Sizing Up the Opportunities in the Diabetes MarketBy
Diabetes spending growth is projected to exceed 10% in both developed and emerging markets over the next five years, driven by innovative new therapies and greater diagnosis rates.
The diabetes market is projected to see a major influx of new technologies and innovations seeking to improve prevention, screening, diagnosis, and treatment adherence for both Type I and Type II diabetes. So where do the market opportunities reside and which companies are expected to reap the benefits? DCAT Value Chain Insights (VCI) takes an inside look.
Diabetes is an important market sector for the global pharmaceutical industry. By 2018, treatments for diabetes are projected to represent the second largest therapeutic area in developed markets and the fifth largest market sector in pharmerging markets, a term used by IMS Health to denote emerging pharmaceutical markets, according to information from the IMS Institute for Healthcare Informatics. For purposes of the analysis, developed markets, as defined by IMS, are the US, Japan, Germany, France, Italy, Spain, the UK, Canada, and South Korea, and the pharmerging markets are China, Brazil, Russia, India, Algeria, Argentina, Colombia, Egypt, Indonesia, Mexico, Nigeria, Pakistan, Poland, Romania, Saudia Arabia, South Africa, Thailand, Turkey, Ukraine, Venezuela, and Vietnam. In 2018, spending on diabetes drugs in developed markets is projected at between $61 billion and $71 billion, representing a compound annual growth rate (CAGR) of 12% to 15% for the forecast period of 2014-2018, according to IMS. In pharmerging markets, spending on diabetes drugs is expected to reach between $11 billion to $13 billion by 2018 with a CAGR of 10% to 13% in the forecast period of 2014-2018.
In 2014, spending on diabetes drugs in developed markets is expected to reach $42 billion, up from $35 billion in 2013 and is projected reach $66 billion in 2018, according to IMS. Spending growth in 2014 is driven by rising prices for modern insulins in the US although this does not reflect the effect of off-invoice discounts and rebates that may offset these price increases. In developed markets, newer therapies, such as glucagon-like peptide-1 (GLP-1) antagonists, dipeptidyl peptidase-4 (DPP-4) inhibitors, and sodium-glucose cotransporter 2 (SGLT2) inhibitors, will continue to drive growth. Another component impacting the market will be the coming wave of biosimilar insulins. In pharmerging markets, spending on diabetes drugs was $7 billion in 2013 and is projected to reach $8 billion in 2014 and $12 billion in 2018, according to IMS. The 10-13% spending growth in pharmerging markets during the forecast period of 2014-2018 is largely attributed to the rising incidence and diagnosis rates, which have lead to greater insulin and meformin use although adoption of newer therapies has been slower.
Major highlights from 2014
Given the market potential of the diabetes sector, pharmaceutical companies have been advancing development and commercialization of new diabetes drugs as well as new formulations, combination therapies, and new indications to expand markets for existing diabetes drugs. Several key developments have occurred thus far in 2014.
Earlier this year, AstraZeneca received US Food and Drug Administration (FDA) approval for its diabetes drug, Farxiga (dapaglifozin). Farxiga was approved by the FDA in January 2014. It was approved in Europe, where it is marketed as Forxiga, in November 2012 and in Japan in March 2014. Farxiga was the second SGLT2 inhibitor approved by the FDA. The first was Janssen Pharmaceuticals’ Invokana (canagliflozin), which was approved in 2013. As a SGLT2 inhibitor, Farxiga blocks the reabsorption of glucose by the kidney, increases glucose excretion, and lowers blood glucose levels. It is indicated as an adjunct to diet and exercise as a once-daily oral medication to improve glycemic control in adult patients with Type 2 diabetes mellitus as an add-on combination therapy or as monotherapy in metformin-intolerant patients.
AstraZeneca gained full rights to Farxiga as part of its $2.7-billion acquisition of its diabetes alliance with Bristol-Myers Squibb, a deal which was completed in February 2014. The acquisition gave AstraZeneca ownership of the intellectual property and global rights for the development, manufacture, and commercialization of the diabetes business, which included Farxiga/Forxiga, Xigduo (dapaglifozin and metformin HCl extended release), Onglyza (saxagliptin), Komboglyze (saxagliptin and metformin HCl), Kombiglyze XR (saxagliptin and Byetta (exenatide), Bydureon (exenatide extended-release for injectable suspension), metreleptin, and Symlin (pramlintide acetate). In addition to the $2.7-billion, AstraZeneca also agreed to pay up to $1.4 billion in regulatory, launch, and sales payments, and various sales-related royalty payments up until 2025, $600 million of which relates to the approval of Farxiga in the US. In addition, AstraZeneca may make payments of up to $225 million when certain assets are subsequently transferred.
