Memorandum

2Q20 Industry Roundup – Diabetes market falls 1% YOY to $13.7B, buoyed by OUS market; GLP-1s (+16% YOY to $2.8B), CGM (+29% YOY to $1.3B), and SGLT-2 inhibitors (+13% YOY to $1.4B) remain bright spots - September 4, 2020

Executive Highlights

  • The diabetes drug and device aggregate market totaled $13.7 billion in 2Q20, down ~1% YOY and 4% sequentially. While this is the first quarter of negative YOY growth in recent history, it does not come as a major surprise given the challenges of COVID-19. Despite the overall decline, certain sectors of the diabetes ecosystem continue to grow robustly: by share of growth, GLP-1s, CGM, SGLT-2 inhibitors, and GLP-1/basal insulin fixed-ratio combinations all had positive gains. These gains however were outweighed by weak sales in insulin, DPP-4 inhibitors, BGM, and “other” technologies. 

    • In order of size of revenue, the public diabetes ecosystem that we follow includes insulin, GLP-1 inhibitors, DPP-4 inhibitors, SGLT-2 inhibitors, CGM, insulin delivery, obesity, BGM (low in our model as only two public companies are included), and other areas (this miscellaneous technology category includes BD and Livongo).

    • The OUS market again outperformed the US, growing +2% YOY vs. -4% YOY, with similar revenue in both geographies. More specifically, the OUS market totaled $7.0 billion, compared to $6.7 billion in the US. These geographic divides were reflected in key markets, such as insulin (-20% YOY to $2 billion in the US vs. -1% YOY to $2.6 billion OUS) and SGLT-2 inhibitors (-1% YOY to $696 million in US vs. +31% YOY to $720 million OUS).

    • We make several assumptions when determining market size that are explained throughout, given that geographic results aren’t always disclosed (e.g., Medtronic’s 670G sensors, Sanofi’s GLP-1/basal combo, Soliqua). As well, the US results are slightly overstated given that some companies announce, “North America” rather than “US.” Finally, while BGM registers a decline in our model, and in this report, that just reflects the two public companies left in the category, Abbott and Roche. There is heaps of growth in other areas of BGM, particularly in terms of volume and also at private companies.

  • Growth: Overall growth from 2Q19 to 2Q20 totaled $823 million, with GLP-1 adding by far the most (+$377 million, 45% share of growth), followed by CGM (+$286 million, 34% share of growth), SGLT-2 inhibitors (+$159 million, 20% share of growth), and GLP-1/basal insulin fixed-ratio combinations (+$1 million, 1% share of growth). The $823 million in overall growth was offset by ~$895 million in overall declines, highlighted a $533 million decline in the insulin injectables market (60% share of decline) and a $340 million decline in the DPP-4 market (38% share of decline). With the declines slightly outpacing growth, the overall diabetes market fell ~$72 million, or less than 1% YOY.  

  • CGM: CGM revenue in 2Q20 hit a record $1.28 billion, rising 29% YOY on a very tough comparison to 45% YOY growth in 2Q19. Despite the strong quarter, 29% YOY growth actually represents the lowest YOY growth rate since 2013, a testament to the momentum behind CGM and its ever-increasing base. Abbott continues to lead the market, with FreeStyle Libre sales of $592 million in 2Q20, rising 37% YOY. Dexcom reported sales of $452 million in the quarter, rising 34% YOY. We estimated Medtronic’s CGM revenue at $230 million in the quarter, rising 7%. Finally, Senseonics continues to face major headwinds from COVID-19 and a difficult cash position. The company reported $260,000 in revenue in 2Q20, representing a >90% YOY decline.

  • Insulin pumps: Insulin pump revenue totaled $679 million in 2Q20, declining 1% YOY on a difficult comparison to 14% YOY growth in 2Q19. By geography, US revenue grew 2% YOY to $366 million, while international revenue fell 5% YOY to $312 million. The YOY decline in international markets is the first decline in three years; undoubtedly, pump sales were affected by COVID-19 in the quarter. By market share, Medtronic continues to lead with 49% share of revenue. In 2Q20, Insulet reported record revenue of $202 million (+26% YOY), representing a nearly 30% share of the total pump market. Tandem also reported record revenue in 2Q20 - $109 million (+17% YOY) represents about 16% market share.

  • BGM and “Other” diabetes technology: For the two remaining public companies in BGM, Abbott and Roche, we estimated BGM revenue at $546 million, declining another 12% YOY on an easy comparison to a 41% YOY decline in 2Q19. Perhaps the most notable news from the quarter in BGM came from a private company: BGM giant Ascensia Diabetes Care (user base of “10 million patients” globally) signed a deal with Senseonics, securing exclusive distribution rights for the implantable Eversense CGM. Our “Other” diabetes technology category recorded $376 million in revenue in 2Q20. This category includes BD’s pen needle business, Insulet’s non-diabetes Omnipod revenue, and Livongo’s coaching membership revenue. Livongo made, by far, the biggest splash, reporting record revenue of $92 million (+125% YOY) from over 410,000 Livongo for Diabetes members and a blockbuster “merger” (read: acquisition) with telemedicine giant Teledoc on the same day. Going forward, we’ll determine if this is better to put this revenue from Livongo in BGM – we know there are many components of BGM that are growing very meaningfully and are not being publicly reported.

  • GLP-1: GLP-1 agonist sales rose 16% YOY to $2.75 billion in 2Q20, with US sales (+16% YOY to $2.1 billion) comprising the bulk of the market’s total revenue. Though lower in revenue, international markets also saw a 13% increase YOY to $673 million, albeit with a 9% sequential decline. Novo Nordisk’s GLP-1 agonist franchises remain the market leaders with Ozempic (+108% YOY to $714 million), Victoza (-22% YOY to $625 million), and Rybelsus (+55% Q/Q to $52 million). Lilly’s Trulicity is the top grossing standalone franchise, with total sales of $1.2 billion up 20% YOY and flat sequentially. When including 50% of revenue from basal/GLP-1 fixed ratio combinations, total GLP-1 sales for the quarter amount to $2.8 billion (+16% YOY, -3% sequentially).

