Memorandum

FDA approves Novo Nordisk’s once-weekly semaglutide under brand name Ozempic – December 5, 2017

Executive Highlights

  • Novo Nordisk just announced the FDA approval of GLP-1 agonist Ozempic (once-weekly semaglutide) for type 2 diabetes. We learned from the company that Ozempic will be parity priced relative to once-weekly GLP-1 products already on the market (presumably, Lilly’s Trulicity).
  • The product label includes a retinopathy warning similar to that seen on insulin labels. Section 5.3 mentions the relative risk increase for retinopathy over two years in SUSTAIN 6, but also alludes to early worsening phenomenon, wherein rapid A1c decline leads to transient increases in retinopathy.
  • Management anticipates US launch in 1Q18.

Even faster than we expected, the FDA has approved Novo Nordisk’s once-weekly GLP-1 agonist semaglutide for type 2 diabetes, under brand name Ozempic. This decision was expected by end of year, though ever since the 16-0 vote in favor of semaglutide at the Advisory Committee meeting in October, there’s been little doubt that the drug would be approved.

In fact, the only concerns voiced by the Advisory Committee – mild ones at that – were related to possible retinopathy risk, as seen in the SUSTAIN 6 CVOT (HR=1.76 for retinopathy outcome, 95% CI: 1.11-2.78). In line with recommendations from the Advisory Committee, the Ozempic product label includes a retinopathy warning similar to that seen on insulin labels – section 5.3 mentions the relative risk increase for retinopathy over two years in SUSTAIN 6, but also alludes to early worsening phenomenon, wherein rapid A1c decline leads to transient increases in retinopathy. This was also seen in the DCCT for patients randomized to intensive glucose control. Indeed, semaglutide has demonstrated remarkable glucose-lowering potency throughout the SUSTAIN clinical program (including superior A1c reductions vs. AZ’s once-weekly Bydureon and vs. Lilly’s once-weekly Trulicity), and a post-hoc analysis of SUSTAIN 6 suggested that the retinopathy signal could be attributed to dramatic drops in A1c. History of retinopathy at baseline was another risk factor, and the Ozempic label recommends careful monitoring of these patients for progression of the microvascular complication. The label stipulates that long-term effects of semaglutide on retinopathy are unknown, but we don’t imagine this will deter many providers and patients, in light of the incredible A1c-lowering, weight loss, and possible cardioprotection all housed in a once-weekly injection. In a separate conversation with our team, Dr. Todd Hobbs (CMO for Novo Nordisk in North America) explained that the company was in close communication with FDA regarding final label language for retinopathy. "In our opinion," he shared, "the language that is included in our label informs the prescriber on what is important to know about diabetic retinopathy complications with Ozempic."

Notably, a major theme from the Advisory Committee discussion was that we do have clear protocols for assessing and treating diabetes-related retinopathy, so this risk (if it exists) should be manageable in the real world. That said, we’ll be on the lookout for any messaging from Novo Nordisk around best practices for avoiding or treating retinopathy in the context of semaglutide. It would be a real silver lining if the company is able to disseminate knowledge of best practice eye care, while also marketing one of the most potent diabetes drugs in recent history.

Novo Nordisk plans on a swift launch, getting Ozempic onto US pharmacy shelves in 1Q18. This is fitting, as management has shown strong commitment to this product on earnings calls and during the company’s recent Capital Markets Day. With Victoza’s (liraglutide) patent expiry coming around 2022 or 2023, Ozempic’s approval comes in perfect time, as injectable semaglutide will grow in volume/sales over the next five years to drive Novo Nordisk’s GLP-1 business. That said, Dr. Hobbs also emphasized what is now a diverse portfolio of GLP-1 offerings, with Victoza for patients who prefer a daily medication regimen and Ozempic for patients who prefer once-weekly dosing. During the company’s 3Q17 update, CEO Mr. Lars Jørgensen called semaglutide “probably the biggest opportunity we’ve ever had in Novo Nordisk.” 

Pricing

  • We learned from Novo Nordisk that Ozempic will be priced on par with current market-leading once-weekly GLP-1 agonists (presumably, Lilly’s Trulicity). We see this is as a very smart move, as payers should have a hard time denying coverage for a similarly-priced/more effective product (based on head-to-head data like SUSTAIN 7). It’s also a win for patients, who will hopefully have similar access to Ozempic as existing GLP-1 products (though reimbursement could definitely be improved for the class as a whole), and who can soon take a therapy to lower blood glucose and body weight better than most medicines in the current treatment arsenal. Semaglutide will be available in Novo Nordisk’s FlexTouch device. Management has previously mentioned that this is “inherently costlier” than the Victoza FlexPen, so it’s unclear exactly how Ozempic pricing will compare to that of Victoza. We’ll certainly return to this question upon Ozempic’s 1Q18 launch, and we’ll keep our ear to the ground in the meantime.

Pediatrics

  • Per approval requirements, Novo Nordisk will conduct a pediatric trial of semaglutide in adolescents <18 years-old. No timing information was disclosed in the company announcement. Moreover, Ozempic will be added to the 15-year registry for medullary thyroid carcinoma (MTC) that is being conducted for all long-acting GLP-1 agonists on the market, including Victoza.

Upcoming Studies

  • Semaglutide’s clinical story is far from over. Dr. Hobbs confirmed that Novo Nordisk is committed to a larger, post-market CVOT for Ozempic in type 2 diabetes, which could support a CV indication for the drug. SUSTAIN 6 was a relatively small, relatively short trial. We await the full readout from SUSTAIN 7 (topline results indicating superiority over Trulicity were released in August). Semaglutide’s weight loss effects have been particularly impressive, and phase 3 studies of the once-weekly formulation in obesity are slated to begin in 1H18. Novo Nordisk will also conduct a CVOT of semaglutide in people with obesity (n=12,500), which could bring major advance in our appreciation of obesity as a medical disease (CSO Dr. Mads Thomsen equated this planned CVOT for obesity to UKPDS for type 2 diabetes and DCCT for type 1 diabetes). Moreover, all 10 trials in the phase 3 PIONEER program on oral semaglutide are expected to read out in 2018.

 

-- by Payal Marathe and Kelly Close