Novo Nordisk has been fighting head-to-head with Eli Lilly for share in the GLP-1 diabetes market—and losing, as Lilly's weekly Trulicity stole scripts from Novo's daily Victoza. But now that Novo has its own weekly GLP-1 drug in Ozempic, the tide appears to be turning.
And with its oral version of semaglutide at the FDA for review, another growth boost could be on its way.
Rather than losing share to Lilly so far this year, Novo's chunk of that class in the U.S. grew to 44.1% by April, up from 43% at the end of December. And that was no thanks to Victoza, whose share dropped by several percentage points, and sales fell by 10% to DKK 5.72 billion.
The growth was all Ozempic. The new med's sales of DKK 1.43 billion beat analyst consensus of DKK 1.3 billion cited by Reuters, and its share of the GLP-1 field grew to 11.8%.
“Based on our launch of Ozempic in the U.S. we see that we are stopping our loss in market share [of GLP-1],” CEO Lars Fruergaard Jorgensen said, according to the newswire.
Right now, Lilly holds 46.1% of total U.S. GLP-1 market share, still a couple of points ahead of Novo's total. And the gap might close further, as Novo is now winning more than half of new GLP-1 scripts in the U.S. While Victoza’s U.S. new-to-brand share dropped from 40% last January to 19.6% in April, Ozempic has nabbed 30.5% since it was launched in February 2018, Jorgensen said.
“We have never expected Victoza to keep growing when we launched Ozempic because it is just a much better product,” Jorgensen said of Victoza’s lower-than-expected sales, as quoted by Reuters.
Novo’s total GLP-1 sales stood at 7.15 billion Danish krones ($1.07 billion) in the first quarter, up 11% at constant currencies over last year.
Ozempic's quick launch might explain why Trulicity fell short of analysts’ expectations in the first quarter despite a 30% year-over-year jump. During Lilly’s earnings call Tuesday, Lilly Diabetes President Enrique Conterno attributed the performance to falling U.S. prices, which held back the overall expansion in GLP-1 and Lilly’s own market share grab.
The competition could well get worse, and sooner than Lilly might have expected. In March, Novo used a priority review voucher to speed oral semaglutide's path at the FDA to six months. Along with it, Novo asked the FDA to simultaneously review the pill's ability to cut cardiovascular risks—and filed an application to add Ozempic's cardiovascular benefits data to its label.
In a recent note to clients, Bernstein analyst Wimal Kapadia argued that because oral semaglutide touches upon both older branded orals and the GLP-1 class that is now injectable-only, it holds the power to shake up the overall diabetes market.
Apart from GLP-1, Novo’s diabetes business didn't deliver such impressive results. Its first-quarter insulin sales did grow 2% at constant exchange rates, but in the U.S. market, that business plummeted 14% to DKK 5.83 billion on increased pricing scrutiny.
Just like leaders from fellow insulin majors Sanofi and Lilly, Jorgensen, during an interview with CNBC, pointed the finger at rebates collected by pharmacy benefits managers as the root of rising U.S. insulin prices.
Novo’s net insulin prices have dropped since 2015, he said. “So when you have a situation where patients increasingly have to pay more, I think it’s important to look at the total supply chain,” he said, adding that Novo paid around $17 billion to $18 billion in rebates last year.