AstraZeneca also received FDA approval for once-daily Xigduo XR (dapagliflozin and metformin hydrochloride extended-release) for the treatment of adults with Type 2 diabetes. Xigduo XR combines two anti-hyperglycaemic agents with complementary mechanisms of action, dapagliflozin (trade name in the US, Farxiga), a SGLT2 inhibitor, and metformin hydrochloride (HCl) extended-release, a biguanide, in a once-daily oral tablet. Xigduo XR is already approved in Australia for the treatment of adults with Type 2 diabetes, along with diet and exercise. Xigduo (dapagliflozin and metformin hydrochloride), which uses an immediate-release form of metformin, is approved in the European Union (EU).
In other noteworthy developments, Boehringer Ingelheim and Eli Lilly received approval of their SGLT2 inhibitor, empagliflozin, in August 2014. The drug was developed as part of the diabetes alliance between Boehringer Ingelheim and Eli Lilly, which was formed in 2011. To date, three new treatments for diabetes have been launched by the alliance: Trajenta (linagliptin), Jardiance (empagliflozin), and Jentadueto (linagliptin/metformin HCI). Additionally, the alliance’s new insulin glargine product has been tentatively approved in the US and approved in Europe. The new insulin glargine product from Eli Lilly and Boehringer Ingelheim is the first biosimilar insulin recommended for approval in the EU, according to the companies. Eli Lilly/Boehringer Ingelheim’s insulin glargine is a basal insulin, which is intended to provide long-lasting blood-sugar control between meals and at night. It has the same amino acid sequence as Sanofi’s Lantus (insulin glargine) and was filed through the European Medicines Agency (EMA)’s biosimilar pathway. As the term is a regulatory designation, the companies’ insulin glargine is considered a biosimilar in some regions, including Europe, but not in others, including the United States.
Other potential treatments being developed from the alliance between Boehringer Ingelheim and Eli Lilly include fixed-dose combinations, which includes an investigational combination tablet of empagliflozin and linagliptin for the treatment of adults with Type 2 diabetes. If granted approval by the FDA, the combination would provide the mechanisms of action of a SGLT2 inhibitor (empagliflozin) and a DPP-4 inhibitor (linagliptin). SGLT2 inhibitors remove excess glucose through the urine by blocking glucose re-absorption in the kidney. DPP-4 inhibitors work by increasing hormones that stimulate the pancreas to produce more insulin and stimulate the liver to produce less glucose. Boehringer Ingelheim’s linagliptin, marketed as Tradjenta, was approved by FDA in 2011, and is a once-daily, 5-mg tablet used along with diet and exercise to improve glycemic control in adults with Type II diabetes. Separately, earlier this year, Eli Lilly received approval from the FDA for Trulicity (dulaglutide), an once-weekly, GLP-1 receptor agonist, indicated as an adjunct to diet and exercise to improve glycemic control in adults with Type 2 diabetes. It acts like GLP-1, a natural hormone, helping the body release its own insulin when patients eat. The drug is also under review by the EMA and other regulatory bodies.
In other new drug approvals for 2014, GlaxoSmithKline (GSK) received FDA approval for its diabetes drug, Tanzeum (albiglutide), in April 2014. Albiglutide, a GLP-1 receptor agonist, is a biological product for treating Type 2 diabetes, administered once-weekly using an injector pen. It is a recombinant fusion protein comprised of two tandem copies of modified human GLP-1 genetically fused in tandem to human albumin. Glucagon-like peptide-1 is an important incretin hormone that helps reduce blood glucose levels, but, in people with Type 2 diabetes, its production is often reduced or absent, according to a GSK press release. Albiglutide was approved by the EMA in March 2014 under the brand name Eperzan.
