Aleglitazar failure will have little impact on booming diabetes market

Analysis

The collective yawn that greeted the announcement that Roche was pulling the plug on its diabetes project aleglitazar was an expression that the PPAR agonist category of which it is a part has been largely written off. While diabetes drug sales will rise at a healthy pace to reach $61bn by 2018 as diabetes prevalence surges, that class – which includes the nearly non-existent Avandia – is the only significant brake on growth.

An examination of EvaluatePharma data reveals that diabetes drug sales will increase by 9% a year between 2012 and 2018, with new classes such as the SGLT inhibitors and GLP-1 agonists driving much of the new activity (see tables). Insulin giants Novo Nordisk, Sanofi and Eli Lilly together will account for about half of all sales in 2018, demonstrating the significance that the glucose-modulating peptide has in a disease area still in need of innovative therapeutic approaches.

Lilly in the mix

While aleglitazar was not forecast to become a blockbuster, it had to be regarded as a potentially significant part of the diabetes landscape. At $268m in sales in 2018, according to consensus, it figured as the seventh-biggest R&D project, a category led by Lilly’s GLP-1 dulaglutide (Clean superiority sweep for dulaglutide could reshape diabetes market, April 17, 2013).

Top 10 diabetes R&D projects by 2018 sales
Rank Product Generic name Company Pharmacology class 2018 annual sales ($m) Status
1 Dulaglutide dulaglutide Eli Lilly Glucagon-like peptide 1 (GLP-1) agonist 617 Phase III
2 LY2963016 insulin glargine recombinant Eli Lilly Insulin 522 Phase III
3 LY2605541 insulin peglispro Eli Lilly Insulin 448 Phase III
4 Eperzan albiglutide GlaxoSmithKline Glucagon-like peptide 1 (GLP-1) agonist 391 Filed
5 Empagliflozin empagliflozin Boehringer Ingelheim Sodium-glucose cotransporter-2 (SGLT2) inhibitor 354 Filed
6 Lixilan insulin glargine recombinant; lixisenatide Sanofi Glucagon-like peptide 1 (GLP-1) agonist & insulin 282 Phase II
7 RG1439 aleglitazar Roche Peroxisome proliferator activated receptor (PPAR) alpha & gamma agonist 268 Phase III
8 MK-3102 - Merck & Co Dipeptidyl peptidase IV (DPP-IV) inhibitor 238 Phase III
9 Afrezza insulin (human) MannKind Insulin 230 Phase III
10 Fasiglifam fasiglifam Takeda G protein-coupled receptor 40 (GPR40) agonist 228 Phase III

Lilly is already a major player in diabetes, and figures prominently in the R&D list, with its biosimilar of Sanofi’s long-acting insulin Lantus, LY293016, second on the table and its novel pegylated long-acting insulin LY2605541 in third spot.

It also has a partnership with Boehringer Ingelheim on the number five R&D project, the SGLT2 inhibitor empagliflozin; thus success with all of its candidates could see the Indiana-based group challenging Merck & Co for third spot on the companies list in future years.

Top diabetes companies
Annual sales ($bn) Market share Market rank
2012 2018 CAGR 2012 2018 2012 2018
Novo Nordisk 11.50 19.37 9% 25% 27% 1 1
Sanofi 7.43 11.07 7% 16% 16% 2 2
Merck & Co 5.78 9.49 9% 13% 13% 3 3
Eli Lilly 4.31 5.63 5% 9% 8% 4 4
Bristol-Myers Squibb 1.05 4.42 27% 2% 6% 10 5

Lilly’s presence in diabetes stems primarily from its sales of insulin, an old but reliable business. Mealtime insulin Humalog and and short-acting insulin Humulin R are forecast to be its first and fourth-biggest drugs in 2018 respectively, following major patent expiries of Cymbalta and Zyprexa. Only Humalog makes the list of top 10 diabetes drugs in 2018, however, so it is clear that Lilly is looking for new ways to expand its presence.

Lilly’s entrance into the long-acting insulin space takes on Sanofi’s one diabetes drug of significance in Lantus, but it is one really good drug. The top-selling product in the space, Lantus has withstood the challenge of Novo’s Levemir and has been helped along by Novo’s stumble with Tresiba (Novo in need of a booster shot, July 3, 2013). With a new formulation, Lantus might even be able to fend off Lilly’s biosimilar (ADA – New Lantus enlivens Sanofi diabetes strategy, June 25, 2013).

