Balancing Innovation With Profits

By Cliff Mintz Ph.D., Life Science Leader magazine

Novo Nordisk, a global healthcare company, has spent the past 87 years quietly and steadfastly developing innovative treatments to combat diabetes. Headquartered in Denmark, Novo Nordisk employs more than 29,300 employees in 76 countries, and markets its products in 179 countries. Last year, the company had more than $9 billion in sales with 75% coming from the sale of diabetes products.

A person who has played a pivotal role in guiding the development of Novo Nordisk’s portfolio of diabetes medicines is its chief medical officer (CMO) Alan Moses, M.D. Dr. Moses joined Novo Nordisk in 2004 as associate VP for clinical research and medical affairs endocrinology and in 2007 was appointed CMO of North America. In 2008, he was named corporate VP and global CMO and oversees new product development in diabetes from discovery through commercialization. Prior to joining Novo Nordisk, he was a professor at Harvard Medical School and senior VP and CMO of the Joslin Diabetes Center, a Harvard-affiliated, independent clinical and research facility.

Despite its small size (as compared with some of its larger main competitors such as sanofi-aventis, GlaxoSmithKline, Pfizer, and Lilly), the company has established itself as a dominant player in prevention and treatment of diabetes. While many of its competitors are struggling to improve market share in the diabetes market, Novo’s sales and operating profits grew 14% and 19% respectively in the first half of 2010. This growth was mainly driven by rising sales of optimized recombinant insulins and Victoza (liraglutide), a recently approved GLP-1 (glucagon-like peptide-1) analog agonist that stimulates insulin production. While Novo’s exact market share is difficult to calculate, it is generally regarded as the market leader in global diabetes.

Dr. Moses is board-certified in endocrinology and metabolism and a fellow of the American College of Physicians. He received his B.S. from Duke University and an M.D. from Washington University School of Medicine.

I had the opportunity to chat with him earlier this month about the growing diabetes epidemic, Novo’s diabetes treatment pipeline, and the business implications of the expanding worldwide diabetes market.

Question: The diabetes epidemic is expanding and, by some accounts, has reached pandemic proportions. What are some of the new products that Novo is developing to help to combat the pandemic?

Answer: Victoza is an example of the innovative diabetes treatments that we like to develop. In addition to its ease of use and effectiveness in managing blood glucose levels, it also reduces food intake and induces weight loss. We will continue to innovate and refine Novo’s glucose analogs, GLP-1 receptor, and related peptide agonists and recombinant insulin products to allow patients to easily and better manage their diabetes.

Some of these innovations include longer-acting forms of recombinant insulin (DegludecPlus) and GLP-1 (Semaglutide). Both products — currently in clinical development — would substantially reduce the number of injections required by patients with diabetes to adequately manage blood glucose levels.

Another area we focus on — and many of our competitors tend to overlook — is systems used to deliver diabetes medicines like insulin and Victoza. Novo was the first to develop and introduce a prefilled insulin injection, which reduces the anxiety associated with injections and improves compliance among patients on insulin therapy. We continue to innovate in this area and believe our focus on improving the lives of persons with diabetes is one of the things that separates us from many of our competitors.

We are also looking at novel treatments to control obesity itself. For example, liraglutide is being evaluated as an anti-obesity agent and is currently in Phase 3 clinical development. By better understanding the underlying mechanisms and biologic pathways responsible for obesity, we believe we can develop more effective medicine to treat patients with diabetes.

Question: Victoza was recently approved as first-line therapy for treatment of type 2 diabetes in the EU and Japan but as a secondary treatment in the United States after patients fail to respond to exercise, diet, and metformin therapy. Can you explain why the FDA didn’t grant Victoza status as a primary treatment for patients with type 2 diabetes?

Answer: Most clinical guidelines recommend exercise and diet in combination with metformin as an appropriate first-line treatment option for type 2 diabetes. While other regulatory agencies considered Victoza appropriate as a first-line treatment option, the FDA had some safety concerns based on results obtained from animal models, mainly that Victoza caused abnormalities in calcitonin-producing parafollicular cells (C cells) in the thyroid gland. The safety of the people who use our drugs is of paramount importance, and the agency was acting in their best interest after rendering its decision on the label for Victoza.

Anecdotal evidence suggests that Victoza is clinically working as expected: controlling blood glucose levels without weight gain and with reduced risk of hypoglycemia. This has prompted us to expand the indication of the product as an anti-obesity treatment.

Question: Unlike many of your larger competitors, Novo continues to innovate. What drives innovation at the company?

Answer: We innovate by leveraging our experience and expertise around protein chemistry and expression and drug delivery. This enables us to refine our products to improve their safety, efficacy, and delivery to patients with diabetes.

Unlike many of our competitors, we view diabetes as a “disease state,” not a single indication. As a result, we approach the disease from a different perspective, which facilitates discovery and development of novel treatments. Recently, our pipeline of diabetes medicines was voted the most robust in the industry. And, our success rate of taking drugs from Phase 2 clinical trials through regulatory approval is one of the best in the industry. Further, unlike many of our competitors, our commitment to R&D is stronger than ever, and we are constantly searching the world for clever and creative investigators who can help us advance our objectives. About 75% of our annual revenues are allocated for new drug discovery and development.

