AZ 4Q16 – Modest 2% YOY growth for diabetes portfolio in 4Q16, driven entirely by 57% YOY growth for Farxiga; Sales flat YOY for Bydureon in 2016; Saxa/dapa combo FDA approval expected in 1H17 – February 2, 2017

CEO Mr. Pascal Soriot reported AZ’s 4Q16 and full year 2016 financial results early this morning. This full report covers 10 major highlights relevant to AZ’s diabetes portfolio and pipeline, with much more commentary on Farxiga, Bydureon, Byetta, and Onglyza added to our First Look, plus whole-class analysis of SGLT-2 inhibitors and DPP-4 inhibitors. Read on for all these insights!

You can also access the company’s presentation slides and an informative appendix with clinical trial updates.

Table 1. Full Year 2016 Financial Results for AZ’s Major Diabetes Products

Table 2. 4Q16 Financial Results for AZ’s Major Diabetes Products

Financial Highlights

1. AZ’s overall diabetes portfolio posted $598 million in 4Q16, which represents 2% year-over-year (YOY) growth as reported and 1% sequential decline. Revenue from all diabetes products for the full year 2016 totaled $2.4 billion – a 9% YOY increase as reported (11% in constant currencies). SGLT-2 inhibitor Farxiga was the sole driver of this growth for AZ Diabetes.

2. Sales of Farxiga (dapagliflozin) grew 57% YOY to $239 million in 4Q16. The SGLT-2 inhibitor brought in $835 million in revenue for 2016 – marking an impressive 70% YOY growth as reported and 72% YOY growth in constant currencies – and management forecasted that the franchise could hit $1 billion blockbuster status in 2017.

3. In 4Q16, the SGLT-2 inhibitor class grew 48% YOY and 21% sequentially to $840 million. Farxiga captured 28% of this market by value and drove the double-digit growth alongside Lilly/BI’s Jardiance (empagliflozin), which grew five-fold YOY in 4Q16 and captured 27% of the market by value. Despite remaining the clear frontrunner, J&J’s Invokana (canagliflozin) continues to lose market share, coming in at 44% in 4Q16. Farxiga leads the class by volume, with a 42% share of total prescriptions (TRx) – we imagine this is largely driven by the product’s first-to-market status ex-US.

4. GLP-1 agonist Bydureon (exenatide once-weekly) posted $142 million in sales in 4Q16 – an 8% YOY decrease. Sales were flat YOY for the full year, at $578 million. Very notably, management confirmed that the long-awaited auto-injector suspension formulation of Bydureon will be submitted to the FDA in 1H17, and also highlighted that the drug met its primary endpoint in the DURATION-7 study (Bydureon + basal insulin vs. basal insulin alone). AZ remains confident in Bydureon’s future growth prospects – management cited rapid growth for the GLP-1 agonist class as a whole, and the company’s presentation slides remind us that EXSCEL cardiovascular outcomes data will read out and be submitted to regulatory authorities in 2018.

5. Revenue from AZ’s older GLP-1 agonist Byetta (exenatide twice-daily) totaled $55 million in 4Q16 – a 24% YOY drop as reported (22% in constant currencies) – and $254 million for the year – a 20% YOY decline as reported (19% in constant currencies). Sales also fell 10% sequentially between 3Q16 and 4Q16.

6. Sales of DPP-4 inhibitor Onglyza (saxagliptin) fell 22% YOY as reported and 21% operationally to $149 million in 4Q16. Looking at full year revenue, sales fell 8% YOY as reported and 6% operationally to $720 million in 2016. Management acknowledged that SGLT-2 inhibitors – particularly Farxiga – are taking share in the type 2 diabetes market from DPP-4 inhibitors – particularly Onglyza.

7. Pooled revenue from all major DPP-4 inhibitor products on the market was $2.4 billion in 4Q16, marking a 2% YOY rise and a 4% sequential decline. This modest increase closely follows the trend we’ve noticed of single-digit class growth throughout 2016. Onglyza captured 6% of the market by value in 4Q16; Merck’s Januvia (sitagliptin) franchise maintained its position as clear class leader, holding 64% of market share by value.

Pipeline Highlights

8. Management briefly highlighted that an FDA decision for the resubmission of fixed-dose combination saxagliptin/dapagliflozin is expected in 1H17, with US launch slated for 2H17 if all goes according to plan. This product, combining DPP-4 inhibitor Onglyza with SGLT-2 inhibitor Farxiga, is available in the UK under brand name Qtern and will hopefully be launched in other European countries in 2017 as well (EMA-approved in 2Q16).

