FDA Decision on Diabetes Drug Hurts Novo Nordisk, Helps Sanofi

In a huge setback to Novo Nordisk (NVO), the FDA has rejected its new Tresiba insulin and wants a cardiovascular outcomes trial before a new review can be completed, a move that is widely expected to delay approval for at least two years. The rejection comes less than a month after European regulators approved Tresiba, which Novo has been counting on to bolster its standing in the hyper-competitive diabetes market.

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“It’s not a good day for diabetes patients in the US, it’s not a good day for Novo Nordisk and for Novo Nordisk shareholders,” Novo ceo Lars Soerensen said on a conference call with analysts earlier today. “We will do our utmost to ensure this is solved as expediently as possible… We were both very surprised and very disappointed.” In a statement, he noted approval also hinges on correcting problems in a manufacturing plant.

Indeed, only two week ago, Soerensen told analysts that Novo was making progress in talks with the FDA and did not have any indication that approval might be delayed. His comments were made following a recommendation last November by an FDA advisory panel that Tresiba should be approved, but that Novo should conduct a cardiovascular outcomes trial in 7,500 patients with type 2 diabetes – after approval.

By issuing a complete response letter, however, the FDA is signaling a desire to avoid the possibility that safety issues could emerge with a primary care drug after facing a firestorm over cardiovascular risks tied to the Avandia diabetes pill. Since that controversy, which emerged after a meta-analysis reported links to heart attacks and strokes, the agency has been more cautious about issuing certain approvals (covered in earlier Pharma news).

“By approving (Tresiba) now, it would run the risk of a blow up later when the cardiovascular safety trial completes,” Sanford Bernstein analyst Tim Anderson writes in an investor note this morning. “The last thing FDA wants is to approve a new drug that could potentially run into a safety issue years later, especially when the benefits of (Tresiba) over Lantus (a rival insulin sold by Sanofi) are only modest.”

All of this is a big plus for Sanofi (SNY), which is struggling to boost revenue and has been counting on building its Lantus franchise. “This removes a highly visible potential competitor launch for Sanofi in the US for at least a few years while also providing incremental runway for Sanofi’s new Lantus formulation,” writes Leerink Swann analyst Seamus Fernandez in an investor note. He foresees a three-year delay in Tresiba approval.

To read the remainder of this article, go to Pharmalot.

Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at editor@ycharts.com.

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