Top 10 diabetes products in 2018 Annual sales WW ($bn)
Rank Product Generic name Company Pharmacology class 2012 2018 CAGR
1 Lantus insulin glargine recombinant Sanofi Insulin 6.4 8.7 5%
2 Januvia sitagliptin phosphate Merck & Co Dipeptidyl peptidase IV (DPP-IV) inhibitor 4.1 6.3 7%
3 NovoRapid insulin aspart Novo Nordisk Insulin 2.7 4.9 10%
4 Victoza liraglutide Novo Nordisk Glucagon-like peptide 1 (GLP-1) agonist 1.6 4.1 16%
5 Janumet metformin; sitagliptin phosphate Merck & Co Dipeptidyl peptidase IV (DPP-IV) inhibitor & biguanide 1.7 2.9 9%
6 Levemir insulin detemir Novo Nordisk Insulin 1.7 2.5 7%
7 Humalog insulin lispro recombinant Eli Lilly Insulin 2.4 2.4 0%
8 Human insulin & devices insulin (human) Novo Nordisk Insulin 2.4 2.4 0%
9 NovoMix 30 insulin; insulin aspart Novo Nordisk Insulin 1.6 2.0 4%
10 Galvus vildagliptin Novartis Dipeptidyl peptidase IV (DPP-IV) inhibitor 0.9 2.0 14%
Other 10.7 23.1 14%
Total diabetes market 36.2 61.2 9%

Insulin also figures prominently in Novo’s top line, with $8.4bn of its $13.4bn of pharma sales coming from its tailored products NovoRapid and NovoMix 30, along with its human insulin and devices franchise. This is an incredibly reliable business, with all but the human insulin and devices franchise growing year on year, and human insulin staying relatively steady at $2.4bn a year.

Growth markets

Unlike its competitors in the insulin business, the Danish group also has an important drug in one of the newer classes, the glucagon like peptide-1 (GLP-1) agonist Victoza. It is fortunate for Novo, in the wake of the Tresiba debacle, that Victoza is forecast as the fastest-growing drug in the diabetes space at 16% a year between 2012 and 2018. However, with the once-weekly dulaglutide entering the frame against once-daily Victoza, the competitive situation could soon change.

While sales in the GLP-1 class are moving at a fast clip, as a category they are forecast to be outpaced by the sodium glucose cotransporter-2 (SGLT-2) inhibitors like Johnson & Johnson’s recently launched Invokana. Coming third in that class race are the dipeptidyl peptidase IV (DPP-IV) inhibitors, which includes Merck & Co’s huge blockbuster Januvia.

Diabetes drug classes Annual sales WW ($bn)
2011 2014 2016 2018 CAGR
Human Insulins & Analogues 17.38 23.35 26.73 29.57 8%
DPP-IV Inhibitors 6.53 11.34 14.09 16.09 14%
GLP-1 Agonists 1.80 3.85 5.79 7.59 23%
Others - mostly SGLT2 inhibitors  0.30 0.85 2.02 3.43 42%
Sulphonylureas 1.56 1.32 1.35 1.38 (2%)
Biguanides 0.88 1.12 1.06 1.07 3%
Alpha-Glucosidase Inhibitors 0.97 0.85 0.87 0.88 (1%)
Glinides 0.79 0.50 0.54 0.62 (3%)
Glitazones 4.69 0.43 0.40 0.59 (26%)
Total 34.89 43.61 52.84 61.22 8%

If Januvia and its metformin combination Janumet were added together they would threaten Lantus’s position at the top of the table. As it is, Januvia alone is second biggest, and like Sanofi with Lantus the Januvia franchise is Merck’s only entry in the diabetes world – but a lucrative one it is, and one that will help make up for the loss of Singulair’s market exclusivity last year.

With obesity and the concomitant development of metabolic disorders beginning to afflict developing countries as well as the industrialised west, diabetes is a good place to be for pharma companies wishing to achieve topline sales expansion – it has a growth rate that matches oncology, an area where aleglitazar maker Roche excels. The downside of being in diabetes is development costs, as trials number well into the tens of thousands rather than the hundreds that can get a cancer drug approved.

Still, with so many potential patients, diabetes is a hard category to ignore.

To contact the writers of this story, email Jonathan Gardner or Amy Brown in London at news@epvantage.com or follow @JonEPVantage or @AmyEPVantage on Twitter

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