9. While not discussed on the call, AZ’s clinical trials appendix revealed new details on the phase 3 investigation of Farxiga in chronic kidney disease (first announced during the company’s 3Q16 update, to our great excitement!). The 24-week DERIVE study will enroll 302 participants with type 2 diabetes and moderate renal impairment, evaluating 10 mg daily dapagliflozin vs. placebo. Data is expected in 2H17 – and we can’t wait.

10. We noticed on AZ’s pipeline page that AZD4076, a candidate for the treatment of NASH, has moved into phase 2 after a phase 1 trial wrapped-up in 4Q16. The phase 2 study will enroll ~51 patients with type 2 diabetes and NASH, and will investigate the safety and efficacy of three different doses of AZD4076 injection. According to the company’s clinical trial updates presentation, the first patient for the phase 2 investigation was dosed in 3Q16.

Financial Highlights

1. Overall Diabetes Portfolio: Single-Digit YOY Growth to $598 Million in 4Q, $2.4 Billion in 2016; AZ Will Not “Play Defense”

AZ’s overall diabetes portfolio posted $598 million in sales in 4Q16, which represents 2% year-over-year (YOY) growth as reported and 1% sequential decline. Revenue from all diabetes products for 2016 totaled $2.4 billion – a 9% YOY increase as reported (11% in constant currencies). Management attributed this strong full year performance to a 5% increase in US diabetes sales, a 15% increase in EU diabetes sales, and most notably, a 25% increase in diabetes revenue from emerging markets. As in 3Q16, management characterized the diabetes portfolio as a bright spot within AZ’s overall pharmaceutical business, despite modest YOY growth for the quarter and a very slight sequential drop in global diabetes sales. Management assured that the company will not “play defense” when it comes to diabetes, refusing to yield to competitive pressures and instead capitalizing on SGLT-2 and GLP-1 class growth to drive forward Farxiga (dapagliflozin) and Bydureon (exenatide once-weekly). Notably, SGLT-2 inhibitor Farxiga was the sole driver of growth for AZ Diabetes in 4Q16, and sales of GLP-1 agonist Bydureon actually fell 8% YOY, but the company has exciting developments coming up that could bolster both franchises… more on this below! Ultimately, we’re happy that management’s outlook for the diabetes business in 2017 and 2018 is definitely positive, which will hopefully translate to continued growth for Farxiga and a resurgence of growth for Bydureon.

Figure 1: Total Sales for AZ’s Diabetes Portfolio (4Q12-4Q16)

2. Farxiga Shows Blockbuster Potential; Sales up 70% YOY to $835 Million for Full Year 2016

Sales of Farxiga (dapagliflozin) grew 57% YOY to $239 million in 4Q16. The SGLT-2 inhibitor brought in $835 million in revenue for 2016 – marking impressive 70% YOY growth as reported and 72% YOY growth in constant currencies. This growth is even more impressive in the context of the high base for Farxiga – as management put it, “an $800 million product growing 72% per year is very exciting.” At this rate, management forecasted that the franchise could hit $1 billion blockbuster status in 2017. During the call, management reiterated that Farxiga overtook DPP-4 inhibitor Onglyza (saxagliptin) as AZ’s leading diabetes medicine in 3Q16 – the drug remains comfortably in this no. 1 position, bringing in more revenue in 4Q16 than Onglyza, Bydureon (exenatide once-weekly), or Byetta (exenatide twice-daily). In fact, management acknowledged that SGLT-2 inhibitors are taking share in the type 2 diabetes market from DPP-4 inhibitors, reflecting a concession that Farxiga sales likely cannibalized some Onglyza sales in 4Q16 and will likely continue to do so going forward. We first heard commentary along these lines during the company’s 2Q16 update, when management suggested that AZ would position Farxiga as the preferred option for patients switching off of DPP-4 inhibitor therapy onto SGLT-2 inhibitor therapy. Remarks made during the 4Q16 call further affirm that the focus in 2017 will favor Farxiga over Onglyza (that SGLT-2 inhibitors are “taking share” from DPP-4 inhibitors “is something we’ll be heavily focusing on in 2017”). Management discussed Farxiga not only within the context of diabetes, but as an important piece of AZ’s overall pharmaceutical business, and as one of the factors offsetting loss of patent exclusivity in other disease areas. Farxiga sales rose remarkably across all regions in 2016, including the US, Europe, and emerging markets. Approval in China is expected in 1H17, and management described how Farxiga’s launch in China could further accelerate the company’s progress in emerging markets.

