The Potential and Challenges of the Diabetes Drug Market

Diabetes is the second largest therapeutic sector among developed countries, trailing only oncology. So how are the pharmaceutical majors seeking to capitalize?

Companies such as Sanofi, Eli Lilly and Company, Novo Nordisk, AstraZeneca, Boehringer Ingelheim, and others are advancing new drugs to this sector. So what are the leading products, recent approvals, pipeline candidates, and generic-drug entries? DCAT Value Chain Insights takes an inside look.

Inside the diabetes market.
On a therapeutic sector basis, diabetes is the second largest market in developed markets trailing only oncology, which is expected to remain the largest area of spend in developed markets (see Table I at end of article). Projected growth in the diabetes market is between 12% and 15% through 2019, according to IMS. Growth in pharmerging markets, defined by IMS as the most promising emerging market for pharmaceutical growth, is also good. Diabetes is projected to be the fifth largest market in pharmerging markets and is projected to experience double-digit growth through 2019 (see Table II at end of article).

Patient compliance is one important factor in future growth of drugs, devices, and monitoring systems used to treat diabetes. Despite improved diagnosis and advances in treatment options for individuals with Type 2 diabetes, sub-optimal therapy adherence and persistence result in significant economic and societal burden as well as avoidable patient complications in six diverse healthcare systems around the world, according to a new report series issued by the IMS Institute for Healthcare Informatics. Disease complications account for an estimated 61% to 80% of Type 2 diabetes-related costs in the countries studied, with 4% to 15% of costs linked to poor adherence and persistence. “Effective patient activation—how well people understand their role in the care process along with their ability and willingness to actively manage their own health and care—is key to deriving greater value from existing diabetes treatments,” concludes the report.

A roundup of activity
Given both the opportunities in the diabetes market as well as the need to overcome challenges in diabetes care, the pharmaceutical majors are advancing new drugs, devices, and systems for diabetes. Below are highlights of some recent activity to date in 2016.

AstraZeneca. In May 2016, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency issued a positive opinion, recommending the approval of AstraZeneca’s saxa/dapa (saxagliptin and dapagliflozin) tablets for the treatment of adults with Type-2 diabetes.

Saxa/dapa is a fixed-dose combination of saxagliptin and dapagliflozin being developed as a treatment for patients with Type-2 diabetes in adults aged 18 years and older. It is recommended to be indicated as a treatment to improve glycaemic control when metformin and/or sulfonylurea and one of the mono-components of saxa/dapa alone do not provide adequate glycaemic control, or when a patient is already being treated with the free combination of saxagliptin and dapagliflozin.

The CHMP’s positive opinion is now being reviewed by the European Commission (EC), which has the authority to approve medicines for the European Union (EU). The final decision by the EC is expected in the coming months and will be applicable to all 28 EU member countries plus Iceland, Norway, and Liechtenstein.

Boehringer Ingelheim and Eli Lilly and Company. Earlier this year, the US Food and Drug Administration (FDA) approved Eli Lilly’s and Boehringer Ingelheim’s Jentadueto XR (linagliptin and metformin hydrochloride extended-release) tablets for the treatment of Type 2 diabetes in adults. Jentadueto XR is the seventh new treatment from the Boehringer Ingelheim-Lilly Diabetes alliance to be approved by the FDA in the last five years. The companies formed the alliance in 2011.

Jentadueto XR combines 2.5 mg or 5 mg of linagliptin with 1000 mg of metformin. Linagliptin, a dipeptidyl peptidase-4 (DPP-4) inhibitor, works by increasing hormones that stimulate the pancreas to produce more insulin and the liver to produce less glucose. Metformin, a commonly prescribed initial treatment for Type II diabetes, lowers glucose production by the liver and its absorption in the intestine.

Also, earlier this year, a FDA advisory committee recommended that Eli Lilly and Company’s and Boehringer Ingelheim’s Jardiance (empagliflozin) be approved for the indication of reduceing cardiovascular (CV) death in adults with Type 2 diabetes and established CV disease. Jardiance, a sodium-glucose co-transporter 2 (SGLT2) inhibitor, was approved by the FDA in 2014 as an adjunct to diet and exercise to improve glycemic control in adults with Type 2 diabetes mellitus. Jardiance is part of the diabetes alliance formed between Eli Lilly and Boehringer Ingelheim in January 2011.