  • SGLT-2 Inhibitors: Total SGLT-2 inhibitor sales came in at $1.4 billion in 2Q20, with sales up 13% YOY and 1% sequentially. Sales in the US fell 1% to $696 million, while OUS rose 31% to $720 million. Lilly/BI’s Jardiance remains the class leader, though AZ’s Farxiga showed the strongest YOY growth (+18% YOY to $443 million) and seems to be closing the gap with each quarter.

  • Insulin: Insulin sales totaled $4.6 billion, falling 10% YOY and 11% sequentially. This is the lowest revenue we have seen for insulin since 3Q12 at $4.5 billion, though somewhat unsurprising, given patient destocking from 1Q20 and fewer medication initiations due to COVID-19. As in 1Q20, we saw a tale of two diverging geographies: US insulin sales of $2 billion fell 20% YOY, while OUS insulin sales remained relatively flat at $2.6 billion (-1% YOY).

  • Basal Insulin/GLP-1 Agonist Fixed Ratio Combination. The basal insulin/GLP-1 agonist fixed-ratio combinations (FRCs) hit $127 million in sales, up 7 % YOY from 2Q19 and down 8% Q/Q from 1Q20. As a result of poor performance in international markets, Novo Nordisk’s Xultophy fell to a 67% share of market from 71% in 1Q20. Sales for Sanofi’s Soliqua soared to $42 million in 2Q20 (up 36% YOY and 3% Q/Q), which we suspect to be a result of greater HCP attention and the drug’s June 2020 launch in Japan.

  • DPP-4 Inhibitors: The DPP-4 inhibitor class totaled $2.1 billion in 2Q20, down 14% YOY and 2% sequentially. As with last quarter, Lilly/BI’s Tradjenta drove the decline, falling the most at 50% YOY and 18% sequentially to $214 million. By product, Januvia tops the market at 64% share, followed by Novartis’ Galvus (13%), Tradjenta (10%), Takeda’s Nesina (7%), and AZ’s Onglyza (5%).

  • PCSK9 Inhibitors: PCSK9 inhibitor portfolio sales totaled $287 million in 2Q20, up 27% YOY from 2Q19 and down 7% Q/Q from 1Q20. While Amgen’s Repatha (evolocumab) suffered sequential declines as a result of price reductions and COVID-19-related effects, it continued to capture ~80% share of NBRx and 70% share of total revenue. Regeneron’s Praluent (alirocumab) showed meaningful growth in 2Q20, increasing 18% YOY and 9% Q/Q to $87 million.

  • Obesity: Obesity portfolio sales fell 17% YOY and 15% sequentially to $226 million. Novo Nordisk’s Saxenda (liraglutide 3.0 mg) continues to dominate sales ($193 million). Revenue for Vivus’ Qsymia remains flat at an estimated $9 million after acquisition from IEH Biopharma, and revenue for Arena/Eisai’s Belviq stays at $0 following  removal from the US market due to elevated cancer risk.

Diabetes Technology

Continuous Glucose Monitoring

CGM revenue in 2Q20 hit a record $1.28 billion, rising 29% YOY on a very tough comparison to 45% YOY growth in 2Q19. Despite the strong quarter, 29% YOY growth actually represents the lowest YOY growth rate since 2013, a testament to the momentum behind CGM and its ever-increasing base. Though difficult to quantify, we’d also guess some headwinds from COVID-19 on CGM sales. The US and international CGM markets remain close, with US revenue totaling $668 million (+35% YOY) and OUS revenue totaling $607 million (+23% YOY). Sequentially, revenue in 2Q20 rose 2% from 1Q20.

  • Abbott continues to lead the market, with FreeStyle Libre sales of $592 million in 2Q20, rising 37% YOY. Likely with pressure from COVID-19, 2Q20 represented the lowest YOY growth rate for FreeStyle Libre and the first recorded sequential decline – sales in 2Q20 fell 2% sequentially from the record $604 million in 1Q20. Dexcom reported sales of $452 million in the quarter, rising 34% YOY. Dexcom revenue in 2Q20 came ~$10 million short of the record $463 million in 4Q19. We estimated Medtronic’s CGM revenue at $230 million in the quarter, rising 7%. Given the slower growth rate, our model continues to suggest Medtronic’s share of the CGM market is shrinking; in 2Q20, we estimated Medtronic with 18% of the market. Finally, Senseonics continues to face major headwinds from COVID-19 and a difficult cash position. The company reported $260,000 in revenue in 2Q20, representing a >90% YOY decline.

  • In the pipeline, Abbott’s launch of FreeStyle Libre 2 in the US headlined the quarter. The long-awaited launch brings Bluetooth connectivity, alarms, and improved accuracy to the already popular FreeStyle Libre franchise and given the pricing parity, should only accelerate CGM uptake. For Dexcom, there were no meaningful updates to pivotal trial timing for G7, which has been on hold during the COVID-19 pandemic. Senseonics made a splash with its 2Q20 update, headlined by a major agreement with Ascensia Diabetes Care to hand over global distribution rights for Eversense to Ascensia. Much of the agreement hinges on regulatory approval for the 180-day Eversense product, which is expected to be submitted to the FDA in the “coming weeks” with approval expected in “early 2021.” Finally, Medtronic continues to advance on its CGM pipeline with the US pivotal trial for Synergy (fully disposable, day 1 calibration) now underway.

