivotal Phase III studies reporting
results in 2018, the new drug could grab more than $5 billion in
annual sales, Deutsche Bank analysts believe.
Others are more cautious but investors overall are betting oral and
injectable semaglutide combined will supply around two-thirds of
Novo's revenue growth over the next five years, according to Thomson
Reuters consensus data.
That represents a life-line for Novo as it tries to differentiate
itself in diabetes at a time when its smaller biopharma division is
also struggling, prompting last month's abortive attempt to buy
Belgian biotech Ablynx <ABLX.BR>.
LATE BREAKFAST
But oral semaglutide is no simple tablet. This is a big, complex
molecule, known as a peptide, which would normally be destroyed by
stomach acid and it requires protection with a special compound to
boost absorption.
What's more, the drug must be in close contact with the stomach
wall, which means patients cannot eat for 30 minutes after taking it
and the pill can also cause nausea, raising questions about its
practicality.
Eli Lilly research chief Jan Lundberg told analysts last week: "It's
really a sub-optimal oral agent."
That may be sour grapes by Novo's arch-rival, whose own work on
developing an oral GLP-1 is only at the preclinical stage.
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But making patients wait half an hour for breakfast could affect
adherence and is a concern for investors - as is the question of
what Novo will charge for a drug that may perform as well as a
pricey injection but looks like rival pills that cost half as much.
Chief Science Officer Mads Krogsgaard Thomsen said Novo would pay
close attention to such factors as it tries to reach the
three-quarters of diabetics who are not yet on injections.
"If we get the balance between the drug's profile and the drug's
price and market access right then we can do phenomenally well," he
told Reuters.
Getting this far with oral GLP is already a notable achievement,
especially after an earlier oral insulin project was abandoned as
uneconomic in 2016.
Still, the devil will be in the details of the 10 Phase III trials,
the first of which will deliver results this quarter. Key trials
against Lilly and Boehringer Ingelheim's pill Jardiance and Merck &
Co's <MRK.N> Januvia will report later in 2018.
Most analysts expect oral semaglutide to beat these rivals in
controlling both blood sugar and weight. The size of the benefit
will feed into Novo's final pricing decision.
"The highest limit of where we could consider taking the pricing
would be injectable GLP-1 and the lowest level would be somewhere in
between current oral drugs and injectable GLP-1," Thomsen said.
SHUFFLING TREATMENTS
Doctors hope oral semaglutide will provide a new weapon to tackle
diabetes earlier with a highly effective therapy.
But Clifford Bailey, professor of clinical science at Britain's
Aston University and Dr. Gaglia in Boston said price would be
critical in determining its uptake both among U.S. insurers and
cost-conscious European healthcare systems.
If Novo gets over the pricing hurdle, Bailey and Gaglia believe the
new pill is set to reshuffle treatment regimens, with oral
semaglutide being used as a second or third treatment option after
cheap, generic metformin.
"It will certainly be welcomed by those patients who prefer to go
without their breakfast for half an hour rather than have an
injection," said Bailey.
Novo's nearest rival in developing an oral GLP-1 is Israel's Oramed
<ORMP.O>, which has a product in early-stage trials.
(GRAPHIC by Jacob Gronholt-Pedersen in Copenhagen; Editing by Anna
Willard)
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