Diabetes is an important therapeutic sector for Lilly. Lilly’s R&D efforts in diabetes focus on differentiated therapeutics and delivery devices within three key areas of unmet need: glucose control, metabolic control, and end-organ protection. The company aims to combine its in-house diabetes R&D capabilities with an external network to deliver continued innovation in this area of therapy. The company has four main R&D centers involved in diabetes research: Indianapolis, Indiana (preclinical and clinical diabetes and complications); Lilly Biotech Center, San Diego (protein engineering and structural biology); Lilly Cambridge Innovation Center (delivery and device R&D); and Lilly China R&D Center, Shanghai, China (dedicated diabetes clinical research). Key external partnerships include its diabetes alliance with Boehringer Ingelheim as well as with other partners (Adocia, Transition Therapeutics, TVM Capital, Beta Bionics, Glycostasis, Yabao, Companion Medical, and others). In 2015, the company had $4 billion in global insulin revenue, showing its strength in this area.

GlaxoSmithKline. GlaxoSmithKline (GSK) is pursuing a new field of treatment, bioelectronics medicines, which it sees as potentially applicable to several diseases, including diabetes. Earlier this year, GSK signed an agreement with Verily Life Sciences LLC (formerly Google Life Sciences), an Alphabet company, to form Galvani Bioelectronics to enable the research, development, and commercialization of bioelectronic medicines. GSK will hold a 55% equity interest in the new jointly owned company and Verily will hold 45%. Galvani Bioelectronics will be headquartered in the UK, with the parent companies contributing existing intellectual property rights and an investment of up to £540 million ($721 million) over seven years, subject to successful completion of various discovery and development milestones.

Bioelectronic medicine is a relatively new scientific field that aims to tackle a wide range of chronic diseases using miniaturized, implantable devices that can modify electrical signals that pass along nerves in the body, including irregular or altered impulses that occur in many illnesses. GSK has been active in this field since 2012 and believes certain chronic conditions such as diabetes, arthritis, and asthma could potentially be treated using these devices.

Johnson & Johnson. In May 2016, the FDA approved Janssen Pharmaceuticals’ Invokamet, a fixed-dose combination therapy of the company’s Invokana (canagliflozin) and metformin hydrochloride, for first-line treatment of adults with Type 2 diabetes. Janssen is part of Johnson & Johnson.

Invokament is a combination of a the SGLT2 inhibitor, canagliflozin and metformin. It was previously approved by the FDA in August 2014 as an adjunct to diet and exercise to improve blood glucose control in adults with Type 2 diabetes not adequately controlled by either canagliflozin or metformin, or who are already being treated with both medications separately. This new approval allows Invokament to be prescribed in adults with Type 2 diabetes who are not already being treated with canagliflozin or metformin and may benefit from dual therapy.

Merck & Co. Earlier this year, the FDA accepted Merck & Co.’s new drug application (NDA) for MK-1293, an investigational follow-on biologic of insulin glargine, a long-acting insulin, for people with Type 1 and Type 2 diabetes being developed by Merck with partial funding from Samsung Bioepis, a joint venture between Samsung BioLogics and Biogen.

The drug will compete against Lantus (insulin glargine), Sanofi’s top-selling drug with 2015 global sales of EUR 6.390 billion ($7.103 billion), which is facing generic competition. Sanofi is repositioning itself with its next-generation insulin glargine, Toujeo, which gained marketing authorization in the three major markets (US, European Union, and Japan) in 2015 and is now approved in 20 countries overall. In 2015, the FDA approved Eli Lilly and Company’s Basaglar (insulin glargine injection) 100 units/mL. Basaglar is a long-acting insulin with an identical amino acid sequence to Lantus, another U-100 insulin glargine. Per Lilly’s settlement agreement with Sanofi, Basaglar became e available in the US starting on December 15, 2016. Basaglar is part of the Boehringer Ingelheim and Lilly diabetes alliance.

Novo Nordisk. In May 2016, the FDA recommend the approval of Novo Nordisk’s IDegLira for the treatment of adults with Type 2 diabetes. IDegLira is a once-daily, single injection fixed combination of insulin degludec (Tresiba), a once-daily new-generation basal insulin analogue, and liraglutide (Victoza), a once-daily GLP-1 analog, both products of Novo Nordisk. The company received approval of Tresiba alone in 2015.

