Novo Nordisk's Tresiba gets panel backing, but with caveats

An FDA advisory panel's recommendation for the approval of Novo Nordisk's long-lasting insulin Tresiba, with provisos, was mixed news for both Novo and Sanofi ($SNY), which produces the lead competitor, Lantus. Novo ($NVO) moves ahead, but more slowly, with its highly anticipated insulin challenger, but Sanofi can see it gaining in its rearview mirror.

The agency panel voted 8-4 to approve the basal insulin analog and another therapy that combines it with a bolus insulin, but voted 12-0 that Novo should further study the heart risks of the potential blockbuster. The recommendations, if accepted, add time and money to Novo's equation for the drug. The FDA is not bound by the panel's decision, but heart risks of diabetes drugs have been of greater concern since concerns were raised over GlaxoSmithKline's ($GSK) infamous Avandia, which has been pulled in Europe and restricted in the U.S.

Novo had submitted Tresiba to the FDA for approval last year and had hoped that would happen this year. Now it tells Bloomberg that it will work closely with the agency and hopes for approval in the first half of next year. The company told Reuters that it expects FDA approval in the next two to 10 months and estimates that the additional heart risk study will cost about $256 million over 6 years.

For Sanofi, it means Lantus can remain supreme, at least a little longer. Its shares were up about 2% early while Novo's surged as much as 10%. Lantus dominates the long-acting insulin market with sales of about $5.1 billion for 2011. It has grown 17% so far this year, with a tad more than $3 billion in first-half sales. Novo, however, has data from a head-to-head study against Lantus that shows Tresiba performing better at preventing nighttime blood sugars from falling too precipitously.

Tresiba has already gotten approval in Japan and a positive recommendation from an advisory panel in Europe, but with 25 million Americans diagnosed with diabetes, the U.S. is the key market.

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