Figure 2: Farxiga/Forxiga Sales (1Q13-4Q16)

3. Pooled Analysis: SGLT-2 Inhibitor Sales Reach $840 Million (up 48% YOY); Farxiga Leads Market by Volume

In 4Q16, the SGLT-2 inhibitor class grew 48% YOY and 21% sequentially to $840 million from approximately $570 million; full year 2016 sales for the class grew 44% YOY to $2.9 billion, up from $1.98 billion in 2015. Farxiga captured 28% of this market by value and drove the double-digit growth alongside Lilly/BI’s Jardiance (empagliflozin), which grew five-fold YOY in 4Q16 and captured 27% of the market by value. While J&J’s Invokana (canagliflozin) continues to lead the class in quarterly revenue (with 44% of the market share by value), the product’s sales were flat YOY in 4Q16. Invokana has been losing market share to Farxiga and Jardiance throughout 2016, and its 44% of the market by value in 4Q16 represents a steady declined from 47% in 3Q16, 54% in 2Q16, and 54% in 1Q16. Notably, these value share estimates are based on our calculated estimations for total Jardiance revenue, since only Lilly’s share (and not BI’s) is reported publically. Double-digit growth in pooled SGLT-2 inhibitor sales is good news to close out the year – we see tremendous potential for these glucose-lowering, potentially cardioprotective agents to benefit a substantial subset of the type 2 diabetes population. Indeed, we expect that positive EMPA-REG OUTCOME results for Jardiance leading to the recent FDA approval of a new Jardiance indication for the reduction of cardiovascular (CV) death, in conjunction with the potential for a cardioprotective class effect for SGLT-2 inhibition, have all contributed to the overall class growth. Additionally, a number of diabetes treatment guidelines have been updated to reflect a preferred position for Jardiance in patients with type 2 diabetes and existing cardiovascular disease, most notably the ADA 2017 Standards of Care. That said, the growth of the SGLT-2 inhibitor class in 2016 is a noticeable plateauing in sales compared to the 2.5-fold growth in 2015 from $801 million in 2014. 3Q16’s 33% YOY class growth for SGLT-2 inhibitors was particularly underwhelming, with EMPA-REG OUTCOME results out for ~one year at that point. And, while we’re happy about 48% YOY growth for 4Q16, the slope on this upward trajectory could be even steeper in the context of CVOT data. Of course the label update stemming from EMPA-REG OUTCOME was approved late in 4Q16 – perhaps this will have a greater impact on the class as a whole going forward, now that a CV indication is more readily accessible for busy patients and providers. Indeed, Lilly has long described both the label update and an update to diabetes treatment guidelines as inflection points that will catalyze growth for both Jardiance and the SGLT-2 inhibitor class as a whole. Farxiga’s CVOT DECLARE is expected to complete in April 2019, while the CANVAS CVOT for Invokana is expected to report at ADA 2017. We imagine (and hope!) that additional support for the link between SGLT-2 inhibition and CV risk reduction will spark even greater uptake of these newer agents.

• AZ management emphasized that Farxiga leads the SGLT-2 inhibitor class by volume, with a 42% share of total prescriptions (TRx) as of November 2016. According to the company’s presentation slides, Invokana and Jardiance both hold ~25% TRx share. Management pointed out that Farxiga has been able to maintain a “stability of volume even in the face of growing competition,” which is definitely noteworthy – where the Invokana business may be suffering somewhat under the rise of Jardiance as the first diabetes drug with a CV indication, the Farxiga business sustained impressive, positive growth in 2H16. We imagine that Farxiga’s stronghold on volume share is largely driven by the product’s first-to-market status ex-US, where later-to-market products in the same class often face greater reimbursement challenges as they must often demonstrate a differentiated benefit on top of currently available medications in many markets. That said, we imagine that Jardiance may pose a greater challenge to Farxiga’s market-leading status outside of the US, now that it is armed with an EMA-approved indication for the reduction of cardiovascular death and can claim an additional benefit above that provided by Farxiga.