  • Quarterly reports: Abbott 2Q20, Dexcom 2Q20, Medtronic 2Q20, Senseonics 2Q20

CGM Sales by Geography (1Q12-2Q20)


CGM Sales by Company (1Q12-2Q20)

Abbott, Dexcom, Medtronic (estimated), and Senseonics

Total market, Abbott, Dexcom, Medtronic (estimated), and Senseonics

2Q20

Revenue (millions)

YOY change

Sequential change

Market share (by revenue)

Abbott

$592

+37%

-2%

46%

Dexcom

$452

+34%

+12%

36%

Medtronic (est.)

$230

+7%

-4%

18%

Senseonics

$0.26

-94%

+650%

<1%

Total

$1,275

+29%

+2%

--

Model Assumptions

  • Abbott reported FreeStyle Libre growth rate, but did not break this down by geography. We estimated FreeStyle Libre made up 80% of total US revenue. This estimate matches well with qualitative commentary given and historical trends, but admittedly, some of this is conjecture.

  • We estimated Medtronic’s 2Q20 CGM revenue at $230 million, rising 7% YOY. The company’s 2q20 slide deck notes the standalone Guardian Connect CGM system grew “LDD” (low double-digits) while sales of integrated CGM (i.e., as part of MiniMed 630G, 640G, and 670G) seemingly grew much slower, partly due to impact from COVID-19. We blended total CGM growth around 7% YOY, directionally in line with recent updates and the general trend of Medtronic sales.

Insulin Pumps and Delivery Devices

Insulin pump revenue totaled $679 million in 2Q20, declining 1% YOY on a difficult comparison to 14% YOY growth in 2Q19. By geography, US revenue grew 2% YOY to $366 million, while international revenue fell 5% YOY to $312 million. The YOY decline in international markets is the first decline in three years; undoubtedly, pump sales were affected by COVID-19 in the quarter. By market share, Medtronic continues to lead with 49% share of revenue. Still, this is the lowest market share for Medtronic in our model (which dates back to 2005) and 1Q20 was the first quarter in which Medtronic did not have market share >50%. In 2Q20, Insulet reported record revenue of $202 million (+26% YOY), representing a nearly 30% share of the total pump market. Tandem also reported record revenue in 2Q20 - $109 million (+17% YOY) represents about 16% market share. Overall, the pump market continues to see slow, but steady, growth, and with several AID systems recently launched or launching soon, we’d imagine growth will accelerate, even with the COVID-19 pandemic.

  • Given the small sample size (three major players) and lack of direct comparisons, it’s difficult to gauge how much impact COVID-19 had on the insulin pump market in the quarter. In the quarter, Tandem shipped 18,687 pumps; this represents a 12% YOY decline, though on a difficult comparison to 2Q19 which saw one-time benefit from a backlog of orders. Without that benefit, we estimate pump shipments in the quarter actually rose ~5%-10% YOY. Encouragingly, Tandem also reported that “approximately half” of its new users came from MDI, consistent with trends before COVID-19 and assuaging fears that MDI to pump conversions might slow down without in-person training. On Insulet’s 2Q20 call, the company shared that new patients were down ~50% relative to Insulet’s beginning of 2020 expectations, but did not share an absolute figure. One analyst on the call estimated Insulet’s user growth from MDI conversions “down 10% or 15%” in the quarter, while he estimated Tandem’s were “flat, or even up 10%-15% YOY.” In context of a global pandemic, Tandem’s 2Q20 was certainly impressive – likely a testament to enthusiasm for Control-IQ. For their part, Insulet did share that about 80% of their new patients are coming from MDI, also consistent with previous figures. Medtronic’s performance in the quarter is the most difficult to gauge, as the company did not share a user base update for its MiniMed 670G system for the first time in recent memory (~249,000 users worldwide as of 1Q20). By our estimate, Medtronic’s pump revenue declined by 12% YOY to $332 million. However, given the stiff competition and historical trend of slow decline, it’s difficult to tease out how much of the decline in 2Q20 was driven by COVID-19. Medtronic’s slide deck for the quarter (Diabetes on slide #11) notes: “COVID-19 has resulted in delayed patient starts; continued competitive pressures in the US.”

  • Quarterly reports: Medtronic 2Q20, Insulet 2Q20, Tandem 2Q20, Roche 2Q20

Insulin Pump & Delivery Sales by Geography (1Q12-2Q20)


Insulin Pump & Delivery Device Sales by Company (1Q06-2Q20)

Medtronic (estimated), Insulet, Tandem, Roche (estimated), Valeritas, Animas

Insulet, Tandem, Roche (estimated)

2Q20

Revenue (millions)

YOY change

Sequential change

Market share (by revenue)

Medtronic (est.)

$332

-12%

+1%

49%

Insulet

$202

+26%

+6%

30%

Tandem

$109

+17%

+12%

16%

Roche (est.)

$36

-24%

-17%

5%

Total

$679

-1%

+3%

--

Blood Glucose Monitoring and “Other” Diabetes Tech

  • For the two remaining public companies in BGM, Abbott and Roche, we estimated BGM revenue at $546 million, declining another 12% YOY on an easy comparison to a 41% YOY decline in 2Q19. By geography, our model suggested similar declines of 12% YOY for both US and OUS markets, though the OUS remains significantly larger ($436 million vs. $109 million). Most of the decline in the quarter came from Roche, which saw a 15% YOY decline in its BGM business to $383 million; Abbott’s BGM business fell 4% YOY to an estimated $163 million. Perhaps the most notable news from the quarter in BGM came from a private company: BGM giant Ascensia Diabetes Care (user base of “10 million patients” globally) signed a deal with Senseonics, securing exclusive distribution rights for the implantable Eversense CGM.

