Novo Nordisk looks to Saxenda, semaglutide to squeeze out sales growth as U.S. vise tightens

Novo Nordisk is navigating a tough stretch thanks to increased competition and a new state law adding to the already-tough pricing pressure in the U.S. insulin market. But the drugmaker has a plan to come out ahead, looking to grow weight loss injection Saxenda, launch its ultrafast insulin Fiasp in the U.S., and win FDA approval for its blockbuster candidate semaglutide.

In earnings released Wednesday, Novo Nordisk said third-quarter sales were up 2% to $4.15 billion while profit was up 5%. Last year's long-acting insulin launch Tresiba, stalwart GLP-1 med Victoza and its sister weight-loss injection Saxenda, which has the same active ingredient, helped fuel revenue gains in the first 9 months of the year. Their sales increased 117%, 15% and 80% versus the same period last year, respectively.  

Tresiba sales have reached $800 million so far as that med approaches blockbuster status. Victoza—which recently won an FDA cardiovascular indication that Novo hopes can fuel future gains—reeled in $2.5 billion in the first 9 months of 2017. But overall, the drugmaker's third-quarter revenue slightly missed Wall Street consensus expectations because sales for Tresiba and Levemir came up short, according to a note from Jefferies analyst Jeffrey Holford.

On the flip side, earnings per share beat Street estimates by 3% on lower costs and with an assist from other incomes.  

The drugmaker slightly boosted its 2017 financial expectations, within previous ranges, and presented 2018 guidance of low- to mid-single-digit sales growth at local currencies. The company is guiding for low- to mid-single-digit operating profit growth next year as well, but it expects a 3% to 4% hit from currency effects.

Holford noted that the guidance seems below "consensus expectations, as the company faces competition … and price pressure in diabetes." Novo faces a potential fight in hemophilia from Roche's emicizumab, which won an FDA priority review back in August.

RELATED: FDA panel supports cardiovascular indication for Novo’s diabetes drug Victoza 

The company separately faces state-level pricing and transparency regulations in the U.S., an emerging trend that CEO Lars Fruergaard Jorgensen said could make it "difficult to do business," according to Reuters. So far, Maryland, Nevada and California have passed individual measures, with Nevada's taking specific aim at the diabetes business.

"It is an environment where transparency will clearly go up, and we are trying to deal with that," Novo CFO Jesper Brandgaard told FiercePharma. "We are little bit concerned that the increased transparency will lead to significant additional burdens."

Brandgaard said transparency on rebates may prompt purchasers to ask for the same discounts, which are currently different depending on the size of the purchaser. He said the concept "may not be a very simple thing to implement."

Looking ahead, the company is awaiting an FDA decision on semaglutide, a GLP-1 diabetes medication that would square off against Eli Lilly's Trulicity. After a 16-0 panel vote in favor of approval, the FDA is expected to act on the diabetes drug in the fourth quarter, according to Novo. Execs hope the med can expand the entire class, and market intelligence firm Evaluate has predicted semaglutide could reach $2.2 billion in sales by 2022.

Also this quarter is the U.S. launch for new ultrafast-acting insulin Fiasp, according to the drugmaker. Novo won approval for that drug in September, and Bernstein analysts have predicted it could reach $500 million in sales by 2020.

Building sales for weight loss injection Saxenda is another focus for Novo heading into next year. CFO Jesper Brandgaard said the company's efforts are about "building awareness" and trying to reduce prior authorization hurdles or physicians.