The NDA for IDegLira was submitted to the FDA in September 2015 under the FDA’s Prescription Drug User Fee Act V (PDUFA V) regulation. In Europe, IDegLira was approved in September 2014 and is marketed under the brand name Xultophy.

Earlier this year, Novo Nordisk broke ground on its new $1.8-billion diabetes medicine production facility in Clayton, North Carolina. The facility will produce active pharmaceutical ingredients (API) for a range of Novo Nordisk’s current and future GLP-1 and insulin medicines. Once fully operational in 2020, the Clayton facility will ensure production capacity for diabetes medicines in the US for the decade ahead, according to the company. Once complete, the new facility will measure 833,000 square feet and have a footprint of 417,639 square feet. The new site is situated adjacent to Novo Nordisk’s 457,000-square foot Clayton facility. Expanded several times since it was inaugurated in 1996, Novo Nordisk’s current plant in Clayton, N.C. is one of the company’s strategic production sites responsible for formulation, filling, and packaging of diabetes medicines. The plant also assembles and packages the company’s FlexPen and FlexTouch prefilled insulin devices for the US market.

Once the new site becomes operational, the diabetes API production organization in Clayton will be named DAPI-US (Diabetes Active Pharmaceutical Ingredients – US). It will be part of the Danish diabetes API production organization in Kalundborg, which will be named DAPI-Denmark.

In August 2015, Novo Nordisk announced that it would invest $2 billion into production facilities in Clayton; Malov, Denmark; and Kalundborg, Denmark, with $1.8 billion of this amount being invested in the Clayton plant. Also in August 2015, the company announced plans to initiate Phase IIIa development of oral semaglutide, a GLP-1 analogue formulated as a once-daily tablet for the treatment of Type 2 diabetes.

Sanofi. Diabetes is Sanofi’s most important therapeutic franchise from a revenue perspective, accounting for 2015 revenues of EUR 7.58 billion ($8.48 billion), and key to the company’s strategy is to respond to generic competition for its top-selling product overall and for diabetes, Lantus (insulin glargine), with 2015 sales of EUR 6.39 billion ($7.22 billion). A biosimilar of Lantus was launched by Eli Lilly and Company in several European markets in the third quarter of 2015, including Germany, the UK, Spain, and eight other countries and in Japan. Sanofi and Lilly settled a suit under which Lilly will not sell its insulin glargine product in the US before December 15. 2016. In the US, Sanofi’s pediatric regulatory exclusivity for Lantus expired in February 2015. The compound patent expired in the US in August 2014 and in November 2009 in Europe and Japan, which also saw a patent extension expire in November 2014. The supplementary protection certificate for Lantus, including pediatric extension, expired in major European countries in May 2015, according to the company’s 2015 annual filing.

Sanofi hopes to return to growth in its diabetes franchise by 2019 by building on associated products with Lantus, namely, Toujeo, the company’s next-generation basal insulin. Toujeo gained marketing authorization in the three major markets (US, Europe Union, and Japan) in 2015 and is now approved in 20 countries overall. The uptick for Toujeo is long, with the drug posting sales of EUR 164 million ($185 million) in 2015 although analysts point to its market potential. A recent Thomson Reuters analysis projects 2019 sales of Toujeo at $1.299 billion, pushing the drug into blockbuster status, although not recapturing the full revenue loss from the patent expiry of Lantus.

Sanofi is also seeking uptick from lixisenatide, a glucagon-like peptide-1 (GLP-1) receptor agonist both as a single drug and as a combination therapy. Earlier this year, the FDA Sanofi’s Adlyxin (lixisenatide), a once-daily injection to improve glycemic control (blood sugar levels), along with diet and exercise, in adults with Type 2 diabetes. Adlyxin is approved under the proprietary name, Lyxumia in more than 60 countries and marketed in over 40 countries. Commercial launches include most EU countries, Japan, Brazil, Mexico, and India. Adlyxin was in-licensed from Zealand Pharma A/S.

Sanofi is also pursuing a combination therapy of basal insulin glargine receptor and lixisenatide. The company recently amended its NDA for the combination therapy based on a request for additional information by the FDA, resulting in an extension of the Prescription Drug User Fee Act goal date by three months to November 2016. The race to market for this combination is important to Sanofi.

