Victoza in its crosshairs, Lilly primes for marketing duel

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As the dust settles from the American Diabetes Association meeting this week, a marketing battle is brewing. Data presented at the big confab suggested that Eli Lilly's experimental GLP-1 analog, dulaglutide, is largely on-par, efficacy wise, with some of its would-be competition.

The three GLP-1 drugs on the market are Bristol-Myers Squibb's/AstraZeneca's Byetta and Bydureon, which are once-daily and once-weekly GLP-1s, respectively, and the once-daily Victoza, sold by Novo Nordisk. With minimal clinical differences separating the 1.5-mg version of dulaglutide from these others, and more GLP-1s in development from other manufacturers, analysts foresee an intense battle for share of the GLP-1 market, which Barclays expects to reach nearly $2.5 billion in sales this year, rising to $7-8 billion by 2020.

To grab a piece, the Indianapolis-based drug maker has some work ahead. Most telling will be a head-to-head trial, called AWARD-6, testing dulaglutide against market behemoth Victoza. The results are expected to be out by late this year or early next. Lilly expects to submit dulaglutide for FDA approval later this year.

ISI Group analyst Mark Schoenebaum, citing an analyst meeting he attended at Lilly last night, wrote in an investor note that the firm is “confident” dulaglutide will prove non-inferior to Victoza in A1c lowering. However, the two drugs' futures may not depend solely on that data. According to another note from Schoenebaum, “Since this is a classic primary care market, other factors may perhaps be more important."

These other factors could include payer strategies and discounts, an area where Lilly stands to gain. If dulaglutide is approved, Lilly will be well on its way to having a drug in every diabetes class, "from orals to GLP-1s to insulins," the analyst notes, a pharmacopeia that could prove advantageous when negotiating with health plans and government payers.

Lilly also announced at ADA more data for its oral Phase III SGLT-2 inhibitor empagliflozin, which it's co-developing with Boehringer Ingelheim, and that its regulatory filing for a novel basal insulin could come as early as 2014.

Formularies notwithstanding, Novo may hold the advantage on the ground, according to Schoenebaum, as the Danish drug maker has a sizable sales force. According to its Q1 financial report, Novo stated it expects “significant costs related to the expanded sales force and marketing investments in the portfolio of modern insulins and Victoza in the US.” Novo Nordisk could not be reached for a statement on its growing sales force.

Lilly, too, has added numbers to its sales and distribution capabilities. Its Q1 financial statement mentions a “small increase in its diabetes sales force to prepare for the planned launches of later-stage pipeline products.”

Strategically, Lilly appears to be trying to grow the pie before it begins to carve out its share. That's the impression Barclays analysts took from the Lilly analyst meeting. "Management indicated that 'it would be a mistake' to target switches from Victoza and that its strategy would include growing the market as opposed to taking its share,” according to a 29-page analyst report from the bank.

That said, at least in the early going of a dulaglutide launch, "the lowest-hanging fruit would be that of BMY's once-weekly Bydureon, which has multiple shortcomings, including a need for reconstitution, a large needle (23G versus dulaglutide 29G and Victoza 32G) and the development of nodules under the skin," the Barclays report added.

Cardiovascular outcome studies could lead to greater success for the GLP-1s. Should they demonstrate a CV outcomes benefit, "we believe the GLP-1 class could experience a significant resurgence of growth," concluded the report. Schoenebaum told MM&M that dulaglutide's cardiovascular study will read out in 2018.

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