After Eli Lilly reported street-beating diabetes sales in the first quarter while Sanofi’s suffered, all eyes were turned to Novo Nordisk. And it's good news, more or less, for the Danish company, thanks to its GLP-1 franchise, which made up for ongoing trouble in the insulin field.
Naturally, analysts zeroed in on the company’s GLP-1 drugs—its all-important franchise, what with basal insulins continually under pressure—on Wednesday's earnings call. In a closely watched competition with Lilly’s weekly therapy Trulicity, Novo’s daily Victoza—which won a cardiovascular risk-reduction nod last August—delivered 18% growth to nearly DKK 6 billion, or almost $1 billion, and kept its lead spot in the class.
Lilly’s rival is quickly catching up, though. It grew sales by 82% to $678 million in the same three months.
Novo’s solution to that rivalry is its own weekly GLP-1, Ozempic, and the drug has some data to back its case. In a head-to-head trial, Ozempic beat Trulicity at cutting blood sugar and helping patients lose weight.
So far, the injectable hasn't delivered as analysts expected—its $11 million in sales fell short of consensus—but the drug’s just been on the market for two months, and the company says doctor feedback has been strong. Payer negotiations are progressing well, too, Novo said, pegging sales this year at DKK 1 billion, or about $161 million.
"The switch to Ozempic has begun and our analysis suggests initial coverage is strong," Bernstein analyst Wimal Kapadia said in a Wednesday note. "Despite our assumption for price declines ... we are 19% ahead in 2022 for the injectables."
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So far, Novo’s original GLP-1 is still at the head of the market. Citing IQVIA’s February data, the company said Victoza’s 48% global share—down from 56% last year—still beats the rest of the class. And some of that market share was lost to Ozempic.
To further pad its case in GLP-1, Novo is working on an oral version of semaglutide, with a whopping 10 late-phase trials slated to read out this year, including one looking at CV outcomes from over 3,100 patients.
And besides, Novo and Eli Lilly maintain that growth across the class will give both competitors room for growth regardless of share. IQVIA data showed that the GLP-1 drugs now boast a 12.3% share of the entire diabetes market, up from 10.2% a year ago. Bernstein analyst Tim Anderson has concurred with the companies, predicting there's enough room for both companies' GLP-1s to deliver.
Novo isn’t looking for GLP-1 expansion only in diabetes, either. The company has identified obesity as a growth field, despite the obstacles other weight loss drugs have hit in recent years. And Saxenda, with the same active ingredient as Victoza, put up a 64% sales boost to reach DKK 770 million.
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One reason why the GLP-1s are so important to Novo—and Lilly, for that matter—is that pricing pressure in the class isn’t as intense as it is in the basal insulin field, where the already-large slate of competitors continues to grow—and new or forthcoming players include biosimilars.
“There is of course pressure from any payer on negotiating contracts, but it’s not the same nature as we see in the basal category where products are being put up against each other and excluded,” CEO Lars Fruergaard Jørgensen said on the first-quarter earnings call.
Kapadia said Bernstein is hiking its estimates for Novo’s drugs in the class, expecting volume growth for Victoza and Ozempic to more than offset the price cuts the firm anticipates across the company's entire diabetes portfolio.
Novo’s insulin sales stood unchanged at local currencies overall, despite the stalwart Levemir’s 22% decline. The far newer Tresiba, Novo’s hope in the category, salvaged the company's insulin total by posting 33% growth to DKK 1.76 billion—and according to Bernstein data, surpassed Sanofi's Toujeo in the process.
And the company hopes it has a new edge against Lantus, and its biosimilars. Tresiba recently won an FDA label expansion to tout its ability to reduce the risk of hypoglycemia by 40% compared with Sanofi’s market-leading treatment.
The ultrafast-acting mealtime insulin Fiasp, launched together with Ozempic in the U.S. early February, got DKK 83 million.
All told, Novo’s first-quarter sales grew 5% at local currencies to 26.93 billion Danish kroner ($4.34 billion), and net profit increased by 6% to DKK 10.8 billion. Growth mainly came from Tresiba, Victoza and Saxenda, with some help from those new launches, Ozempic (semaglutide) and Fiasp.
Based on the first-quarter performance, Novo has raised the lower end of its 2018 sales growth forecast. It now expects growth in the range of 3% to 5% measured in local currencies. Bernstein has pegged revenue to grow slightly more, at 6%.