Figure 3: Pooled SGLT-2 Inhibitor Sales (1Q13-4Q16)

4. Bydureon Revenue Down 8% YOY to $142 Million; continues to Face Tough Competitive Pressure

GLP-1 agonist Bydureon (exenatide once-weekly) posted $142 million in sales in 4Q16 – an 8% YOY and 2% sequential decrease, both easy comparisons as Bydureon revenue fell 4% YOY in 4Q15 and fell 7% sequentially in 3Q16. Sales declined in 4Q16 across the US, Europe, and emerging markets, and were flat YOY for the full year, at $578 million. A second consecutive quarter of decline for Bydureon is disappointing in the context of a rapidly growing GLP-1 agonist class overall, and it is apparent that AZ’s GLP-1 agonists are struggling against in-class competition. That said, management spoke to the opportunity it sees in Bydureon and highlighted several bright spots:

• Management confirmed that the long-awaited auto-injector suspension formulation of Bydureon will be submitted to the FDA in 1H17. This was major news during the AZ’s 3Q16 update, and we’re glad that this regulatory filing remains on schedule. The new iteration of Bydureon would support once-weekly dosing, as the current formulation does, but without the need for a lengthy reconstitution process prior to injection. Bydureon’s complicated administration has been a significant drawback for the product, considering the rave reviews that Lilly’s Trulicity has received for its easy-to-use, extremely patient-friendly auto-injector pen. A new Bydureon pen that simplifies the patient experience by eliminating the need for reconstitution has been long-awaited, years in the making, and we can’t wait to see it come to fruition.
• Management further highlighted that Bydureon met its primary endpoint in the DURATION-7 study (Bydureon + basal insulin vs. basal insulin alone). This comes on the heels of full results from the DURATION-8 trial, presented at EASD 2016, supporting the efficacy of Farxiga/Bydureon co-administration. We’d love to see more detailed data on DURATION-7 – no further information was provided. We’re curious if this may signal a move on AZ’s part toward greater promotion of Bydureon as an add-on to basal insulin, rather than largely as a first injectable pre-insulin. We imagine that AZ may be feeling the pressure from newly-available basal insulin/GLP-1 agonist fixed-ratio combinations (Novo Nordisk’s Xultophy [insulin degludec/liraglutide] and Sanofi’s Soliqua [insulin glargine/lixisenatide]), which have already been incorporated into the ADA’s Standards of Care. The other major GLP-1 agonist company, Lilly, is already working on an (albeit very early stage) combination of its own. AZ’s certainly has a disadvantage on this front, given its lack of experience in the insulin field – we do wonder if there may eventually be interest in teaming up with newcomer to the insulin market Merck…
• The company’s presentation slides remind us that EXSCEL cardiovascular outcomes data will read out and be submitted to regulatory authorities in 2018. Notably, the REWIND CVOT for Lilly’s Trulicity is also expected to complete in April 2018, while the LEADER trial for Novo Nordisk’s Victoza has already demonstrated compelling CV benefits – EXSCEL results will likely be crucial for the future success of Bydureon as it continues to face tough in-class competition, and as CVOT results continue to gain central importance for all diabetes therapies.

Figure 4: Bydureon Sales (3Q12-4Q16)

5. Byetta Revenue Falls (Once Again); Down 24% YOY to $55 Million in 4Q16

Revenue from AZ’s older GLP-1 agonist Byetta (exenatide twice-daily) totaled $55 million in 4Q16 – a 24% YOY drop as reported (22% in constant currencies) – and $254 million for the year – a 20% YOY decline as reported (19% in constant currencies). Sales also fell 10% sequentially between 3Q16 and 4Q16. This marks the fourth consecutive quarter of YOY decline for Byetta (sales dipped 31% YOY in 1Q16, 7% YOY in 2Q16, and 15% YOY in 3Q16). Zooming out, the Byetta business has been trending down with near consistency since 2Q14 – some of these sales have gone instead to AZ’s newer GLP-1 agonist Bydureon (which offers a more convenient patient experience with less frequent dosing), while others have been lost to in-class competitors (namely Novo Nordisk’s Victoza and Lilly’s Trulicity).

