Novo faces new hurdle in long-acting insulin race

Novo Nordisk’s bid to challenge Sanofi’s dominance of the long-lasting insulin market hit another snag after U.S. regulators delayed approval of the Danish drugmaker’s degludec until after an expert review.

Novo has said degludec could become a blockbuster - defined by the industry as a treatment that generates more than $1 billion in sales within five years of its launch. But some analysts see the drug with peak sales potential as high as the current $5 billion for Sanofi’s top-selling Lantus.

The delay by the U.S. Food and Drug Administration follows an earlier extension of the review process in June and could push the launch of the drug into next year. This is a blow to the world’s biggest maker of insulin since degludec is a pivotal new product with which it hopes to consolidate its position in the fast-growing diabetes market.

The FDA said in June it would decide on new drug applications for degludec on its own and in combination with insulin aspart on October 29. But the FDA has now said a further advisory committee meeting will be held on November 8, Novo said on Wednesday.

The FDA convenes advisory committees when it wants independent expert advice on scientific, technical and policy matters relating to new drugs.

Analysts said that the delay was likely to push the U.S. approval of the drug into early 2013, but Novo spokesman Mike Rulis declined to predict when the product would be launched.

“The FDA has not informed us about when they expect to make an approval decision,” Rulis said. “Since we don’t know that for sure, we cannot say anything about an expected launch date.”

“It is hard to say what kind of a delay we are talking about,” Rulis added. “There are examples of when the FDA has made decisions just five or six weeks after advisory committee meetings have been held, and sometimes it takes months.”

Rulis said the FDA had not informed the company what it wanted the advisory committee to discuss.

The FDA’s extension of its review in June to late October had already been a setback as investors had expected it to render a decision on the experimental drug by July 29.

Bank of America Merrill Lynch analysts said in a note that the timing of the advisory committee meeting suggested a three to four month delay in the approval.

DNB Markets analyst Rune Dahl said in a note to clients the delay would likely postpone U.S. approval until early 2013, but that degludec, known also by its brand name Tresiba, could be approved in the Europe Union and Japan before then.

Novo submitted the new drug applications to the FDA on September 29.

SANOFI SHARES HIGHER

Shares in Novo, which have outperformed the market by gaining 34 percent this year, fell 0.9 percent to 885 crowns by 1320 GMT (11.20 a.m EDT) on a flat Copenhagen bourse. Sanofi shares traded up more than 2 percent at 62.25 in Paris.

“The question now is if some analysts will have to take down their 2013 estimates,” DNB’s Dahl said. “If so, it’s going to be very limited.”

Dahl said it was hard to quantify the benefit to Sanofi from the degludec delay, but Sanofi’s shares were getting a lift from the news.

Competition is heating up in the multibillion-dollar market for long-lasting insulins. Novo hopes degludec can trump Lantus, while Eli Lilly is also developing a rival drug that is a few years behind.

Worldwide, Lantus has some 80 percent of the market for long-acting, or basal, insulins and the product had sales of around $5 billion last year. Dahl said he still expected global peak sales of degludec to reach that figure.

Ending Sanofi’s 10-year dominance would be a coup for Novo, whose long-acting insulin Levemir has failed to dent seriously the French drugmaker’s grip on the market.

Type 2 diabetes, which is linked to obesity, is growing rapidly around the world, making the sector a major target for drug company investment, as highlighted most recently by a deal between Bristol-Myers Squibb and AstraZeneca to share the $7 billion cost of buying U.S. diabetes specialist Amylin Pharmaceuticals.

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(Reuters)