Memorandum

Merck’s biosimilar insulin glargine receives tentative FDA approval under brand name Lusduna Nexvue – July 20, 2017

Executive Highlights

  • Merck announced Thursday morning that the FDA has granted tentative approval to Lusduna Nexvue, a biosimilar insulin glargine candidate known as MK-1293 throughout clinical development.
  • Full approval will have to wait until settlement of Sanofi’s patent infringement lawsuit, which can happen in one of three ways: (i) the two companies reach an agreement; (ii) a court decides in favor of Merck; or (iii) 30 months elapse since the lawsuit was filed in September 2016 (~March 2019). Lilly/BI faced a similar lawsuit from Sanofi over their biosimilar insulin glargine product Basaglar, which was settled through a royalty deal and agreement to delay US launch.
  • Biosimilar insulin products promise cost-savings. Major influential payers have already endorsed biosimilar basal insulin, with both CVS Health and UnitedHealthcare giving exclusive formulary positioning to Basaglar over Lantus.
  • Mylan/Biocon also have a biosimilar insulin glargine candidate in phase 3, with FDA filing expected imminently. We’re very curious to see how payers, providers, and patients respond to the availability of multiple biosimilar insulin glargine products.

Merck announced this morning that the FDA has granted tentative approval to biosimilar insulin glargine candidate MK-1293 under brand name Lusduna Nexvue. This is “tentative” because the patent infringement lawsuit filed by Sanofi (over Lantus) in September 2016 is ongoing, so Merck’s product will not be eligible for full approval (i) until the two companies reach a settlement, (ii) until a court decides in favor of Merck, or (iii) until 30 months elapse from the filing date, which would come around March 2019. We certainly hope this is resolved sooner than that, as we see great value in another biosimilar basal insulin product reaching the commercial market and enabling access to basal insulin for more patients (nearly 50% of patients are not in good control, in terms of A1C, while fewer than 30% are on insulin). Lilly/BI’s Basaglar was first, and in fact, the companies settled a similar lawsuit from Sanofi with an agreement to delay US launch and a royalty deal in exchange for license of the disputed insulin glargine patents. The FDA then granted full approval to Basaglar in December 2015, two months after the lawsuit was settled and ~16 months after Basaglar’s tentative approval. We’ll be curious to see if the Merck/Sanofi lawsuit plays out similarly. All this said, the tentative approval comes in the expected 10-12 month time frame following the FDA accepting Merck’s New Drug Application (NDA) for MK-1293 in August 2016.

The NDA was based on two phase 3 trials, both presented at ADA 2016. The type 1 study (n=506) showed MK-1293 to have a comparable therapeutic profile to Sanofi’s Lantus, with near-equivalent A1c-lowering, insulin dose requirements, safety, and tolerability. There was an imbalance in severe hypoglycemia favoring Lantus (6.1 events/person-year vs. 3.2 events/person-year), but 49% of severe episodes in the MK-1293 arm were attributed to two participants. The type 2 study (n=531) also supported the non-inferiority of Merck’s agent vs. Lantus. Notably, Merck is not seeking an interchangeable designation for Lusduna Nexvue, which would allow a pharmacist to switch patients from Lantus without consulting the prescriber. As we learned from Dr. Charles Alexander (former Global Director for Diabetes at Merck) at the time of the NDA submission, the FDA has additional prerequisites and standards that must be met for an interchangeable designation, some of which are still unclear. Indeed, Basaglar was also approved as a follow-on biologic in the US, rather than as a biosimilar in the truest sense (though in other markets both Basaglar and Lusduna Nexvue will be referred to as biosimilars). This points to a potential challenge for Lusduna Nexvue and Basaglar in real-world clinical settings, in that some providers remain unconvinced that these products will truly offer the same safety and efficacy as Lantus (which is very familiar in the diabetes community at this point) – we imagine strong patient/provider education initiatives from Merck and Lilly/BI will be key.

  • Biosimilar insulin products promise lower-cost options for people with diabetes, an advantage that is more important now than ever for many patients (as long as they prove to be safe and effective), as controversy over insulin pricing has reached a boiling point among patients, providers, politicians, and the public. ADA’s Chief Scientific, Medical, and Mission Officer Dr. William Cefalu spoke to the cost issue at the recent Keystone conference, emphasizing the critical value that biosimilar insulins bring to the commercial landscape. The list price of Basaglar is set at a 15% discount vs. Lantus, and based on our calls to a local CVS, we calculate estimated patient savings at ~$56/month or $1.86/day for a patient switching from Lantus to Basaglar. Presumably, Lusduna Nexvue would offer similar savings.
    • Admittedly, the real-world cost-savings from Basaglar haven’t been as dramatic to-date as we may have hoped, partly due to provider reluctance (and concerted education efforts from Lilly/BI should address this over time). Uptake of Basaglar has been slower than expected, with only 17% sequential growth between 4Q16 and 1Q17 – and 4Q16 included only two weeks of US sales, following Basaglar’s US launch on December 15, 2016. We understand that the concept of a biosimilar insulin may take some getting used to for patients and HCPs, and fair enough – long-term safety and efficacy hasn’t yet been established. Perhaps Lusduna Nexvue will benefit from being second-to-market in this biosimilar basal insulin class, as the field will be more familiar with biosimilars by the time Merck’s product hits pharmacy shelves.
  • On the other hand, payers seem comfortable with biosimilars already. CVS Health and UnitedHealthcare both favor Basaglar over Lantus on their formularies, and Express Scripts puts the two on equal footing. Lilly management has cited this favorable reimbursement status as reason to be optimistic about continued growth for the Basaglar business (volume and sales). We’ll be very curious to see how formularies reflect the availability of two biosimilar insulin glargine products – and, Mylan/Biocon have a biosimilar insulin glargine candidate in phase 3 as well, with data presented at ADA 2017 and FDA filing expected shortly.
  • With Lusduna Nexvue, Merck enters the therapeutic area of type 1 diabetes, an incredibly exciting move. The biosimilar product will be indicated for both type 1 and type 2 diabetes (once fully approved), but the company’s former VP of Late Stage Development for Diabetes and Endocrinology Dr. Peter Stein has underscored that this therapy is indeed a sign of Merck’s commitment to type 1 diabetes. With DPP-4 inhibitor Januvia (sitagliptin) being the highest-revenue branded diabetes drug on the market, there’s no questioning Merck is already showing incredible diabetes strength, but we’re so glad to see this development and commercial expertise now extend into type 1 therapy as well.
  • We look forward to Merck’s 2Q17 earnings call on July 28, when we hope to hear much commentary from management on Lusduna Nexvue. See our coverage of Merck’s 1Q17 update for the latest.

 

-- by Payal Marathe and Kelly Close