It's on: With simultaneous FDA nods, Sanofi and Novo to vie for combo-med market

In the end, it was a tie. Sanofi and Novo Nordisk, which had traded leads in their race to market with a new type of combination diabetes treatment, both won FDA approval for their entrants Monday.

Novo’s Xultophy and Sanofi’s Soliqua, which combine basal insulins with noninsulin GLP-1 therapies, were both delayed when their initial FDA-decision deadline came along. Sanofi had bought a priority review voucher—to the tune of $245 million—to leapfrog Novo to the FDA finish line.

That voucher didn’t pay off as hoped, obviously, and Novo and Sanofi now have simultaneous clearance to launch—and a tough fight for market share ahead. In the past, Novo has waited to roll out newly approved products, but with the obvious head-to-head battle against Sanofi, it may take a different tack this time.

Sanofi said Tuesday that Soliqua would be priced on par with solo GLP-1s in the U.S., as reported by Reuters. Novo said it’s planning to roll out Xultophy at a list price that's 20% lower than the combined cost of Victoza and Tresiba, and negotiate payer discounts from there.

Both companies are looking to these combos to help boost sales amid unprecedented pressure on their pricing in the U.S. Analysts have said that the market for such GLP-1/insulin combo drugs could be worth $6 billion or more, and they’ve pegged Xultophy as a $1.2 billion drug by 2021, and Soliqua at up to $960 million by 2022.

Billion-dollar sales would be welcome. Novo, which focuses almost exclusively on diabetes, and Sanofi, whose diabetes franchise has historically been the company’s top performer, have both suffered formulary exclusions from some payers and forced discounts from others. They’ve cut their financial guidance, their shares have suffered, and their executives are contending with investors eager for a resurgence, so much so that Novo, which has historically shied away from business development, now says it’s considering augmenting its lineup via dealmaking.

Sanofi’s Soliqua combines the French drugmaker’s recently approved GLP-1 drug Adlyxin with its basal insulin Lantus, which has long dominated that field—and delivered $7 billion to its top line last year. Novo’s marries its GLP-1 blockbuster Victoza, which remains the market share leader in the class despite new competition from Eli Lilly’s weekly injection Trulicity, and its recently FDA-approved basal insulin Tresiba, a follow-up to its big-selling basal insulin Levemir.

In addition to the usual launch challenges—physician uptake, patient awareness—Xultophy and Soliqua will face the same hurdles now slowing down the companies’ other products. The convenience of combination dosing isn’t enough for some payers to move these new products onto their formularies; the more aggressive negotiators, such as CVS Health and Express Scripts, have been reluctant to adopt some two-in-one meds. At the least, top payers will be looking for discounts and rebates in exchange for formulary positioning.

The upshot? Analysts believe both launches will be slow.

Bernstein analyst Ronny Gal has said Xultophy could be a “best” product for diabetes. But he also sees pricing as an obstacle, because Victoza is already pricier than insulin alone. Bernstein expects Novo to price the combo product at $25 to $30 per day, at least $9 more than an insulin regimen, he said. “Payers will find Xultophy expensive,” Gal stated bluntly in a note to investors earlier this year.

Sanofi’s upfront promise of a discount might offer Soliqua an advantage. The French drugmaker has a particular consideration—the forthcoming Lantus biosim, Basaglar—that could affect its pricing choices, he noted. The company could “primarily view the drug as a protection mechanism for Lantus and will price it at modest price increase to the single agent Lantus, creating pricing pressure on the category,” Gal said.

Novo’s Xultophy had been tipped as more likely to win the better label, partly because Novo tested the drug specifically in patients whose blood sugar wasn’t well controlled on GLP-1 drugs. Sanofi’s product hasn’t yet undergone the same test, though the French drugmaker does plan a similar study.

Xultophy has another data edge to tout as well. Victoza has put up outcomes data showing it can reduce the risk of heart complications, including heart attack and cardiac death. Sanofi’s CV safety trial showed that Soliqua didn’t increase risks, but didn’t reduce them, either.

Editor's note: An incorrect mention saying Tresiba is not on Express Script's 2017 formulary was removed and a typographical error in this story was corrected.