In 2015, Retrophin, a San Diego, California-based biopharmaceutical company, sold a rare pediatric disease priority review voucher (PRV) to Sanofi for $245 million, which Sanofi later applied in its NDA for the fixed combination product to gain priority review of the product by the FDA The FDA voucher program is intended to encourage development of new drug and biological products for prevention and treatment of certain rare pediatric diseases. A voucher may be issued to the sponsor of a rare pediatric disease product application and would entitle the holder to priority review of a single new drug application or biologics license application, which reduces the target review time and could lead to an expedited approval. The sponsor receives the voucher upon approval of the rare pediatric disease product application and the voucher may be transferred to another company.

Retrophin received the voucher following the March 2015 approval of Asklepion Pharmaceuticals’ drug Cholbam (cholic acid), a drug to treat pediatric and adult patients bile acid synthesis disorders. Asklepion transferred the PRV to Retrophin, which had licensed the rights to the voucher under an earlier agreement. Sanofi purchased the PRV from Retrophin in July 2015 and redeemed it in its NDA for the fixed combination product in December 2015 to gain a priority review of the product of six months rather than standard review period of 10 months by the FDA.

Among other recent developments in its diabetes franchise, Sanofi formed a licensing agreement in 2015 with Lexicon for sotagliflozin, a SGTL-1/2 inhibitor, and with Hanmi for a weekly GLP-1, a long-acting insulin and a weekly insulin-GLP-1 combination.

Reflecting the need to move behind just the drug in diabetes care, earlier this month, Sanofi and Verily Life Sciences (formerly Google Life Sciences) launched Onduo, a joint venture created through Sanofi and Verily’s diabetes-focused collaboration. The joint venture is based in Kendall Square in Cambridge, Massachusetts. Onduo will focus on developing solutions that combine devices, software, medicine, and professional care for disease management. The companies first announced the partnership in August 2015.

The company will leverage Verily’s experience in miniaturized electronics, analytics, and consumer software development, and Sanofi’s clinical experience. Onduo will be led by Joshua Riff, MD, who has been appointed to chief executive officer. Dr. Riff joins Onduo from Optum, the health services company of UnitedHealth Group, where he was senior vice president of prevention and wellbeing.

Initially, Onduo will focus on the Type 2 diabetes community, specifically on developing solutions ranging from improved medication management to improved habits and goals. Over time, the company plans to expand its focus to include the Type 1 diabetes community, and eventually to people at risk of developing diabetes with the goal of helping them better prevent the onset of the disease.

Table 1: Developed Markets, Spending by Therapy Area, 2019
Therapy Area Sales in 2019 (US$) Compound annual growth rate (CAGR), 2015–2019 Product type
Oncologics $80 bn to $90 bn 7%–10% Specialty
Diabetes $74 bn to $84 bn 12%–15% Traditional
Autoimmune $52 bn to $62 bn 11%–14% Specialty
Pain $33 bn to $39 bn (-2)%–1% Traditional
Viral Hepatitis $28 bn to $33 bn 9%–12% Specialty
Respiratory $28 bn to $33 bn (-1)%–2% Specialty
Anticoagulants $25 bn to $28 bn (-6)%–(-3)% Traditional
Dermatology $24 bn to $27 bn 6%–9% Traditional
HIV antivirals $21 bn to $24 bn 4%–7% Specialty
Mental health $21 bn to $24 bn 1%–4% Traditional
Bn is billion. Source: IMS Institute for Healthcare Informatics, May 2015; IMS Therapy Prognosis, April 2015.
Table II: Pharmerging Markets, Spending by Therapy Area, 2019
Therapy Area Sales in 2019 (US$) Compound annual growth rate (CAGR), 2015–2019 Product type
Antibiotics $19 bn to $22 bn 2%–5% Traditional
Pain $19 bn to $22 bn 5%–8% Traditional
Hypertension $13 bn to $16 bn 4%–7% Traditional
Oncologics $11 bn to $14 bn 9%–12% Specialty
Diabetes $11 bn to $14 bn 9%–12% Traditional
Anti-ulcerants $10 bn to $12 bn 11%–14% Traditional
Dermatology $9 bn to $11 bn 6%–9% Traditional
Cholesterol $7 bn to $9 bn 13%–16% Traditional
Other cardiovascular $5 bn to $7 bn 4%–7% Traditional
Anticoagulants $5 bn to $7 bn 7%–10% Traditional
Bn is billions Source: IMS Institute for Healthcare Informatics, May 2015; IMS Therapy Prognosis, April 2015.

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