  • Our “Other” diabetes technology category recorded $376 million in revenue in 2Q20. This category includes BD’s pen needle business, Insulet’s non-diabetes Omnipod revenue, and Livongo’s coaching membership revenue. Livongo made, by far, the biggest splash in the category in the quarter. First, the company reported record revenue of $92 million (+125% YOY) from over 410,000 Livongo for Diabetes members. On the same day, the company also announced a blockbuster “merger” (read: acquisition) with telemedicine giant Teledoc. The $18.5 billion deal sent shockwaves through the entire digital health landscape, with Teladoc CEO Jason Gorevic explaining the intention to “create the greatest virtual care platform on the market.”

  • Quarterly reports: Abbott 2Q20, Roche 2Q20, Senseonics 2Q20, BD 2Q20, Insulet 2Q20, Livongo 2Q20

Combined CGM and Insulin Pump Revenue

Diabetes Therapy

GLP-1 Agonists

The GLP-1 agonist class grew 16% YOY to $2.8 billion from a base of $2.4 billion in 2Q19. Sequentially, sales declined 3%. The class now comprises 43% of all revenue in the diabetes drug market, down 1% from last quarter. By geography, the US market (+16% YOY, flat sequentially to $2.1 billion) outshined the international market (+13% YOY, -9% Q/Q to $673 million). Within the GLP-1 class as a whole, next-generation GLP-1 agonist revenue totaled $2.0 billion and grew over 40% YOY, compared to the “traditional” GLP-1 category with sales of ~$800 million that declined over 20% YOY.

  • The biggest GLP-1 manufacturer for 2Q20 was Novo Nordisk with $1.4 billion in revenue (+18% YOY) and 49% of total GLP-1 agonist sales from Victoza, Ozempic, and Rybelsus. By product, Lilly’s Trulicity is still the top-earning franchise in the class (44% at $1.2 billion), followed by Novo Nordisk’s Ozempic (25% at $714 million), Novo Nordisk’s Victoza (22% at $625 million), and AZ’s Bydureon and Byetta (5% combined at $231 million). Novo Nordisk’s Rybelsus continues its upward climb, with revenue totaling $52 million (+55% Q/Q) its third quarter on the market. As a reminder, Rybelsus was approved in all 27 EU member states and the United Kingdom in April 2020 and is “well on track” for its first launches in 3Q20.
  • By volume, Trulicity continues to lead the class with 44% of US TRx market share. It is followed by Ozempic (26% TRx), Victoza (20% TRx), and Rybelsus (3% TRx). Trulicity is also the market leader in NBRx at 37%, neck and neck with Ozempic at 35% SOM. This is followed by Victoza at 12% and Rybelsus at 11%. Lilly attributed Trulicity’s 2Q20 growth to wider dosing options based on positive phase 3 AWARD-11 data shared at ADA 2020. Increased Trulicity uptake was also likely promoted by its 1Q20 primary prevention CV indication, which made it the first GLP-1 agonist approved to treat adults with type 2 diabetes without established CVD.
  • See the basal/GLP-1 Fixed Ratio Combinations section for more on pricing dynamics. This figure includes Sanofi’s Soliqua and Novo Nordisk’s Xultophy. In 2Q20, the basal/GLP-1 Fixed Ratio Combinations had combined revenue of $127 million, up nearly 10% from 2Q19 and down about $10 million from 1Q20. Adding 50% of sales from this category to our diabetes GLP-1 totals, “traditional” GLP-1 sales would rise to $820 million, down 22% YOY. See below for additional breakdowns in the US and OUS.

2Q20 GLP-1 Agonist Sales

 

Revenue (millions)

YOY Growth

Sequential Growth

Share of Market

Trulicity

$1,230

+20%

0%

44%

Victoza

$625

-22%

-15%

22%

Ozempic

$714

+108%

+2%

25%

Bydureon

$116

-18%

+16%

4%

Byetta

$15

-40%

-25%

1%

Lyxumia (est)

$0

--

--

0%

Tanzeum (discontinued)

$0

--

--

0%

Rybelsus

$52

--

+55%

2%

Basal/GLP-1

$63

+7%

-9%

2%

Total

$2,815

+16%

-3%

--

*“Basal/GLP-1” contributing to GLP-1 agonist market estimated at 50% of total Basal/GLP-1 revenue

GLP-1 Agonist 2Q20 YOY Growth Geographic Breakdown

 

2Q20 US Revenue (millions)

US YOY Growth

2Q20 OUS Revenue (millions)

OUS YOY Growth

2Q20 Worldwide Revenue (millions)

Worldwide YOY Growth

Trulicity

$953

+20%

$277

+17%

$1,230

+20%

Victoza

$355

-32%

$270

-3%

$625

-22%

Ozempic

$611

+8%

$103

-23%

$714

+108%

Bydureon

$101

-14%

$15

-38%

$116

-18%

Byetta

$7

-53%

$8

-20%

$15

-40%

Rybelsus

$52

--

--

--

$52

--

Basal/GLP-1

$27

+15%

$37

+20%

$63

+7%

Total

$2,106

+16%

$710

+14%

$2,815

+16%

GLP-1 Agonist 2Q20 Sequential Growth Geographic Breakdown

 

2Q20 US Revenue (millions)

US Sequential Growth

2Q20 OUS Revenue (millions)

OUS Sequential Growth

2Q20 Worldwide Revenue (millions)

Worldwide Sequential Growth

Trulicity

$953

+2%

$277

-8%

$1,230

0%

Victoza

$355

-21%

$270

-5%

$625

-15%

Ozempic

$611

+6%

$103

-23%

$714

+2%

Bydureon

$101

+20%

$15

-6%

$116

+16%

Byetta

$7

-36%

$8

-11%

$15

-25%

Rybelsus

$52

+58%

--

--

$52

+55%

Basal/GLP-1

$27

+8%

$37

-14%

$63

-9%

Total

$2,106

0%

$710

-10%

$2,815

-3%

GLP-1 Agonist Sales (1Q06-2Q20)


