Newly minted GlaxoSmithKline diabetes drug faces formidable foes in GLP-1 market

There's a new kid on the diabetes block. GlaxoSmithKline's ($GSK) albiglutide, now dubbed Tanzeum for the U.S. market, nabbed FDA approval Tuesday. Now, the drug will go up against a triad of other GLP-1 treatments, including Novo Nordisk's ($NVO) powerhouse Victoza and AstraZeneca's ($AZN) exanatide franchise.

But Tanzeum may have a tough time becoming the popular kid on the block. Its supporting data doesn't give it an efficacy edge on Victoza, so its once-weekly dosing--compared with the Novo drug's once-daily schedule--is Glaxo's best talking point. But Bydureon is a once-weekly drug, too. Plus, any early gains could be wiped out with the approval of Eli Lilly's own once-weeky GLP-1 med, dulaglutide, which Lilly ($LLY) hopes will come this year.

Analysts see the Lilly drug as a $2-billion-or-so seller in a GLP-1 market set to hit $5 billion total. They figure dulaglutide's once-weekly dosing--and its new data showing it matches Victoza on efficacy--could help it conquer about one-third of that $5 billion market. That would leave Glaxo's new drug fighting with the already-dominant Victoza, plus Byetta and Bydureon, to grab as much of the remaining share as possible.

And that's why analysts figure Tanzeum for $218 million in sales by 2016, a Bloomberg analyst survey recently found. That's not much compared with Victoza's $2-billion-plus in 2013 sales, though it does approach Byetta and Bydureon's $357 million takedown.

And then there's the potential for price competition. Glaxo hasn't yet announced a price for Tanzeum in the U.S., but analysts have said they see Lilly undercutting Victoza's price--which may force Glaxo toward deeper discounts as well.

Meanwhile, Sanofi ($SNY) is edging toward the U.S. market with lixasenatide, recently approved in Europe under the brand name Lyxumia. The FDA asked for more cardiovascular safety data on the French drugmaker's latest diabetes entry, putting off potential approval to 2016. Analysts see that drug, with once-daily dosing, peaking at $450 million.

- see the Glaxo release

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