Two new therapies made by Sanofi and Novo Nordisk to compete in crowded diabetes market

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The FDA approved two new diabetes drugs, Sanofi's Soliqua and Novo Nordisk's Xultophy, that are expected to compete in an already crowded insulin market.

The therapies for type 2 diabetes are both combinations of a long-acting insulin and a GLP-1 medicine. Soliqua is a combination of Sanofi's blockbuster insulin Lantus and GLP-1 Lyxumia; Xultophy is a combination of Novo's insulin Tresiba and GLP-1 Victoza.

Both drugs are considered improvements over current injectable drugs for patients with type 2 diabetes, but the market's appetite for Xultophy and Soliqua remains to be seen given the “intensely competitive landscape” for diabetes care, Leerink analyst Seamus Fernandez wrote in an investor note Tuesday.

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Fernandez said he believes endocrinologists will view Soliqua as a superior product for treating type 2 diabetes compared to Xultophy, likely owing to Lantus' legacy. Lantus is the current market leader in terms of basal insulins, generating $4.2 billion in U.S. sales alone in 2015. He also noted that Victoza is a crucial drug for Novo Nordisk's short-term growth and that may affect the company's ability to sell Xultophy at a competitive price. Sanofi's Lyxumia, on the other hand, “generates next to no revenue currently,” he wrote, which gives the French drugmaker more flexibility in how it prices Soliqua.

It's unclear what subset of diabetes patients these drugs would best serve, according to experts. Michael Kuhn, VP of market access at GfK Health, said that there may be a place for them in the market among certain overweight patients. Dr. Leon Henderson, a senior principal for inThought Research, believes they may represent a option for patients at risk of kidney problems.

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These approvals come at a time when makers of diabetes products are under increased scrutiny from payers and lawmakers to address how insulin is priced and how their therapies can compete against emerging biosimilars.

Novo Nordisk cut its expected profit growth for 2017 from 10% to 5% in October, citing a “challenging pricing situation” for basal insulins like Tresiba and said it would cut 1,000 jobs as a result. Sen. Bernie Sanders (I-VT) tweeted on November 1 that “people are dying or getting sicker because they can't afford their insulin, just so Eli Lilly and Novo Nordisk can make outrageous profits.”

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In September, UnitedHealthcare removed Sanofi's Lantus from its 2017 drug formulary and replaced it with Basaglar, Eli Lilly's Lantus biosimilar. CVS Health also removed Lantus from its 2017 national formulary in favor of Basaglar.

Novo Nordisk plans to launch Xultophy in the U.S. in the first half of 2017. The drug was approved in Europe in 2014. Sanofi said Soliqua will be available in January.

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