GLP-1 Agonist Sales by Geography (1Q14-2Q20)


GLP-1 Sales by Company (1Q06-2Q20)


GLP-1 US Volume Data (April 2019- July 2020)


SGLT-2 Inhibitors

The SGLT-2 inhibitor class generated $1.4 billion in sales in 2Q20, with sales up 13% YOY and 1% sequentially. Sales in the US fell 1% to $696 million, while OUS rose 31% to $720 million. Lilly/BI’s Jardiance remains the class leader, albeit with slight sequential declines (+13% YOY, -2% Q/Q to $786 million). While not formally included in our model, as neither company reports sales, we do note that Merck/Pfizer’s Steglatro (ertugliflozin) is also available. Full results from Steglatro’s last-in-class CVOT VERTIS were presented at this year’s virtual ADA conference and demonstrated non-inferiority versus placebo on the primary endpoint of three-point MACE (HR=0.97; 95% CI: 0.85-1.11; p<0.001 for non-inferiority).

  • In regulatory news, the FDA announced it would be removing the black box label for J&J’s Invokana in August 2020. Weaker performance for the Invokana franchise clearly reflects the warning was added in 2017, and we expect that sales may improve in coming quarters.

2Q20 SGLT-2 Inhibitor Sales 

 

Revenue (millions)

YOY Growth (as reported)

Sequential Growth (as reported)

Share of Market

Jardiance: estimated Lilly+BI

$794

+13%

-2%

56%

Farxiga

$443

+18%

+9%

31%

Invokana

$179

-1%

+13%

13%

Total

$1,416

+13%

-2%

--

SGLT-2 Inhibitor Sales (1Q13-2Q20)

*Total Jardiance sales (Lilly + BI) have been estimated based on previously-reported sales from BI indicating share breakdown of ~33% of sales for Lilly.

SGLT-2 Inhibitor Sales by Geography (3Q14-2Q20)

Insulin

It was a tough quarter for the total insulin market at just $4.6 billion, falling 10% YOY and 11% sequentially. This is the lowest revenue we have seen for insulin since 3Q12 at $4.5 billion, though somewhat unsurprising, given patient destocking from 1Q20 and fewer medication initiations due to COVID-19. We suspect earlier initiations in other medications like GLP-1 and SGLT-2 inhibitors are also delaying insulin starts, though we also suspect that duration of type 2 diabetes is increasing overall, and that time on insulin total for those with T2D might well be increasing also, even if starting later. As in 1Q20, we saw a tale of two diverging geographies: US insulin sales of $2 billion fell 20% YOY, while OUS insulin sales remained relatively flat at $2.6 billion (-1% YOY).

  • Looking at basal insulins, “next-gens” Toujeo and Tresiba totaled $582 million (-7% YOY), buoyed by gains in the OUS market (+11% YOY to $339 million) vs. $243 million in US sales (-25% YOY). In comparison “traditional” insulin sales for Lantus, Levemir, and Basaglar of $1.6 billion dropped a more substantial 13% YOY, with declines in both the US (-17% YOY to $812 million) and OUS market (-7% YOY to $751 million).

  • Rapid acting insulin sales of $1.7 billion also saw geographical divides. OUS sales of $1.1 billion fell just 1% YOY, while US sales of $617 million decreased 28% YOY.

  • Basal insulin/GLP-1 fixed ratio combinations remained a small but mighty bright spot in the portfolio. Taking only 50% of total sales into account for the insulin market, the category rose 7% YOY to $63 million. Growth was carried by OUS sales of $37 million, which climbed 18% YOY.

Insulin Market 2Q20 YOY Growth Geographic Breakdown

 

2Q20 Revenue (millions)

YOY Growth

Sequential Growth

Basal

$2,179

-11%

-9%

Rapid-acting

$1,712

-12%

-15%

Human

$656

-3%

-8%

Basal/GLP-1

$63

+7%

-8%

Total Insulin

$4,611

-10%

-11%

Insulin Market 2Q20 YOY Growth Geographic Breakdown

 

2Q20 US Revenue (millions)

US YOY Growth

2Q20 OUS Revenue (millions)

OUS YOY Growth

2Q20 Worldwide Revenue (millions)

Worldwide YOY Growth

Basal

$1,054

-19%

$1,125

-1%

$2,179

-11%

“Next-Gen” Basal

$243

-25%

$339

+11%

$582

-7%

“Traditional” Basal

$812

-17%

$751

-7%

$1,563

-13%

Rapid-acting

$617

-28%

$1,095

-1%

$1,712

-12%

Human

$269

-5%

$386

-2%

$656

-3%

Basal/GLP-1

$27

-5%

$37

+18%

$63

+7%

Total

$1,967

-20%

$2,642

-1%

$4,610

-10%

*“Basal” does not include 50% of GLP-1/Basal revenue included in Total Insulin Market; “Next-Gen” Basal includes Toujeo and Tresiba; “Traditional” Basal includes Levemir, Lantus, and Basaglar; “Basal/GLP-1” contributing to Insulin Market estimated at 50% of total product revenue; Afrezza estimated as US only revenue

Insulin Market 2Q20 Sequential Growth Geographic Breakdown

 

2Q20 US Revenue (millions)

US Sequential Growth

2Q20 OUS Revenue (millions)

OUS Sequential Growth

2Q20 Worldwide Revenue (millions)

Worldwide Sequential Growth

Basal

$1,054

-6%

$1,125

-11%

$2,179

-9%

“Next-Gen” Basal

$243

-10%

$339

-10%

$582

-10%

“Traditional” Basal

$812

-5%

$751

-12%

$1,563

-8%

Rapid-acting

$617

-24%

$1,095

-9%

$1,712

-15%

Human

$269

-8%

$386

-8%

$656

-8%

Basal/GLP-1

$27

+7%

$37

-17%

$63

-8%

Total

$1,967

-12%

$2,642

-10%

$4,610

-11%

*“Basal” does not include 50% of GLP-1/Basal revenue included in Total Insulin Market; “Next-Gen” Basal includes Toujeo and Tresiba; “Traditional” Basal includes Levemir, Lantus, and Basaglar; “Basal/GLP-1” contributing to Insulin Market estimated at 50% of total product revenue”; Afrezza estimated as US only revenue

