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The Pulse of the Pharmaceutical Industry

A sweet spot to be in, 2013

Written by: | | Dated: Tuesday, October 1st, 2013

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For Novo Nordisk in 2012, laser-focused strategy paid off once again with double-digit growth, despite the continuing difficulties in the world economy. Med Ad News’ Company of the Year had sales growth of almost 18 percent in 2012, and for the first half of 2013, sales grew 11 percent. Net income in 2012 increased 16 percent. Analysts at EvaluatePharma predict that the company’s sales will grow at a compound annual growth rate of 8 percent to 2018. With its focus on treating diabetes, and with the incidence of diabetes continuing to rise in the developed and developing markets, Novo Nordisk is poised for continuing success.

Novo Nordisk’s history in diabetes treatment is deep. It was in 1923 that the first patients were treated with insulin from the company that is now Novo Nordisk, and insulin remains the company’s main product. According to CEO Lars Rebien Sørensen, because insulin and other protein-based medicines are fundamentally different from traditional chemical medicines, the company’s researchers can always find ways to make them even better. Additionally, “although we have good reason to be proud of what we have achieved with Novo Nordisk in recent years, we owe a lot to our predecessors, who laid the foundation for what we are doing today,” he says.

Novo Nordisk is striving to make sure innovative treatments continue to be available for diabetes, and executives argue that government-imposed price reductions can harm innovation. “We are often facing situations where governments are demanding price reductions that we consider unacceptable or implementing measures to limit new products’ access to the market,” Sørensen says. “It puts us in a moral dilemma. On the one hand, we want to continue supplying our best products to customers around the world; on the other hand, we cannot sell our newest products at the old products’ prices. If we do that, we start to erode the whole innovation model that created the products in the first place. Then we deny all the 371 million people who have diabetes the possibility of future, better treatments and, ultimately, a cure for their disease.”

The solution, executives believe, is rethinking the approach to managing diabetes and other chronic diseases to ensure more sustainable healthcare solutions.

The company will continue to invest in its current products and its new-generation insulins, spending 14 percent to 15 percent of its sales on research and development of new, innovative products. Sørensen says this will address unmet medical needs and help secure Novo Nordisk’s long-term development. The company will also continue investing in advocacy and activities in support of people with diabetes and hemophilia.

“All of these investments serve one purpose: To help patients live better lives,” Sørensen says. “That is what drives us. We know there are millions of people with diabetes who could be living their lives in full if only they got the necessary medical treatment and care, and we are determined to contribute to closing that gap. We have set an ambition that by 2020 we will provide medical treatment to an estimated 40 million patients.”

Novo Nordisk continued to expand its leadership team in 2012. Two new members were added to the executive management team: Lars Fruergaard Jørgensen, responsible for IT, Quality & Corporate Development, and Jakob Riis, head of Marketing & Medical Affairs. Additionally, four corporate VPs in Novo Nordisk Inc., the company’s U.S. affiliate, were promoted to senior VPs and members of the company’s global senior management board. According to Sørensen, the promotions reflect the increasing size, complexity, and strategic importance of Novo Nordisk’s U.S. business and development pipeline.

In August 2013, Jesper Høiland was appointed as president of Novo Nordisk Inc. The appointment became effective Aug. 1, 2013. Mr. Høiland was previously Novo Nordisk’s head of International Operations where he oversaw all of the company’s operations outside of Europe, China, Japan, Korea and North America. He replaces Jerzy Gruhn, who served in the role since 2008. Gruhn has been appointed to lead the company’s European business. In the first six months of 2013, the North American region accounted for 46% of total Novo Nordisk reported sales.

“This position is a great opportunity to lead an organization that is both driving the growth of our business and helping solve one of the most pressing health challenges facing the United States,” Høiland says. “Novo Nordisk must play a vital role in addressing America’s diabetes crisis not only through the treatments we develop, but also by engaging with patients, caregivers, physicians, policy makers, and communities to help prevent diabetes and improve treatment across the board.”

Company and product performance

Despite the difficult economic climate, Novo Nordisk was able to grow sales in 2012 by 12 percent measured in local currencies, to DKK 70.03 billion ($13.47 billion). Company leaders attributed the increase to continued strong demand for some key products. As in 2011, the products behind much of the 2012 growth were the once-daily human GLP-1 analogue Victoza and two modern insulins, NovoLog/NovoRapid and Levemir. Victoza’s 2012 sales were DKK 9.5 billion ($1.64 billion), 58.5 percent more than during 2011. NovoLog/NovoRapid generated sales of DKK 15.69 billion ($2.71 billion) in 2012, 22 percent more than in 2011. Sales of Levemir in 2012 were DKK 9.79 billion ($1.69 billion), 27.4 percent more than in 2011. Another modern insulin, NovoLog Mix/NovoMix, generated DKK 9.34 billion ($1.61 billion) in sales last year, advancing nearly 13 percent compared to its 2011 result.

