Lawsuit against Pfizer regarding inhaled insulin
On 1 August Novo Nordisk filed a lawsuit against Pfizer claiming that Pfizer's product Exubera® infringes Novo Nordisk's patents covering inhaled insulin treatment for diabetes. Whew. The lawsuit, filed in United States Federal Court in the Southern District of New York, alleges that Pfizer wilfully and deliberately infringed the patents. Personally we were surprised to see this - we're far from IP experts, but we just would've assumed Pfizer and Nektar would've been ahead of Aradigm - this will be interesting to watch. A lot of lawyers will make a lot of money.
More on this note - in the Q&A, Novo's Sorenson said it's acquisition of Aradigm brought intellectual property that led to the suit. He went on to add that the action might be limited to Exubera because the issue at the core of the case is the breathing technique and teaching of the breathing technique. This reminds us when Medtronic sued Deltec over the bolus calculator. Our first response was "Wow, we didn't realize it was possible to patent division." Of course, Medtronic was successful and gained $25 million from Deltec. As a reminder, all responsibilities for AERx (Aradigm’s inhaled insulin product) were transferred to Novo Nordisk as of fall, 2004.
On the topic of closely-watched GLP-1 liraglutide (the second most closely watched GLP-1, after Byetta), Novo discussed trials in Japan in brief and offered more data in the Q&A. The phase 2 study in Japan considered 200 type 2s with an average age in the mid 50's who suffered hypoglycemic events. The patients were non-obese, given different doses, showed average A1cs in the 8.2-8.4% range, were on diet or OED therapy. All switched to liraglutide only for the study. Average A1c dropped about 2% -- from 8.3% average to 6.4% -- with 75% in the ADA recommended target range. Of course, ourwe raised our eyebrows at non-obese - why would that exlcusion criteria be used? Novo said that because patients were non-obese liraglutide showed weight neutrality. There were said to be no hypoglycemic events, no dose dependency, and GI issues were in the single digit incidence level - very impressive tolerability, that! Novo anticipates starting phase 3 trials in Japan in the first half of 2007.
As for other clinical data and events, Novo mentioned positive results presented at the ADA in June for a 14-week liraglutide study as well as from the German arm of its Predictive study on Levemir (30,000 patients with type 1 or 2; less hypoglycemia, better control, and weight reduction was shown versus other long-acting analogs.)
NovoRapid was approved for use in pregnancy by the EU in July. That's excellent! Companies usually don't love pregnancy trials since the downside can be big, but this approval was fabulous to see and a very big achievement for Novo.
When questioned about the German reimbursement situation with respect to analog reimbursement, Sorenson noted the situation is confusing for all involved (the Company, patients, physicians). For example, type 2s currently on short acting analogs are being switched back to human insulin. NO!!!!!!! We couldn't believe this when we heard it - these patients are going back to the dark ages. We also sort of were surprised at the response. He said if forced to ballpark the impact, it apparently wouldn't be as great in the first half or as significant as might have thought -- Novo is seeing slower growth in analogs in Germany. BUT for someone who is ON an analog to be forced back - nightmare. Annualized the impact could be about $100 million by year end. He does not anticipate spillover effect outside of Germany, believing that the German reaction to its health care cost problems is specific to Germany and does not reflect how other countries have addressed their respective issues. We aren't convinced by this, esp not when we hear that trials are being done in the UK to test urine and see whether patients should return to testing this way.
Novo launched Levemir the end of March in the US through Novo's 1,200 person sales force. Levemir has 5% of new Rx and 3% of total Rx basal insulin prescriptions. Formulary placement is going well with over 60% of total lives represented. How many are covered at tier 2 or better, we're not sure yet. Novo estimates strong share gains going forward and we have to agree.
Novo's diabetes care business contributed $1.2 b in Q206 -- growing 17% over last year and contributing 68% of overall growth. Below is a summary of Novo's insulin franchise growth.
Q206 in $USD
Insulin analogues: $459 m, up 58% over last year's $290 m and 15% sequentially
Human insulin and related: $636 m, down 1% over last year's $644 m and flat sequentially
Orals: $83 m, up 24% over last year's $67 m and 1% sequentially
Diabetes care total: $1.2 b, up 17% over last year's $1.0 b and 6% sequentially
Analog sales in H106 were:
*Levemir $103 m
*NovoMix $309 m
*NovoRapid $446 m
*Novo has 38% of the insulin analog market (NovoRapid at 51%, NovoMix at 64%)
*Novo has 46% of the European insulin analog market.
*Novo has 40% of the US insulin market, 25% of the analog market.
*As of May, Levemir had 20% market share in Europe.
*Insulin analogs contributed 68% of total revenue growth for Novo in Q2.
*Outside the US, Russia and Turkey were mentioned as drivers for insulin analog growth.
*China and Eqypt were mentioned as drivers for human insulin growth; Novo mentioned an improving reimbursement landscape in China.