Overall Insulin Sales (1Q12-2Q20)

2Q20 Basal Insulin Sales

 

Revenue (millions)

YOY Growth

Sequential Growth

Share of Market

Lantus

$763

-10%

-4%

34%

Tresiba

$318

-16%

-12%

15%

Levemir

$219

-39%

-27%

10%

Basaglar

$581

0%

-4%

27%

Toujeo

$263

+7%

-7%

12%

Ryzodeg

$34

+26%

-1%

2%

Total

$2,179

-11%

-9%

--

Basal Insulin Sales (1Q05-2Q20)

*Total Basaglar revenue is estimated from an assumed 50/50 split between Lilly/BI. Ryzodeg revenue is split 70/30 between basal insulin/rapid-acting insulin.

2Q20 Rapid-Acting Insulin Sales

 

Revenue (millions)

YOY Growth (as reported)

Sequential Growth

Share of Market

NovoLog

$604

-12%

-13%

35%

NovoMix

$348

-1%

-10%

20%

Humalog

$555

-18%

-20%

33%

Apidra

$92

-2%

-6%

5%

Admelog

$48

-44%

-12%

3%

Fiasp

$42

+2%

-27%

3%

Afrezza

$7

15%

-13%

0%

Ryzodeg

$15

+26%

-1%

1%

Total

$1,712

-12%

-15%

--

Rapid-Acting Insulin Sales (1Q05-2Q20)

*Ryzodeg revenue is split 70/30 between basal insulin/rapid-acting insulin.

DPP-4 Inhibitors

DPP-4 inhibitors generated $2.1 billion in sales in 2Q20, with sales down 14% YOY and 2% sequentially. This was the eighth quarter of negative YOY for the class as HCPs continue to prioritize GLP-1 and SGLT-2 inhibitors. Overall decreases were driven by drops in the Lilly/BI Tradjenta franchise (-50% YOY, -18% sequentially to $214 million). All franchises except Takeda’s Nesina (+10% YOY, +12% sequentially to $144 million) showcased declines. By product, Januvia tops the market at 64% SOM, followed by Novartis’ Galvus (13%), Lilly/BI’s Tradjenta (10%), Takeda’s Nesina (7%), and AZ’s Onglyza (5%).

  • This the first time Nesina has surpassed Onglyza, though both are relatively close to each other. While Takeda did not highlight any specific reasons for Nesina’s relative growth in their 2Q20 update, AZ emphasized that they continue to prioritize Farxiga over Onglyza - which may contribute to its continued decline. Overall, these dynamics could also relate to HCPs’ focus on early intervention and natural fluctuations in the DPP-4 market. 
  • The US/International breakout is another interesting story, with sharp declines in the US (-25% YOY to $712 million) and slight dips internationally (-7% YOY to $1.4 billion).

2Q20 DPP-4 Inhibitor Sales

 

Revenue (millions)

YOY Growth

Sequential Growth

Share of Market

Januvia

$1,344

-6%

+5%

64%

Tradjenta (estimated Lilly + BI)

$214

-50%

-18%

10%

Galvus

$279

-13%

-18%

13%

Onglyza

$115

-1%

-18%

5%

Nesina

$144

+10%

+12%

7%

Total

$2,096

-14%

-2%

--

DPP-4 Inhibitor Sales (1Q07-2Q20)


Basal Insulin/GLP-1 Agonist Fixed-Ratio Combination

The basal insulin/GLP-1 agonist fixed-ratio combinations (FRCs) hit $127 million in sales, up 7 % YOY from 2Q19 and down 8% Q/Q from 1Q20. Performance for Novo Nordisk’s Xultophy was lackluster in 2Q20, despite laying claim to two-thirds of the market (with Sanofi’s Soliqua taking the other third). Of note, Xultophy’s market share fell from 71% in 1Q20. While Xultophy performed well in North America (up 12% YOY to $26 million), these gains were offset by poor performance in international markets (down 18% YOY and 18% Q/Q to $59 million). We suspect Xultophy’s 3Q20 launch in China will start reversing these declines, particularly since the base is so low. On the other hand, sales for Sanofi’s Soliqua soared, likely a result of its June 2020 launch in Japan and the company’s recent efforts to promote Soliqua as a first-line therapy. Sales reached $42 million in 2Q20, up 36% YOY from 2Q19 and 3% Q/Q from 1Q20.

2Q20 Basal/GLP-1 Combination Sales

 

Revenue (millions)

YOY Growth (as reported)

Sequential Growth

Share of Market

Soliqua

$42

+36%

+3%

33%

Xultophy

$85

0%

-13%

67%

Total

$127

+7%

-8%

-

Basal Insulin/GLP-1 Agonist Combination Sales (1Q17-2Q20)

Obesity

Overall obesity market sales totaled $226 million in 2Q20, down 17% YOY and 15% sequentially. US sales dropped 7% YOY to $161 million, while international sales dropped 35% YOY to $66 million. Sales of Novo Nordisk’s Saxenda (liraglutide 3.0 mg) continue to comprise the bulk of the Obesity market with revenue totaling $193 million (-13% YOY, -17% sequentially). While we were expecting Saxenda sales to be on the upswing in 1Q20 based on upcoming Semaglutide Obesity Program (STEP) trial results, 2Q20 quarterly declines were driven by fewer patient initiations and losses in international markets (-14% YOY and -34% Q/Q to $66 million). Novo Nordisk also attributed declines to COVID-19 in Q&A, though sales currently seem to be recovering and heading toward pre-COVID levels. Saxenda currently has 61% global obesity market share.