Sales of NovoSeven, the company’s hemophilia treatment, were DKK 8.93 billion ($1.54 billion) in 2012, 7 percent more than in 2011. Sales in 2012 of the growth hormone Norditropin were DKK 5.8 billion ($984 million), 13 percent more than in 2011.

The company’s 2012 sales for its oral antidiabetic products were DKK 2.76 billion ($476 million) in 2012, an increase of 7 percent from 2011. Sales of hormone replacement therapy products in 2012 were DKK 2.16 billion ($373 million), rising more than 5 percent year-over-year.

In the first half 2013, Novo Nordisk’s total sales reached DKK 41.36 billion ($7.14 billion), 11.1 percent more than in the same period of 2012. Executives attributed the growth to sales of modern insulins and Victoza.

NovoRapid/NovoLog notched sales of DKK 8.3 billion ($1.43 billion) in first-half 2013, 13 percent more than the same period last year. First-half 2013 Victoza sales totaled DKK 5.56 billion ($959 million), 30 percent more than in the first half of 2012. Levemir’s first-half 2013 sales amounted to DKK 5.43 billion ($938 million), 17 percent more than in the same period last year. NovoLog Mix/NovoMix produced DKK 4.88 billion ($843 million) in January-June 2013, up 12 percent in local currencies.

NovoSeven sales in the first six months of 2013 were DKK 4.57 billion ($789 million), 5 percent more than in the first half of 2012. Norditropin sales during the 2013 first-half period came in at DKK 3.02 billion ($521 million), 8 percent more than in first-half 2012.

Sales of oral antidiabetic products during the first half of 2013 amounted to DKK 1.38 billion ($237 million), about the same as in first-half 2012. Sales of hormone replacement therapy products produced DKK 1.38 billion ($238 million), the same as first-half 2012.

In 2012, North America was again the main contributor to the company’s growth, followed by International Operations and Region China. Novo Nordisk expects to see most of its future growth from these regions.

North America accounted for DKK 34.22 billion ($5.91 billion) in 2012 sales, 44 percent of the company total and exhibiting 29 percent growth from 2011. Sales in Europe were DKK 19.71 billion ($3.4 billion), 3 percent more than in 2011 and 25 percent of the total. Sales in International Operations amounted to DKK 11.08 billion ($1.91 billion), growth of 18 percent and representing 14 percent of total sales. Japan and Korea sales in 2012 reached DKK 6.62 billion ($1.14 billion), 8.5 percent of total sales and growth of 6 percent. Region China sales were reported at DKK 6.4 billion ($1.11 billion), 28 percent more than in 2011 and 8.2 percent of sales.

During the first half of 2013, North America sales totaled DKK 19.05 billion ($3.29 billion), 23 percent more than in first-half 2012. Europe sales were DKK 9.88 billion ($1.71 billion), 2 percent more than in the same period of 2012. International Operations sales came to DKK 6.17 billion ($1.07 billion), an increase of 17 percent from the first half of 2012. Japan and Korea sales were DKK 2.61 billion ($450 million), a decrease of 3 percent from first-half 2012. First-half 2013 sales for Region China were DKK 3.65 billion ($631 million), 15 percent more than in the same period in 2012.

For 2013, Novo Nordisk executives say they expect sales growth, in local currencies, of between 11 percent and 13 percent. This reflects expectations for continued robust penetration for the portfolio of modern insulins, a continued steady Victoza performance, and a modest sales contribution from Tresiba, a long-acting insulin that has been launched outside the United States. These sales drivers are partly expected to be countered by generic competition to oral antidiabetic products, an impact from the challenging pricing environments in a number of major markets, intensifying competition within diabetes care as well as biopharmaceuticals, and the macroeconomic conditions in a number of markets in International Operations.

Pipeline progress

With a strong focus in internal R&D, Novo Nordisk continues to expand its pipeline of diabetes products as well as explore other areas such as inflammation. In 2013 alone, more than 28,000 people are expected to participate in Novo Nordisk-sponsored clinical trials.

