Memorandum

Novo Nordisk discontinues GLP-1 agonist partnership with Zosano – July 8, 2015

Executive Highlights

  • Zosano Pharma announced earlier this week that Novo Nordisk has decided to discontinue the companies’ collaboration on microneedle patch delivery of GLP-1 agonists.

Zosano Pharma announced earlier this week that Novo Nordisk has decided to discontinue the companies’ collaboration on microneedle patch delivery of GLP-1 agonists. According to the press release, the decision was based on “strategic prioritization” of Novo Nordisk’s research portfolio and came despite continued progress over the course of the collaboration. All technology rights licensed to Novo Nordisk under the agreement will now revert back to Zosano. As a reminder, this agreement, announced in early 2014, granted Novo Nordisk a worldwide, exclusive license to develop and commercialize its once-weekly GLP-1 agonist semaglutide and potentially other GLP-1 agonists using Zosano’s microneedle patch delivery system. We have heard few updates on the collaboration in recent months, and the program was still listed as preclinical on Zosano’s pipeline as of a few weeks ago.

We are certainly disappointed by this news and hope to learn more from the companies about the rationale for discontinuation. Given the potential adherence advantages with this system, we imagine that some unexpected challenges may have arisen in preclinical studies for Novo Nordisk to terminate the program at such an early stage. Zosano’s delivery system has looked quite strong in clinical trials with rescue glucagon (now in phase 2); phase 1 data presented at ADA 2014 (poster #1007) demonstrated higher bioavailability, comparable pharmacodynamics, and slightly faster pharmacokinetics with glucagon delivered via the patch vs. injections. Of course, there could be important differences with a drug intended for chronic vs. acute administration; side effects, for example, would presumably be a more pertinent concern. Alternatively, Novo Nordisk may have concluded that any product would arrive too late to compete effectively with other alternative GLP-1 agonist delivery methods in development – see below for more.

  • Ease of administration has already become an important differentiating factor among GLP-1 agonists. Lilly’s Trulicity (dulaglutide), probably the most user-friendly of the currently marketed products, has performed very well since its launch. Data presented during Lilly’s ADA Diabetes Update and other recent financial presentations suggested that it has also accelerated uptake of the overall GLP-1 agonist class. The introduction of injectable semaglutide (another once-weekly, ready-to-use option), which will begin to report phase 3 results within the next few months, will likely contribute to this trend.
  • Beyond these incremental improvements, a number of alternative delivery methods in development could have an even more dramatic impact on the class. A successful oral GLP-1 agonist formulation would of course be a huge win, though it appears that bioavailability will be a key challenge. Novo Nordisk reported positive topline phase 2 results for oral semaglutide earlier this year, though it took a ~280x higher dose to match the efficacy of injectable semaglutide. Oramed also has an oral formulation of exenatide that is expected to enter phase 2 this year, and Novo Nordisk has two oral formulations of liraglutide in phase 1 (though we suspect these may have been deprioritized in favor of semaglutide). In addition to oral formulations, Intarcia’s ITCA-650 is another innovative approach on the horizon that could offer significant potential for improved adherence. Pivotal phase 3 data presented at ADA looked quite solid, though the company will have to work to manage expectations after building up a great deal of media hype over the past year. There is also potential for development of an inhaled GLP-1 agonist under the Sanofi/MannKind partnership, though we have not heard anything concrete on this in recent updates.
  • We wonder whether Zosano has any plans to pursue future partnerships in diabetes. We imagine there could be opportunities to partner with other GLP-1 agonist manufacturers, though this decision by Novo Nordisk could give other potential partners pause. The company has also investigated the administration of insulin through the microneedle patch system in the past, though that would likely pose particular challenges due to the need for dose titration.

Close Concerns Questions

How much progress has this program made to date?

What are the main challenges involved in microneedle patch delivery of a GLP-1 agonist? Are there particular challenges that do not apply to other drugs?

What portfolio projects has Novo Nordisk decided to prioritize instead?

Does Zosano intend to pursue other GLP-1 agonist programs or other applications of its microneedle patch system in diabetes?

Is there any potential for future collaboration between Zosano and Novo Nordisk?

How significant will the market opportunity be for alternative GLP-1 agonist delivery methods, and how profound will the impact be on the class?

-- by Emily Regier, Adam Brown, and Kelly Close