Figure 5: Byetta Sales (3Q12-4Q16)

6. Onglyza Sales Dip to $149 Million, a Low Point in Recent History

Sales of DPP-4 inhibitor Onglyza (saxagliptin) fell 22% YOY as reported and 21% operationally to $149 million in 4Q16. Notably, this is the lowest quarterly revenue for the franchise in recent history (see the graph below). US sales totaled $72 million, reflecting 27% YOY decline, while international sales totaled $77 million, reflecting 18% YOY decline. Looking at full year revenue, sales fell 8% YOY as reported and 6% operationally to $720 million in 2016. While there certainly remains an important role for DPP-4 inhibitors to play in diabetes care – particularly for elderly patients and those with renal impairment, who are limited in their use of newer agents like GLP-1 agonists and SGLT-2 inhibitors – products in this class seem to be facing significant competition from more efficacious therapies (from a glucose-lowering or additional benefit perspective). AZ management even acknowledged a willingness to let Farxiga sales cannibalize some Onglyza sales in 4Q16 and going forward. According to the company’s 2Q16 update, AZ will be strategically positioning Farxiga as the preferred option for patients switching off of DPP-4 inhibitor therapy onto SGLT-2 inhibitor therapy.

Figure 6: Onglyza Franchise Sales (4Q12-4Q16)

7. Pooled Analysis: DPP-4 Inhibitors Show Another Modest, Single-Digit Increase – up 2% YOY to $2.4 Billion in 4Q16

Pooled revenue from all major DPP-4 inhibitor products on the market was $2.4 billion in 4Q16, marking a 2% YOY rise and a 4% sequential decline; full year 2016 DPP-4 inhibitor sales totaled $9.7 billion, a modest 4% YOY increase from $9.3 billion for 2015. Merck’s Januvia (sitagliptin) franchise continues to dominate the class, and the frontrunner held 64% of the market by value in 4Q16. Coming in second was Novartis’ Galvus (vildagliptin) with 13% market share, followed by Lilly/BI’s Tradjenta (linagliptin) with 12%, Onglyza with 6%, and finally Takeda’s Nesina (alogliptin) with 5%. Note that these value share estimates are based on our calculations for total Tradjenta revenue, since only Lilly’s share (and not BI’s) is reported publically. On the whole, DPP-4 inhibitors have experienced fluctuating sales in the past couple years due to competition from GLP-1 agonists and SGLT-2 inhibitors, as well as US pricing pressures affecting diabetes. Our pooled analyses from 1Q16, 2Q16, and 3Q16 showed similar, single-digit YOY growth for the class.

• In contrast to AZ management’s displaced focus from Onglyza to Farxiga, other companies with DPP-4 inhibitors in their portfolios have outlined specific strategies to boost uptake. Novartis management, for instance, has previously described a three-pronged plan to promote Galvus to the elderly, to individuals with renal impairment, and to all type 2 diabetes patients earlier in the course of disease. Januvia, along with fixed-dose combination Janumet (sitagliptin/metformin), remain critical components of Merck’s overall pharmaceutical business.

Figure 7: Pooled DPP-4 Inhibitor Sales (1Q07-4Q16)

Pipeline Highlights

8. SGLT-2/DPP-4 Fixed-Dose Combination Awaits FDA Approval, Expected in 1H17

Management briefly highlighted that an FDA decision for the resubmission of fixed-dose combination saxagliptin/dapagliflozin is expected in 1H17, with US launch slated for 2H17 if all goes according to plan. This product, combining DPP-4 inhibitor Onglyza with SGLT-2 inhibitor Farxiga, is available in the UK under brand name Qtern and will hopefully be launched in other European countries in 2017 as well (EMA-approved in 2Q16). The FDA issued a Complete Response Letter (CRL) for saxa/dapa in October 2015 that, in part, requested more clinical data “to support various dosing regimens” according to management – this was quite disappointing and we hope the approval this time around is swift. Management previously emphasized that the CRL was not due to concerns about heart failure or DKA, and that the resubmission includes data from a new trial, one discussed closely with the FDA. If approved, Qtern will be the second DPP-4 inhibitor/SGLT-2 inhibitor combination in the US, following Lilly/BI’s Glyxambi (linagliptin/empagliflozin; approved February 2015). Qtern was the first such combination to reach the EU, following its approval in July. Despite its second-to-market status, we expect Qtern could do quite well in the US if AZ invests dutifully in promotion, marketing, and access for the product. Though sales of Glyxambi haven’t been confidence-inspiring so far in terms of demonstrating enthusiasm for this class, we think AZ is uniquely positioned to make such a fixed-dose combination commercially successful. AZ has a smaller diabetes portfolio than Lilly, and Farxiga is clearly a priority, so we anticipate that the company will have more capacity and resources to devote to Qtern development vs. Lilly’s resources allocated to Glyxambi.