Several products in the development pipeline have passed important milestones. However, almost all attention from investors and the media was on the company’s new generation of insulins, Tresiba and Ryzodeg. Both products were approved in Japan during 2012 and in the EU in January 2013. In the United States, Canada, Switzerland, and other countries, the approval process is under way.

The company has encountered difficulties in getting Tresiba approved in the United States. In February 2013, Novo Nordisk announced that it received a complete response letter from FDA regarding the new drug applications for Tresiba, comprising insulin degludec, and Ryzodeg, composed of insulin degludec/insulin aspart. In the letter, FDA requested additional cardiovascular data from a dedicated cardiovascular outcomes trial before the review of the new drug applications can be completed. IFDA also stated that approvals for Tresiba and Ryzodeg cannot be granted until the violations in a warning letter, announced in December 2012, have been resolved. The warning letter is related to a current good manufacturing practice inspection of a filling plant in Bagsværd, Denmark. The company submitted its response to the warning letter Dec. 28, 2012.

In September 2013, Novo Nordisk announced that recruitment for the LEADER (Liraglutide Effect and Action in Diabetes: Evaluation of Cardiovascular Outcome Results) trial assessing cardiovascular outcomes of Victoza –completed in April 2012 – resulted in a high-risk population with patient numbers exceeding the original target. The baseline patient characteristics were presented at the annual meeting of the European Association for the Study of Diabetes (EASD) in Barcelona, Spain.

LEADER is a major, worldwide Phase IIIb study focusing on patient safety with Victoza as a treatment for type 2 diabetes mellitus. The long-term, double-blind trial has been designed to assess the cardiovascular outcomes of Victoza compared to placebo, both in addition to current standard of care for type 2 diabetes. It is the largest and longest clinical trial in Novo Nordisk’s history with data from more than 17,000 patient years of exposure collected.

The company presented new data at EASD showing that the majority of type 2 diabetes patients receiving Tresiba plus metformin were able to maintain good glycemic control for 2.5 years. Specifically, 80.5 percent of those patients who were in good glycemic control after two years with Tresiba plus metformin maintained HbA1c below 7 percent when continuing treatment with Tresiba and metformin only, in a further 26-week add-on study. The data also confirm the durability and efficacy of Tresiba and furthermore demonstrates that the addition of Victoza is highly effective in helping patients achieve their glycemic targets.

Novo Nordisk has received feedback from FDA in the United States on the clinical trial protocol for the cardiovascular outcomes trial for Tresiba. The feedback from the agency confirmed the expectations announced by Novo Nordisk in May 2013 with regard to the trial design.

The trial will be double-blind, use insulin glargine as the comparator, and include around 7,500 patients. The basis for re-submission of the new drug application is expected to be an interim analysis of major adverse cardiovascular events in the trial. Novo Nordisk will continue the trial in order to make a definitive assessment of the cardiovascular safety of Tresiba. Following receipt of the feedback from FDA, Novo Nordisk has submitted the clinical trial application in the United States. The clinical trial is now expected to be initiated towards the end of 2013. Data to support the interim analysis is still expected to be available between two to three years after trial initiation.

In June 2013, Novo Nordisk initiated a global 26-week, randomized, open-label, Phase III trial comparing the efficacy and safety of Tresiba and insulin glargine in approximately 800 people with type 2 diabetes. The trial will include patients from China and is expected to provide the basis for a regulatory submission with the Chinese Food and Drug Administration.

Other progress in the pipeline is the completion of the Phase III trial for IDegLira, a fixed-ratio combination of liraglutide and insulin degludec for the treatment of patients with type 2 diabetes. In May 2013, Novo Nordisk submitted to the European Medicines Agency the marketing authorization application for the approval of IDegLira in the European Union and Switzerland.

The regulatory filing of IDegLira is based on results from the DUAL clinical trial programs that involved around 2,000 people with type 2 diabetes, together with the extensive clinical data generated in the development programs of Tresiba and Victoza. Since the announcement in May, IDegLira has been filed for approval in Switzerland.

At the June 2013 American Diabetes Association meeting in Chicago, Novo Nordisk presented results from the company’s diabetes research and development activities in 50 accepted abstracts, including three oral presentations and two late-breaking abstracts. Among the key presentations was an oral presentation of the Phase III trial DUAL I with IDegLira, which included more than 1,600 patients with type 2 diabetes.

