Novo Nordisk ($NVO) says its new drug Saxenda has a niche in the U.S. obesity market. Now, the Danish drugmaker has the chance to prove it. Saxenda is rolling out across the country as we speak, and at a premium price.
Saxenda will enter a market newly crowded with weight-loss drugs. It will face the challenges particular to obesity meds--including persuading doctors to prescribe drugs for weight loss. And at more than $1,000 per month, Saxenda will further test payers' willingness to treat obesity as a disease. By contrast, Contrave, the latest obesity entrant, runs $200 per month, according to press reports.
But Novo has a strategy for that. A giant in the diabetes field, Novo believes its relationships with endocrinologists can vault Saxenda ahead of its rivals. Plus, doctors already are familiar with the drug itself; Saxenda is a reformulation of liraglutide, the active ingredient in its blockbuster GLP-1 drug Victoza.
|Novo Nordisk deputy CEO Kare Schultz|
And here's where Saxenda's niche comes in. Deputy CEO Kare Schultz said earlier this year that Novo is aiming for insurance coverage in people who are "morbidly obese," with a BMI of 35 or above.
"[T]hat's where the sort of cost-benefit of the therapy is clearly positive and where you can get health outcomes that clearly justify putting people on this therapy," Schultz said during the company's Q4 earnings call. "It's too early unfortunately to say to what extent it will be successful."
That's partly a recognition of competition in the marketplace. Vivus ($VVUS) and Arena Pharmaceuticals ($ARNA) each launched an obesity med--Qsymia and Belviq--two years ago, with Eisai signing on as Arena's partner soon after. Both meds have struggled to gain traction. Eisai's marketing push has given Belviq a boost recently, but the Japanese company's recent sales cutbacks--including layoffs--could put a damper on that effort.
Orexigen rolled out Contrave last year, with Takeda on board as a marketing partner, and some analysts see it as a more formidable competitor in the field; so far its prescriptions are growing at a decent pace, and it's capturing about a third of the scripts in the field. And Takeda has 900 reps on the street promoting the med.
Takeda has its own connections with endocrinologists, too, from its marketing of the now-off-patent treatment Actos. Its co-pay assistance program puts a lid on patient costs, but then again, Belviq and Qsymia have their own coupons. A shakeup in Takeda's commercial organization might complicate matters--but then again, it might not.
Novo will be fielding 500 reps to promote Saxenda. But despite the marketing spend and niche strategy, Novo is expecting ramp-up to be slow. Analysts have said Saxenda could hit $1.5 billion in sales at peak, while Novo says it has "blockbuster potential."
Varun Saxena contributed to this report.