9. Phase 3 DERIVE Study of Farxiga in ckd NOW UNDERWAY

While not discussed on the call, AZ’s clinical trials appendix revealed new details on the phase 3 investigation of Farxiga in chronic kidney disease (first announced during the company’s 3Q16 update, to our great excitement!). The 24-week DERIVE study will enroll 302 participants with type 2 diabetes and moderate renal impairment, evaluating 10 mg daily dapagliflozin vs. placebo. Data is expected in 2H17. We eagerly look forward to this read out. J&J is also investigating Invokana in a similar patient population, with the CANVAS-R and CREDENCE trials ongoing, expected to complete in mid-2017 and 2019, respectively. This illustrates the increasing importance of renal outcomes data for agents in this class (and, for type 2 diabetes therapies more generally). We’re also extremely pleased to see AZ’s interest in addressing this area of immense unmet need – see our diabetic nephropathy competitive landscape for an overview of other ongoing projects in the field, as well as a look at the unfortunately high attrition rate in recent quarters. We also learned from AZ management during the 3Q16 update about a planned phase 3 trial of Farxiga in patients with congestive heart failure. This one is not listed in the clinical trials appendix, though we hope for more information soon. Of note, Lilly is conducting two trials of Jardiance in patients with heart failure with and without diabetes – one of the trials will evaluate impact on patients with reduced ejection fraction while the other will evaluate its impact on preserved ejection fraction.

10. NASH Candidate Moves into Phase 2

We noticed on AZ’s pipeline page that AZD4076, a candidate for the treatment of NASH, has moved into phase 2 after a phase 1 trial wrapped-up in 4Q16. The phase 2 study will enroll ~51 patients with type 2 diabetes and NASH, and will investigate the safety and efficacy of three different doses of AZD4076 (an anti-miR103/107 oligonucleotide injection). According to the company’s clinical trial updates presentation, the first patient for the phase 2 investigation was dosed in 3Q16. AZ now joins a list of big name pharmaceutical companies that have sharpened focus on NASH of late (Novartis recently outlined several NASH compounds in its pipeline, Novo Nordisk management has initiated a phase 2 trial of once-daily injectable GLP-1 agonist semaglutide in NASH, etc.). This is terrific, in our view. NASH is a challenging therapeutic area to be sure, but such an important one that is so relevant to type 2 diabetes (a common, under-treated comorbidity). It’s disappointing that no products are yet approved for the treatment of NASH, but investment in this area from companies like AZ with strong experience in clinical and commercial development of pharmacotherapies makes us more optimistic. See our NASH competitive landscape for the complete picture.

Table 3: AZ’s Diabetes Pipeline

Questions and Answers

Q: It seems that pricing power is better in the GLP-1 segment than in the insulin segment. Is there something structural about the GLP-1 segment that makes it different? Do you expect that to continue?

A: In diabetes, we're going to face increasing pricing pressure. We're staying focused to see how this continues to evolve. Right now, we feel very confident in both Farxiga and Bydureon. Insulin prices have gone up substantially over the last 10 years, and there’s the additional dimension of the introduction of biosimilars – Lilly has been aggressive about launching its basal insulin analog. These dynamics are entirely different from what you see now in GLP-1.

Q: Can you remind us – is there any interim look at the cardiovascular outcomes study for Bydureon?

A: The large CVOTs have independent data monitoring committees and interim analyses, but we don’t give detail about those when they are happening. It’s hard because these trials are event-driven, and the data monitoring committees don’t necessarily communicate if they don’t feel they need to. But yet, EXSCEL has all the normal structures of a large CVOT.

Q: On Farxiga, how might competitive dynamics change going forward in the US, given that Jardiance now has a proper CV indication on the label?

A: The data that our competitor has published is important data. In the limited patient group that this new indication is focused on, which is a minority of all diabetes patients, it had an important benefit. But the question is, why hasn’t that had a bigger impact on the overall SGLT-2 class growth rate? First and foremost, the question many physicians ask is: “what do I need to do to get glucose under control?” Then, “how safe is this going to be vs. DPP-4s?”. We need to look at what is going to get physicians to really understand that the SGLT-2 is the better choice after metformin, because of the great glycemic control, weight loss, and the potential of CV benefit. Over the next couple of years, we’ll get more CV data, both in clinical trials and real world outcomes, and we will see a significant change in the SGLT-2 class growth. Ultimately, the company that can really sell to the physician is going to be successful. We think we’ve got a great set of messages, and a great story about why Farxiga is the better choice after metformin before DPP-4s. Then, we’ll see where DECLARE comes in.

-- by Payal Marathe, Helen Gao, and Kelly Close