In the trial, people treated with IDegLira achieved an average HbA1c reduction of 1.9 percent and 81 percent of the people treated with IDegLira achieved the ADA and the European Association for the Study of Diabetes (EASD) HbA1c treatment target of 7 percent. People treated with IDegLira experienced a low rate of hypoglycemia and achieved a reduction in weight.

In December 2012, Novo Nordisk selected for Phase III development a new formulation of insulin aspart, called FIAsp, with a faster onset of appearance than NovoLog/NovoRapid. The new form should enable more flexible insulin administration in connection with meals, as well as improved blood sugar control after meals.

Within the area of hemophilia, the company filed turoctocog alfa for approval in the European Union, United States, and other markets. Turoctocog alfa is a recombinant factor VIII product for the treatment of hemophilia A.

In September 2013, the company announced that the Committee for Medicinal Products for Human Use under the European Medicines Agency adopted a positive opinion on turoctocog alfa, with the intended brand name NovoEight. The committee recommended marketing authorization for NovoEight for the treatment and prophylaxis of bleeding in patients with hemophilia A.

NovoEight is a recombinant coagulation factor VIII. Based on advanced protein and purification technology, NovoEight has been designed for reliability, safety and portability for people with hemophilia A.

“We are very excited to be able to offer people with hemophilia in Europe an alternative recombinant FVIII treatment,” says Mads Krogsgaard Thomsen, executive VP and chief science officer at Novo Nordisk. “The positive opinion for NovoEight is a significant step forward for us in our continued commitment to hemophilia.”

Novo Nordisk expects to receive the final marketing authorization from the European Commission within the coming months. Following the commission’s approval, Novo Nordisk expects to launch NovoEight in Europe during early 2014.

Novo Nordisk launched NovoThirteen, a recombinant factor XIII product for the treatment of a rare bleeding disorder, in the European Union and Canada, where it is marketed as Tretten.

The company had to discontinue vactreptacog alfa, an analogue of recombinant factor VIIa, due to safety concerns.

The SCALE Phase IIIa program for liraglutide 3 mg (NN8022) for obesity has been successfully completed. In the SCALE program, liraglutide 3 mg in combination with diet and exercise has consistently demonstrated, when compared to placebo, a clinically relevant larger weight loss and improvements in obesity-related risk factors, including blood glucose, blood pressure, cardiovascular risk biomarkers, lipids and patient-reported quality of life.

In May 2013, Novo Nordisk announced the headline results of the third trial in the SCALE program, SCALE–Obesity and Pre-diabetes, which included more than 3,500 people without diabetes who were obese, or overweight with comorbidities.

In this trial, people treated with liraglutide 3 mg achieved an average weight loss of 8 percent after 56 weeks of treatment compared to the 2.6 percent weight loss achieved by people treated with placebo. The proportion of people achieving a weight loss of at least 5 percent was 64 percent for liraglutide 3 mg and 27 percent for placebo. The proportion of people achieving a weight loss of at least 10 percent was 33 percent for liraglutide 3 mg and 10 percent for placebo treatment.

Novo Nordisk has completed the fourth and final trial in the SCALE program, SCALE – Sleep Apnea. This 32-week trial investigated the effect of liraglutide 3 mg and placebo in combination with lifestyle intervention on the severity of sleep apnea in 350 obese people with obstructive sleep apnea. Obstructive sleep apnea is commonly associated with obesity and is characterized by decreased or total arrest in airflow during breathing when asleep. Obstructive sleep apnea is commonly assessed using the apnea-hypopnea index (AHI) measuring obstructed breathing events per hour.

In the trial, from a mean baseline index number of 49 on the AHI index – equal to severe obstructive sleep apnea – people treated with liraglutide 3 mg experienced an improvement of 12 index points compared with 6 index points for those treated with placebo after 32 weeks of treatment. The difference was statistically significant and the trial met its primary endpoint.

In spite of its relatively short duration, the study further confirmed the weight loss efficacy of liraglutide 3 mg. From a baseline weight of 117 and 119 kg, respectively, people treated with liraglutide 3 mg and placebo achieved an average weight loss at 32 weeks of 5.7 percent and 1.6 percent.

Knowing their patients

Novo Nordisk has made efforts to better understand the patients that the company serves. In June, Novo Nordisk presented results from the global study DAWN2 (Diabetes Attitudes, Wishes, and Needs), a global Novo Nordisk initiative conducted in collaboration with the International Diabetes Federation, the International Alliance of Patient Organizations, the Steno Diabetes Center, and a range of other national, regional and global partners. The study represents opinions from more than 15,000 people living with, or caring for, people with diabetes in 17 countries across four continents.

