Novo nordisk drug victoza and roches upside

May 26, 2010

57TH ST RESEARCH NOTE
Rocheʼs Taspoglutide for Diabetes.
Can Roche become a player in the Diabetes Marketplace?

WORLDWIDE MARKET FOR DIABETES
Right now it is dominated by Actos which is made by Takeda.
The annual revenues are about $3.4 billion annually. Then there is
Avandia (GSK). The drug does about $1.2 billion annually, however
recent data out regarding Avandia causing heart attacks has cost them
severely.
NEW KIDS ON THE BLOCK
The new kids on the block are Novo Nordisk and laraglutide is the drug.
Novo launched their drug last year it is once per week and it is a self
injectable. The other player is Amlyn and their drug Byett which had
blockbuster potential when launched; however Icahn looms large for this
company.
FUTURE OF DRUGS
The future is in drugs that are injectable drugs that are dosed with
less frequency (i.e once per month or once per week). That is why
everyone is so high on Novo Nordisk's drug, Victoza. It is once per
week and will eventually gobble up the branded Actos business when
it goes generic as well as take away the Byetta and Avandia business.
ROCHE UPSIDE
Roche's upside is huge considering their substantial experience
bringing injectable and infusion drugs to market. They have
Genentech in the bag too. They will dominate when they come to
market because they know what they are doing big time.
DRUG MARKETING – THE FUTURE FOR THE INDUSTRY
The future in any drug marketing now is to correlate with patient
outcomes. The number 1 barrier to improved patient outcomes relative to
pharmaceutical usage is compliance. Does the patient take the drug when
they are supposed to and under the conditions they are supposed to. The
more frequently you are asking the patient to do that, the less frequently
they will do it based on the following barriers:
1. Their age
2. Their lifestyle (how active and busy they are)
3. The side effects of the drug
4. The dietary restrictions (empty stomach, no milk, etc)
5. What other comorbidities does the patient have? Do they take
other meds for those? if so it really gets complicated.
The thought is now that we need to get away from the "once a day"
mentality and get to once per week, per month or even per year. The less
often you ask a patient to comply the more often they will. In diabetes the
injectable is optimal because patients inject themselves already with insulin
so they are comfortable with the concept.
In general the injectable versions or drugs have a far better absorption rate
than oral meds.thus far greater efficacy. You also avoid GI tolerance
issues with this administrative route.
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