  • Outside of the Saxenda franchise, 2Q20 proved perilous for many smaller obesity companies. Notably, Vivus (manufacturer of Qsymia) was purchased wholly by IEH Biopharma LLC in July 2020. While Vivus’ announcement stated that they will continue clinical and commercial operations for Qsymia, neither Vivus nor IEH have released quarterly reports that share Qsymia’s 2Q20 revenue. Thus, we have reported Qsymia’s revenue as stable to last quarter’s $9 million. 1Q20 saw numerous advances for Vivus and Qsymia with the launch of telehealth platform Vivus Health, enrollment completion of Qsymia’s phase 4 study in adolescents, and first international sales of Qsymia reported in South Korea. We hope to see updates from IEH on whether these programs are progressing along with financial updates on Qsymia.

  • Currax’s Contrave is in a similar position. Currax Pharmaceuticals was revamping Contrave commercialization (updated website here), after acquiring previous owner Nalpropion Phramaceuticals. According to Currax’s February 2020 update, Contrave is the leading prescribed weight loss medication in the US – we hope to see broken out sales for the product soon. Lastly, Belviq was not mentioned in any of Eisai’s 2Q20 earnings update due to its February 2020 withdrawal from markets based on elevated cancer risks in CAMELLIA-TIMI. These dynamics showcase the effects of poor reimbursement, treatment and disease stigmatization, and under-diagnosis of obesity as a treatable medical condition that play into obesity market dynamics. 

2Q20 Branded Obesity Therapy Sales

 

Revenue (millions)

YOY Growth

Sequential Growth

Share of Market

Saxenda

$193

-13%

-17%

85%

Qsymia (est)

$9

-11%

0%

4%

Contrave (est)

$25

0%

0%

11%

Belviq

$0

-100%

0%

0%

Total

$226

-17%

-15%

--

Branded Obesity Therapy Sales (1Q13-2Q20)

PCSK9 Inhibitors

Pooled revenue for the PCSK9 inhibitor class totaled $287 million in 2Q20, up 27% YOY from 2Q19 and down 7% Q/Q from 1Q20. Amgen’s Repatha (evolocumab) continued to significantly outpace Regeneron’s Praluent (alirocumab), capturing ~80% share of NBRx and 70% share of total revenue. Despite this strong foundation, Repatha’s growth was blunted by (i) COVID-19-related sales declines; and (ii) the recent reduction in list price to increase Medicare Part D access and affordability. As CVS removed Repatha from its formulary in July 2020, further declines are expected in subsequent quarters. Praluent showed meaningful growth in 2Q20, increasing 18% YOY and 9% Q/Q to $87 million. During the company’s 2Q20 update, Regeneron provided further details on its restructuring agreement with Sanofi: while Regeneron will manage Praluent sales in the US, Sanofi will handle the franchise OUS and pay Regeneron 5% royalty on net sales until March 31, 2032.

2Q20 PCSK9 Inhibitor Sales

 

Revenue (millions)

YOY Growth

Sequential Growth

Share of Market

Repatha

$200

+32%

-13%

70%

Praluent

$87

+18%

+9%

30%

Total

$287

+27%

-7%

-

PCSK9 Inhibitor Sales (1Q16-2Q20)

Industry’s Response to Black Lives Matter and Promoting Racial Equity

Though a longstanding issue, protests against racial inequity and in support of the Black Lives Matter movement have recently gained traction in mainstream America and around the world. COVID-19 has further exemplified disparities in health outcomes, with Black and Latinx populations dying from infection at disproportionately higher rates than their White counterparts. While it is tragic that a preventable global pandemic is what it took to put this large systemic issue at the forefront of American public consciousness, increased attention on this matter is a critical step toward a more equitable society.

As the pharmaceutical and technology fields represent financial behemoths, investments from these companies can largely advance the movement. We’ve performed a deep dive on the attention the diabetes therapy and technology companies we routinely cover have placed toward BLM or promoting diversity and equity in their companies. In addition to this, we explored the BLM responses of top-earning companies Microsoft, Facebook, Google, Amazon, Teva Pharmaceuticals, Biogen, Bristol Myers Squibb, and Allergan. See below for an overview of what we found. We will later update this piece with specifics on the responses of each company we explored.

We hope that investments continue as time goes on and that large companies remain aware of their responsibility to promote social good and effect actionable change. Given that diabetes prevalence rates are higher and outcomes are meaningfully worse among Black, Hispanic, and Native American communities, we envision hearing about programs launched by companies to lower this disparity in the future and promote a more equitable society.  

While we have not previously written at any length on racial justice, we see multiple initiatives that we consider to be important steps companies can take as part of their work that goes along with examples of other spoken support for BLM. We will be in touch over time as we learn more about what best-in-class public companies and private companies and other organizations are showing in terms of progress. Multiple components of successful programs may include the following:

  • Increasing patient diversity in R&D programs

  • Supporting Black, Indigenous, and POC suppliers and manufacturers

  • Researching and taking tangible steps to reduce race- and ethnicity-based health disparities

  • Partnering with BIPOC communities to include their input in company operations and initiatives

  • Using companies’ platforms to advocate for policies that: (i) expand access to medical care, insulin, and devices for BIPOC; (ii) address food insecurity, food deserts, and food swamps that disproportionately affect marginalized communities of color; and (iii) combat environmental and socioeconomic factors that drive racial disparities in diabetes

  • Researching and taking tangible steps toward reducing racial and ethnic inequities and discrimination within one’s company

  • Engaging in ongoing, multipronged diversity and inclusion training for all company members, including those at the top

  • Improving representation of BIPOC – and specifically women of color – on company boards and leadership teams

  • Investing in BIPOC organizations that work to reduce health inequities, including those working on housing inequities and education inequities that contribute to health inequities

Therapy Companies’ Responses to Black Lives Matter

In therapy, 16 companies have made reference or commitments to BLM or increasing diversity. Responses ranged from press releases supporting BLM to company-wide initiatives to donate substantial funds to the movement and reorganize executive structures to hire more BIPOC leaders. In diabetes, Lilly and Johnson & Johnson made internal commitments to promoting diversity and inclusion in their workforce, as well as external commitments by publicly supporting BLM and pledging various amounts of money to different organizations to further BLM’s mission.

