Sunday, January 16, 2022

Discerning Hope from Hype Related to Novo Nordisk Glucose-Responsive Insulin

Below are excerpts from an investor report on Novo Nordisk from the Wall Street investment bank known as Credit Suisse (the New York-based research business of the Swiss banking giant which mainly serves billionaire clients was formerly known as First Boston). I will discern my take-aways as it pertains to the few notes about Novo Nordisk's much-hyped (by the company itself) glucose-responsive insulin. There is some progress, but it is by no means a done deal.  

On November 4, 2021, Credit Suisse attended a London sell-side meeting with Novo Nordisk A/S's Karsten Knudsen (CFO), Camilla Sylvest (EVP Commercial Strategy) and Martin Lange (EVP Development). Most of the dialogue was about the company's GLP business (Ozempic, Saxenda, Xultophy [iself a combo drug consisting of Novo's GLP-1 agonist and its basal insulin analogue degludec sold under the brand name Tresiba] and Wegovy -- all of which are New & Improved versions of the company's "original" GLP-1 agonist which was branded as Victoza, and that product was little more than an improved version of the biologic drug branded as Byetta which the old Amylin Pharmaceuticals commercialized before that company's ultimate demise; most of its intellectual property assets were acquired by AstraZeneca, although Lilly kept some developed during its joint venture with Amylin. Today, Lilly sells a new and improved version of its own GLP-1 agonist which is branded as Trulicity) and GLP-1 agonists and derivatives thereof now drive the vast majority of Novo Nordisk's current revenues in the U.S. and outside the U.S.

Insulin has largely become an afterthought to Novo Nordisk when it comes to to the company's bottom line. Still, Novo Nordisk began with insulin and still likes to boast that it's the world's largest insulin manufacturer (mostly because of relentless acquisitions made around the world, largely bankrolled by profits derived in the United States). Indeed, Novo Nordisk told investors that global insulin growth of 2% was still solid and that Novo Nordisk is taking global volume share, although the bottom-line impact of that has been offset by U.S. price declines. Novo Nordisk expects no changes to its insulin business as a result of the continued U.S. pricing pressures it faces. 75% of its U.S. insulin revenues are paid to PBM's to secure commercial healthcare insurance company formulary placement. 

Side-note: currently, there are a growing number of biosimilars of Novo Nordisk's current bestselling prandial insulin analogue, with approximately 4 now in development for Novo Nordisk's insulin aspart alone (including from Viatris/Biocon, Lannett/HEC, and Sandoz/Gan & Lee) which means Novo Nordisk really needs a hit with glucose-responsive insulin, because none of its basal insulin varieties have done very much to improve the company's bottom line.

In spite of the fact that GLP-1's now account for most of Novo Nordisk's revenues, Novo Nordisk is still investing in new insulin varieties. 

Aside from a once-weekly basal insulin Novo Nordisk calls Icodec (which seems to be targeting the massive Type 2 patient audience), another insulin variety the company is finally more seriously investing in glucose-responsive insulin. Novo Nordisk's glucose-responsive insulin is based mainly on technology the company acquired in 2018 when it bought at UK-based university startup called Ziylo. Ziylo's glucose binding molecules are synthetic molecules that were designed by University of Bristol (UK) Professor Anthony Davis. However, it was actually the University of Bristol acquisition which brought Novo Nordisk closer to making it happen, and so far, that seems to be working well, although it is still VERY early in development. So much for the myth that Novo Nordisk is a company which develops everything in-house!

The stable, synthetic molecules developed by the University of Bristol exhibit an unprecedented selectivity to glucose in complex environments such as blood. Still, Novo Nordisk was historically something of a patent troll when it came to glucose-responsive insulin. Over the years, Novo Nordisk has filed dozens of pre-emptive patients which were never really based on science, all in an effort to scare rivals from even pursuing the concept. 

Recall that in July 2021, rival Lilly made headlines of its own when that company acquired a Los Angeles-based startup called Protomer Technologies (see https://medcitynews.com/2021/07/eli-lilly-gets-glucose-sensing-smart-insulin-via-buyout-of-preclinical-protomer/ for the news). In November 2020, Lilly had led an equity investment in Protomer alongside the JDRF T1D Fund (Protomer received seed capital from JDRF, but T1D nonprofit is legally independent of JDRF T1D Fund and there is no management overlap; also the JDRF T1D Fund is largely bankrolled by a billionaire father named Sean Doherty and his desire to advance treatments for his T1D son named Finn). All told, Protomer raised $6.6 million seed financing. In July 2021, Lilly subsequently acquired the rest of Protomer that it did not already own. It is unclear how far Lilly's Protomer investment really is, although it is likely not very far behind the Novo Nordisk/Ziylo effort, which has only completed Phase I clinical trials and now must do some work before it goes to Phase II.

Back to Credit Suisse's November 2021 meeting with Novo Nordisk top execs. Novo Nordisk told Credit Suisse that its early Phase I clinical trials of glucose-responsive insulin had demonstrated good proof-of-principle, although the company admitted that the company still needs to refine it further before it can progress. More specifically, the company revealed that its Phase I trial results indicate the company needs to look at PK (Pharmacokinetic) properties before progressing. PK is the study of how the body interacts with administered substances for the entire duration of exposure. But Novo Nordisk reminded investors that PK analysis is not likely to be a major barrier because that's something Novo Nordisk is very good at.

The company also revealed that it would offer more details on its broadening technology platforms at its March 3, 2022 Capital Markets Day ("CMD") to be held in Copenhagen, Denmark. Perhaps more details will be revealed in that event.

There are no guarantees of course, but presuming everything works out as anticipated and there are no unpleasant Phase II or Phase III clinical trial results, this suggests serious development efforts are finally underway. If that happens, we could potentially see glucose-responsive insulin by 2035 because Novo Nordisk needs a hit in insulin (its basal insulin varieties were technologically successful, but none have achieved blockbuster status because they do not serve an unmet need, and now that rival Sanofi Lantus has seen patents expire, the new competitive dynamic is ever-lower prices which Novo Nordisk doesn't want to do). Still, I wouldn't hold my breath waiting for glucose-responsive insulin to happen just yet.

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