GlaxoSmithKline made waves last week with a raft of new strategic initiatives—including pulling GLP-1 laggard Tanzeum from the market. And that move could signal weak sales ahead for other bottom-feeders in the class.
New Glaxo CEO Emma Walmsley’s plans “stole the day” Thursday, with news of Tanzeum’s end—as well as the scrapping of some other programs—providing “more ‘fireworks’ than we expected,” Bernstein analyst Tim Anderson wrote in a note to clients. The way he saw it, the move reaffirmed that “even at a lower price, inferior drugs only have a limited audience.”
Glaxo had tried to price its med at a discount to its GLP-1 rivals, but even those price breaks hadn’t helped Tanzeum gain traction, Anderson noted. For 2017, leading PBM Express Scripts knocked Tanzeum off its preferred formulary, turning its spot over to Eli Lilly star Trulicity.
And in a post-earnings-release investor meeting, last week, Glaxo acknowledged that the struggling med “should have been de-resourced earlier,” Anderson said.
Diabetes doesn’t exactly fit into the treatment areas GSK’s been doubling down on. Respiratory and HIV are the main revenue drivers within its pharma portfolio, and down the line, it’ll be focusing on oncology—a field it previously exited—and immuno-inflammation, the company said last week.
Not so for its main GLP-1 competitors. Lilly and Novo, the field leaders with Trulicity and the Danish drugmaker’s Victoza, are both heavily focused on the diabetes space, with offerings across the disease spectrum.
And with those two top dogs duking it out at the top of the GLP-1 field, Anderson’s fellow Bernstein analyst Ronny Gal doesn’t see big things ahead for AstraZenenca’s older med Byetta or Sanofi’s Adlyxin, either. He went one step further than Anderson, name-dropping the pair as players that fall into that “inferior drugs” category that can’t be helped by discounts.
"We remain convinced that Adlyxin, when used with basal insulin, offers meaningful clinical value but we recognize that the GLP-1 market in the U.S. is highly competitive, so significant investment would be required," a Sanofi spokeswoman said in a statement, adding that "we will implement appropriate tactics for the lixisenatide franchise in the U.S."
Meanwhile, the GLP-1 market is only set to get more competitive with the arrival of Novo’s much-hyped, once-weekly semaglutide, which, like Victoza, has shown it can slash cardiovascular risks. And Novo is testing an oral, once-daily version of its candidate, too.