  • Along with pledging $25 million and 25,000 employee volunteer hours to support the cause over the next 10 years, Lilly established the Indy Day of Solidarity on June 13th (see the program on YouTube) to work toward solutions to end racism and inequality within Indianapolis. Lilly is also partnering with local African American owned newspapers and TV and radio stations and intends to perform on-the-ground work to combat racial injustice. Internally, Lilly highlighted research projects to understand the experience of women and minorities at Lilly (Employee Journeys) and programs built to improve cultural literacy and psychological safety among Lilly employees.

  • Johnson and Johnson committed $10 million to fight racism and injustice over the next three years. J&J is also partnering with the National Museum of African American History to promote educational programs and plans to: (i) partner with additional organizations which advance social justice; (ii) combat medical care inequities that have been “highlighted and exacerbated by the COVID-19 pandemic;” (iii) address underrepresentation in clinical trials; (iv) equip community health workers; and (v) strengthen existing community medical systems. J&J also intends to focus its efforts internally with a series of listening tours and events to discuss race and racism and form an action plan for the company’s internal anti-racism work.

  • Though funding was not explicitly pledged, Novartis similarly pledged resources to the NAACP Empowerment Program to show their support of BLM and vowed to increase patient diversity in clinical trials. Also in its press release, management shared aims to continue efforts to fight diseases that affect Black communities disproportionally and promote free dialogue.

  • Outside of the diabetes field, Bristol Myers Squibb also made an impressive commitment to equity, pledging $300 million to expand diversity and inclusion and to  increase disease awareness, education, and healthcare access to improve health outcomes for the medically underserved. The company also plans to increase its spending with diverse suppliers ($1 billion globally by 2025). Internally, Bristol Myers Squibb has set 2022 goals to achieve gender parity at the global executive level and double executive representation of Black/African American and Hispanic/Latinx employees in the US. They also will expand their employee giving program to a 2-to-1 match for US employee donations to organizations that fight health disparities and discrimination.

  • While these companies above took the most initiative to support the movement and redistribute wealth, companies like Abbvie, Amgen, Daichi Sankyo, Eisai, GSK, GI Dynamics, Gilead, MerckPfizer, Takeda, Teva, and Biogen publicly released revised diversity and inclusion statements that promote greater workplace equity. We’ll be back with specifics on their responses to BLM soon.

Technology Companies’ Responses to Black Lives Matter

Technology companies responded similarly, with Microsoft, Facebook, Google, and Amazon pledging extensive funds to support BIPOC communities in diverse ways. While we hope for diabetes and medical technology companies to one day make financial contributions to the cause at this caliber, we know that these large tech companies have higher capacities to redistribute funding to social causes. Abbott, Fitbit, Medtronic, Roche, Tandem, and Ypsomed all publicly shared statements on racism, diversity, and inclusivity in the workplace – which is an integral step toward future large-scale efforts. 

  • Microsoft will pledge $150 million to diversity and inclusion, $500 million to diverse suppliers, $50 million to community partnerships for five years, $20 million to BIPOC partners, and $3 million in training programs. By 2025, Microsoft also aims to double the number of Black and African American US employees who are managers, senior individual contributors, and senior leaders in the company. Starting in FY21, all Microsoft employees will be required to partake in training on allyship, covering, and privilege in the workplace, which will include additional content on understanding the experience of Black and African American communities. Leadership (CVPs and EVPs) will be required to attend live sessions as well. Microsoft also intends to strengthen both its talent development efforts for employees of color and its company accountability on representation, as well as working with more diverse suppliers and partners to diversify its ecosystem.

  • Facebook is taking a similar, diversified investment approach. They pledged $200 million to Black-owned businesses, $1.1 billion to diverse suppliers, and $5 million to Facebook fundraisers for racial justice organizations. Along with this, they are intending to reach 2 million Black and Latinx community members with the Elevate digital skills training program, and support 100,000 Black students with scholarships from the Facebook Blueprint program. Facebook is also creating a new platform (“Lift Black Voices”) within its main app to highlight stories from Black communities and creators, educate, advocate for action, and inspire fundraising for racial justice causes.  Internally, Facebook is engaging in “new internal staffing and education drives to improve both representation and understanding.”

  • Google will also invest $175 million to advancing economic opportunities for Black business owners and developers in the Google for Startups Accelerator, with $5 million reserved for the Google for Startups Black Founders Fund. In its press release, Google also highlighted its partnerships to support the Black startup community, including those specifically in Atlanta this year (Russell Center for Innovation and Entrepreneurship and Collab Studio), and the Google for Startups Founders Academy which it formed this year.

  • Amazon donated $10 million to organizations supporting justice and equity, including NAACP, ACLU, Equal Justice Initiative, National Urban League, Thurgood Marshall College Fund, and United Negro College Fund. Based on an update from July 14, by matching $8.5 million in Amazon employee donations, Amazon donated an additional $17 million to 12 organizations selected by the Black Employee Network, as well as local education and racial equality initiatives in the communities where employees live and work. We do have to note that after this press release, Amazon received criticism from activists for its internal practices and partnerships with law enforcement.

 

--by Joseph Bell, Katie Mahoney, Ursula Biba, Albert Cai, Rhea Teng, and Kelly Close