The results show one in five with diabetes feel discriminated against because of their condition and perceive support from the broader community as scarce.

One in five family members also believes their relatives with diabetes face discrimination.

Among diabetes healthcare professionals, one out of three are concerned about discrimination and expressed a “major need” for improvement in the acceptance of people with diabetes as equal members in society.

“Evidence suggests that even with the best modern therapies and care, the experience of discrimination can influence self-management, quality of life as well as clinical outcomes for people with chronic illnesses,” says Professor Mark Peyrot, principal investigator and chair of the International Publication Planning Committee (IPPC) overseeing DAWN2. “The DAWN2 study results highlight surprisingly high rates of perceived discrimination and allow for an in-depth understanding of the nature of this discrimination and the consequences it has for health and quality of life.”

The DAWN2 study found major variations between countries in perceived discrimination, ranging from approximately 11 percent to 28 percent for people with diabetes, and 10 percent to 40 percent for family members, suggesting that there are viable pathways for improvement and that countries can look to others for models to follow.

Additional DAWN2 study results released in June highlighted significant opportunities for improvement across countries in relation to care, education, psychosocial support and community support.

For example, 13.8 percent of people with diabetes had likely depression (ranging from approximately 8 percent in Mexico to 17 percent in the United States and 20 percent in Algeria).

About 44.6 percent of people with diabetes had high emotional distress related to diabetes (ranging from about 21 percent in the Netherlands and 22 percent in the United States to 65 percent in Algeria).

More than one third (35.3 percent) of family members reported a significant burden on the family related to diabetes (ranging from approximately 12 percent in Mexico and 25 percent in the United States to 60 percent in France).

Only 48.8 percent of people with diabetes had ever attended a diabetes education program/activity (ranging from about 23 percent in India to 74 percent in the United States and 83 percent in Canada).

Only around 23 percent of family members had ever attended a diabetes education program activity (ranging from approximately 12 percent in The Russian Federation to 31 percent in the United States and 40 percent in Denmark).

Initial results of the DAWN2 study were released in December 2012. These results, which focused on caretakers, found that 63 percent of family members are anxious about the possibility that the person they live with will develop serious complications from the condition; 66 percent of family members of insulin-treated people with diabetes fear that their loved one will become hypoglycemic during the night; 34 percent of family members report a negative financial impact on themselves due to the diabetes of their loved one; 20 percent of family members experience that their loved one is being discriminated against because of diabetes and that the community they live in is intolerant of diabetes; and 35 percent of people with diabetes report their family argues with them about how they manage their diabetes.

During April 2013, Novo Nordisk participated in the first-ever Diabetes Forum in Mexico City to address the critical diabetes challenge the country is facing. The forum gathered key Mexican opinion leaders within the health community and diabetes specialists to discuss sustainable solutions for the 16.4 million Mexicans expected to have diabetes by 2030. About 10.6 million Mexicans currently have diabetes, which corresponds to 15.5 percent of the adult population. Mexico is ranked sixth on the list of countries with the largest diabetes population.

The meeting was hosted by the Ministry of Health of the Government of Mexico City and the National Institute of Medical Sciences and Nutrition, Salvador Zubirán, in partnership with the Latin American Diabetes Association, the Mexican Diabetes Federation, the FIND (Diabetes Investigation Fund) and the Danish Embassy to Mexico. Novo Nordisk served as facilitator. Novo Nordisk established an office in Mexico City in 2004. In 2006, the company launched a number of ‘train-the-trainer’ programs for healthcare practitioners, nurses, and patients to promote better treatment outcomes for the growing diabetes population in Mexico.

Product sales and financial performance

NovoLog/NovoRapid $2,709 $2,211
Human insulins $1,951 $1,862
Levemir $1,690 $1,326
Victoza $1,639 $1,034
NovoLog Mix/ NovoMix $1,613 $1,429
NovoSeven $1,542 $1,441
Norditropin $984 $871
Oral antidiabetic products $476 $445
Protein-related products $434 $399
HRT $373 $355

All sales are in millions of dollars.

  2012 2011
Revenue $13,471 $11,454
Net Income $3,700 $2,952
EPS $6.71 $5.18
R&D $1,881 $1,662
  1H13 1H12
Revenue $7,141 $6,426
Net Income $2,195 $1,728
EPS $4.05 $3.11
R&D $927 $875

All figures are in millions of dollars except EPS.

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