Question: What do you think represents the “Holy Grails” for the treatment of type 1 and type 2 diabetes? And, do you think there will ever be a cure for diabetes?

Answer: The goal for any treatment, whether it be type 1 or type 2 diabetes, is to allow patients with the disease to lead a normal life without being impeded by it. In other words, maintaining control of the quality of one’s life and not allowing the disease to dictate or control it.

With regard to type 2 diabetes, which recently has overshadowed type 1 diabetes in the lay press because of its rising prevalence and cost to the public, I am very bullish on the next generation of improved recombinant insulins which act rapidly, have a longer-lasting basal state of insulin levels, and will require fewer injections. However, the key to solving the type 2 diabetes epidemic is prevention — that is, eating correctly and exercising to maintain an appropriate BMI (body mass index) to reduce the risk of developing the disease.

Type 1 diabetes is more challenging because there is usually very little or no secretion of insulin by the beta cells of the pancreas.
This means the defective beta cells must be replaced with normal ones to restore insulin secretion. While this is a great idea, it would necessitate developing a source of beta cells that will not be rejected by the body and don’t require the chronic use of potentially dangerous immunosuppressive drugs.

Perhaps the Holy Grail for both type 1 and type 2 diabetes is to gain a better understanding of the pathways that lead to destruction or loss of beta cell function and to possibly identify strategies that can be used for early intervention to prevent development of the diseases. While we understand some of the pathways and underlying mechanisms that contribute to the etiology of type 1 and type 2 diabetes, there is still a lot of work that remains.

Question: Despite Pfizer’s highly publicized difficulties with its inhalable insulin, interest in this and other forms of alternative insulin delivery continues to be strong. Do you think investment in inhalable insulin or other alternate forms of insulin delivery is a worthwhile business decision?

Answer: I can’t say whether or not investment in inhalable insulin [pulmonary delivery] would be worthwhile until it is demonstrated to be safe and clinically useful. That remains to be demonstrated. Pfizer’s inhalable insulin, although approved, has not been accepted by the diabetes community or market. MannKind’s inhalable insulin that is in clinical development may also face similar challenges if it is approved.

The reason why pulmonary delivery has gained so much attention is that most patients prefer noninjectable over injectable medications. Pulmonary delivery of insulin may lead to greater insulin use and earlier disease intervention. Generally speaking, there is a resistance to insulin therapy among physicians and patients. This may be driven by the notion among patients that bad things happen when people are prescribed insulin — Uncle Harry lost a leg after he started taking insulin or grandma died six months after her doctor prescribed insulin therapy. Luckily, the stigma associated with insulin therapy is diminishing, but it is still a problem.
We are currently working on an oral delivery system for insulin and GLP-1 analog agonists. The program is in early stage clinical development, but we believe by manipulating the molecules and delivery systems, we can achieve the desired clinical effects of orally delivered insulin and related molecules.

Question: The FDA recently granted approval for the first embryonic stem cell clinical trial in the United States. Does Novo have an active embryonic stem cell program to develop treatments for type 1 diabetes?

Answer: The Hagedorn Research Institute (HRI) located in Gentofte, Denmark is a fully integrated part of Novo Nordisk and a world leader in embryonic stem cell research and cellular replacement strategies for type 1 diabetes. Researchers at the institute are exploring methods to control the differentiation of embryonic stem cells into beta cells that secrete insulin. We also have strategic research collaborations with a Swedish stem cell company called Cellartis and the University of Lund to intensify research efforts into the area of cell therapy for diabetes.

Our efforts in the embryonic stem cell and beta cell replacement field have not been highly publicized because the Novo culture embraces quiet competence as opposed to flashy publicity. Before we announce a scientific solution or medical breakthrough, we have to verify that it works. This is what we consider an ethical approach to business.

Question: Emerging markets in Asia, South America, and Africa are anticipated to play a pivotal role for future growth of most pharmaceutical companies. Will Novo be able to maintain its dominance in treating diabetes in the face of increasing generic competition and downward pricing pressures in those markets?

Answer: Novo is committed to developing products of high quality that achieve their therapeutic goals regardless of geography. That said, Novo was one of the first Western pharmaceutical companies to establish a presence in China way back in 1994.

Diabetes is becoming a huge problem in China because the incidence of obesity is rising and Chinese people have an increased genetic proclivity toward developing the disease. Currently, over 90 million people in China are affected by diabetes. China recently supplanted India as “diabetes capital of Asia.” We have learned from our early experiences in China that until you are on the ground in a country it is difficult to understand the scope of a problem. In 2009, in partnership with Chinese Academy of Sciences, we created the SIBS-Novo Nordisk Translational Research Centre for Prediabetes to study ways to prevent the development and spread of diabetes in China. More recently we completed construction of a manufacturing facility in China. Novo has, and will continue to have, a strong commitment to the region both therapeutically and economically.

In addition to China, Novo has operations in 178 other countries, giving us a sizable global footprint. Further, seven years ago, we founded the World Diabetes Foundation which is dedicated to improving outcomes of patients with diabetes in the developing world. Through the foundation, Novo has been able to enter into sustainable partnerships with key individuals, governments, universities, and other institutions in the developing world to fight diabetes. To that end, we annually provide free insulin to 10,000 children with type 1 diabetes in developing countries.