In gaining approval for Tanzeum, GSK will be competing against other GLP-1 agonists: AstraZeneca’s Byetta (exenatide injection) and Bydureon (exenatide extended-release injectable suspension) and Novo Nordisk’s Victoza (liraglutide). Sanofi’s Lyxumia (lixisenatide) was in-licensed from Zealand Pharma A/S and is approved in Europe for the treatment of adults with Type 2 diabetes mellitus to achieve glycemic control in combination with oral glucose-lowering medicinal products and/or basal insulin when these, together with diet and exercise, do not provide adequate glycemic control. Lyxumia is also approved in Mexico, Australia, Japan, and Brazil for the treatment of adults with Type 2 diabetes. Sanofi plans to resubmit the new drug application for lixisenatide in the United States in 2015 after completion of a clinical cardiovascular outcomes study.
In terms of the pipeline, other pharmaceutical companies have late-stage SGLT2 inhibitors in development. Pfizer and Merck & Co. are developing their SGLT2 inhibitor, ertugliflozin, which is in Phase III trials. In April 2013, Pfizer and Merck formed a collaboration for the development and commercialization of Pfizer’s ertugliflozin. The companies are collaborating on the clinical development and commercialization of ertugliflozin and ertugliflozin-containing fixed-dose combinations with metformin and Merck’s Januvia (sitagliptin) tablets. Merck will continue to retain the rights to its existing portfolio of sitagliptin-containing products. Pfizer received an upfront payment and milestones of $60 million and will be eligible for additional payments associated with the achievement of pre-specified future clinical, regulatory, and commercial milestones. Merck and Pfizer will share potential revenues and certain costs on a 60/40% basis.
In January 2014, Astellas Pharma received marketing approval in Japan for its SGLT2 inhibitor Suglat (ipragliflozin L-proline). In April 2014, the Japanese pharmaceutical company Taisho Pharmaceutical received manufacturing and marketing approval in Japan for its SGLT2 inhibitor Lusefi (luseogliflozin) for treating Type II diabetes. Among smaller companies, Islet Sciences, a biopharmaceutical company based in Raleigh, North Carolina, announced a letter of intent to acquire BHV Pharma, based in Research Triangle Park, North Carolina, which is developing the SGLT2 inhibitor remogliflozin etabonate for the treatment of Type II diabetes. Lexicon Pharmaceuticals, Inc., based in Princeton, New Jersey, has an SGLT2 inhibitor, LX4211, in Phase II clinical trials.
Merck & Co. has submitted a new drug application for omarigliptin, its investigational once-weekly DPP-4 inhibitor for the treatment of Type 2 diabetes, to the Japanese Pharmaceuticals and Medical Devices Agency. Japan is the first country with a regulatory filing for omarigliptin. Worldwide, Merck is supporting omarigliptin with a clinical development program that includes nine Phase III clinical trials involving approximately 7,500 patients with Type 2 diabetes in support of planned regulatory filings.
Eli Lilly plans to file for marketing authorization with the FDA and the EMA for a new basal insulin, insulin peglispro, by the end of the first quarter of 2015. Basal insulins include intermediate-acting and longer-acting insulins. These start lowering blood sugar more slowly and last longer than faster-acting insulins. Lilly announced the decision following favorable Phase III results in treating Type I and Type II diabetes in lowering hemoglobin A1c compared with insulin glargine, the active ingredient in Sanofi’s basal insulin product, Lantus. Lantus is Sanofi’s top-selling drug with 2013 revenues of EUR 5.7 billion ($7.4 billion). Also, Sanofi submitted Toujeo (insulin glargine [rDNA origin] injection), an investigational drug for regulatory review in the US and EU.
Sanofi is also seeking to advance Affreza (human insulin inhalation powder). In August 2014, Sanofi formed a potential $925-million licensing agreement between with MannKind Corporation, a Valencia, California-based biopharmaceutical company, for the development and commercialization of Afrezza, a new rapid-acting inhaled insulin therapy for adults with Type 1 and Type 2 diabetes. The companies plan to launch Afrezza in the United States in the first quarter of 2015. Under the agreement, MannKind received an upfront payment of $150 million and potential milestone payments of up to $775 million. The milestone payments are dependent upon specific regulatory and development targets as well as sales thresholds. Sanofi and MannKind will share profits and losses on a global basis, with Sanofi retaining 65% and MannKind receiving 35%. Under the agreement, Sanofi will be responsible for global commercial, regulatory, and development activities. Under a separate supply agreement, MannKind will manufacture Afrezza at its manufacturing facility in Danbury, Connecticut. In addition, the companies are planning to collaborate to expand manufacturing capacity to meet global demand as necessary. MannKind received FDA approval of Afrezza in June 2014 to improve glycemic control in adult patients with diabetes mellitus. The product consists of Afrezza inhalation powder delivered using a small inhaler.
