Novo's Victoza may gain on Bydureon delay

Bad news for Eli Lilly could be good news for Novo Nordisk. Now that FDA has asked for more research on Bydureon, the long-acting form of Lilly and Amylin Pharamceuticals' Byetta, Novo has more time to woo patients to its rival drug Victoza--up to 20 months more, by some estimates.

Novo just launched the GLP-1 drug in January, and sales have so far been encouraging. The company even raised its revenue and profits forecast based in part on Victoza's early success. Six months after launch, the drug had already captured 27 percent of the U.S. market for that class of diabetes treatment. And Byetta is the only other drug in the class.

Victoza's momentum could have lost steam, however, if the FDA had gone ahead and cleared Bydureon for marketing. The proposed drug is a weekly injection, rather than a once-daily shot like Victoza, so it's seen as easier to use. Indeed, the fact that Victoza is once a day, versus twice a day for Byetta, has been a selling point for the Novo drug.

But instead, FDA asked for a study of Bydureon's heart risks, pushing potential approval into 2012. "This delay provides Novo a much longer window to entrench Victoza," Leerink Swann analyst Joshua Schimmer says in a note to investors, according to Bloomberg.

Novo needed the boost: Over the past couple of days, investor fears of biosimilar competition for its insulin drugs had battered the company's stock. The risk is a few years away, analysts note, but the fact that biosimilar developer Biocon teamed up with Pfizer, the world's biggest drugmaker, hyped up the fear. So there's plenty of drama still ahead for the diabetes market.

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