Novo wins FDA blessing for Ozempic, a weekly diabetes drug carrying big expectations

Novo's vaunted Victoza follow-up is here. The FDA on Tuesday approved Ozempic along with diet and exercise to improve glycemic control in adults with Type 2 diabetes, setting it on a path expected to lead to blockbuster sales.

A once-weekly GLP-1 diabetes drug, Ozempic won the agency's backing based on clinical trial data showing it can reduce HbA1c levels compared to placebo, Merck's Januvia, AstraZeneca's Bydureon and Sanofi's Lantus, according to the Danish diabetes specialist. The medication also demonstrated an ability to help patients lose weight. 

Due to its "unique clinical profile," Novo believes Ozempic "has the potential to set a new standard for the treatment of the disease," chief scientific officer Mads Krogsgaard Thomsen said in a statement following the nod. 

The drug also boasts head-to-head data against Eli Lilly's Trulicity showing it delivered better reductions in blood sugar and double the weight loss. Now, Novo will work to use those data to build sales in a crowded field and to expand the entire class of GLP-1 drugs, with some patients likely to switch from Novo's own blockbuster Victoza. 

Ozempic is expected to be among 2017's biggest drug launches, market intelligence firm Evaluate concluded earlier this year. The group has predicted $2.2 billion in 2022 sales for the medication. And it's among the drugs Novo is looking to for growth as its existing U.S. diabetes business suffers from pricing pressure and competition. 

The new FDA approval comes on the heels of a 16-0 vote in favor of the drug from independent experts; one panelist abstained. 

Novo didn't immediately provide pricing details, but ahead of the approval, Thomsen said the company planned to price the drug in line with other GLP-1 drugs; those medications are already on the high end of the pricing spectrum in diabetes. According to the Novo executive, GLP-1 drugs currently only hold a single-digit market share in diabetes, and Novo will work to expand that figure. 

Novo is also working to set up reimbursement deals with payers, who have already set up their 2018 formularies but could still choose to cover the new drug.