In terms of new combinations, formulations, or new indications, Novo Nordisk received marketing approval from the European Commission for Xultophy for the treatment of Type 2 diabetes mellitus in adults. Xultophy is an once-daily, single-injection combination product consisting of Novo Nordisk’s Tresiba (insulin degludec), a once-daily basal insulin analog, and Novo Nordisk’s Victoza (liraglutide), an once-daily human GLP-1 analog. Diabetes care is the largest product franchise for Novo Nordisk with 2013 revenues of DKK 65.5 billion ($11.3 billion). Of that total, insulins and protein-related therapeutics accounted for DKK 51.6 billion ($8.9 billion). Victoza had 2013 sales of DKK 11.6 billion ($2.0 billion). On an industry level, the GLP-segment of the diabetes market represented approximately 6.9% of the diabetes market in 2013, according to estimates by Novo Nordisk.
Also, in 2014, the Committee for Medicinal Products for Human Use (CHMP) of the EMA issued a positive opinion for the use of Novo Nordisk’s Victoza (liraglutide) in adults with Type 2 diabetes and moderate renal impairment. Once the European Commission approves the label expansion, physicians in the EU will be able to prescribe Victoza, a once-daily human GLP-1analog, to adults with Type 2 diabetes and moderate renal impairment without dose adjustments.Victoza is a GLP-1 analog with an amino-acid sequence 97% similar to endogenous human GLP-1. Like natural GLP-1, Victoza works by stimulating the beta cells to release insulin and suppressing glucagon secretion from the alpha cells only when blood sugar levels are high. Due to this glucose-dependent mechanism of action, Victoza is associated with a low rate of hypoglycemia. In addition, Victoza reduces body weight and body fat mass through mechanisms involving reduced appetite and lowered food intake. Victoza was launched in the EU in 2009 and is commercially available in more than 70 countries. In Europe, Victoza is indicated for treatment of adults with Type 2 diabetes to achieve glycemic control in combination with oral glucose-lowering medicinal products and/or basal insulin when these, together with diet and exercise, do not provide adequate glycemic control. In the US, Victoza was approved in January 2010 as an adjunct to diet and exercise to improve blood glucose control in adults with Type 2 diabetes.
Drug devices also play an important part for companies in positioning in the diabetes market, which in turn, has engendered partnerships among the major pharmaceutical companies. For example, Novo Nordisk launched NovoRapid PumpCart, a prefilled pump cartridge with an insulin analog that has been specifically designed for insulin pumps. This new treatment solution, which contains NovoRapid (insulin aspart), a rapid-acting insulin from Novo Nordisk, is expected to make insulin pump therapy more convenient for people with diabetes and their care staff. The 1.6-mL cartridge was developed in a non-exclusive partnership between Roche Diabetes Care and Novo Nordisk and is compatible with the new Accu-Chek Insight insulin pump therapy system from Roche Diabetes Care. NovoRapid PumpCart was launched in the UK, Sweden, and Austria and will be made available in more European countries throughout 2015 and 2016. The Accu-Chek Insight insulin pump therapy system was launched in Austria in the first half of this year and is currently being launched in the UK with other European markets following throughout 2015.
In other developments, Sanofi and Takeda Pharmaceutical have agreed to start formulation development studies of a fixed dose combination of tofogliflozin (product name: Apleway) and alogliptin (product name: Nesina). Tofogliflozin is an orally active small-molecule SGLT2 inhibitor, developed by Chugai Pharmaceutical for the treatment of Type 2 diabetes mellitus and subsequently licensed by Sanofi K.K. and Kowa. Tofogliflozin received its first global approval for this indication in Japan as either a monotherapy or in combination with other anti-hyperglcaemic agents. Nesina is a DPP-4 inhibitor for treating Type II diabetes. It was created by Takeda San Diego, Inc., Takeda’s wholly owned subsidiary located in San Diego, California, and received approval by the FDA in 2013. Late last month, Merck & Co. submitted a new drug application for omarigliptin, its investigational once-weekly DPP-4 inhibitor for the treatment of Type 2 diabetes, to the Japanese Pharmaceuticals and Medical Devices Agency. Japan is the first country with a regulatory filing for omarigliptin. Worldwide, Merck is supporting omarigliptin with a clinical development program that includes nine Phase III clinical trials involving approximately 7,500 patients with Type 2 diabetes in support of planned regulatory filings.