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| Kåre Schultz |
This has not been a great year for Denmark's Novo Nordisk ($NVO) so far--the diabetes drugmaker failed to post double-digit sales growth in the first quarter for the first time in four years. But the company believes its 2014 performance is just a temporary blip. Kåre Schultz, Novo's deputy CEO, predicts the company's annual revenues will double within the next decade. Novo posted sales of 83.6 billion DKK ($15.3 billion) last year.
Schultz believes that by 2020, 40 million diabetes patients will be using Novo's products, up from 20 million now, he told Reuters. That should push revenues up at least 10% a year. If the FDA approves the company's long-lasting insulin product, Tresiba, that's another boost. And if it expands the label of Novo's GLP-1 drug liraglutide--sold as Victoza for diabetes--to include obesity, sales will grow even faster, he says. "If we get both approvals, we will be able to increase our global share of the diabetes market," Schultz told Reuters.
That's a lofty goal, considering the regulatory challenges Novo has faced, particularly with Tresiba. Last year, the FDA turned down the drug, citing the need for more studies backing up its cardiovascular safety profile. Novo CEO Lars Rebien Sørensen vowed earlier this year that the company would complete those studies--and the company has said it's ahead of schedule on recruiting.
Novo continues to try to expand the market for its insulin and non-insulin treatments. At the recent American Diabetes Association conference, Novo presented one-year data from a study of Victoza plus Tresiba that showed better blood-glucose control than either treatment alone. Meanwhile, Novo expects an early indication on liraglutide's fate as an obesity treatment when an FDA advisory panel convenes in September.
The market for non-insulin diabetes treatments is becoming increasingly competitive for Novo. Victoza is facing fresh competition from GlaxoSmithKline's ($GSK) new once-weekly injection, Tanzeum, which is about 40% less expensive than Novo's product, according to Reuters. Schultz said he views Eli Lilly's ($LLY) experimental dulaglutide as a bigger competitive risk, however. At the ADA conference, Lilly presented data showing dulaglutide's efficacy is comparable to that of Victoza, though Novo's drug did produce more weight loss. Schultz told Reuters that Victoza is in a strong position, with 71% of the global market for GLP-1 drugs.
The GLP-1 class continues to expand despite recent safety concerns. Critics worry the drugs might raise the risk of pancreatitis. The FDA and EU reviewed the data on Victoza and other drugs in the class earlier this year and cleared them, but the FDA is still under pressure to consider withdrawing Victoza from the market. Novo is undeterred. In fact, Schultz told Reuters, the company is determined to grow the diabetes market even more by developing oral formulations of its hit drugs. It has another GLP-1 pill in mid-stage trials and is in the early stages of developing an insulin pill.
-here's the Reuters story
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