Memorandum

FDA delays Novo Nordisk’s degludec, sending an unexpected CVOT request – February 10, 2013

Executive Highlights

  • In a major surprise, FDA has sent Novo Nordisk a complete response letter for degludec, asserting that cardiovascular outcomes data will be required before re-submission.

On Sunday afternoon Novo Nordisk announced that the FDA contacted the company late Friday and sent a complete response letter. This comes as a major surprise and disappointment considering the drug is already approved in the EU and Japan with very favorable labels. There is a conference call to take place on Monday morning (2 am EST); we will have more following the call. In the meantime, we provide a summary of what is known and not known and questions we have going into the call.

WHAT WE KNOW

  • Tough CRL: From the press release, this sounds like a fairly demanding CRL that FDA sent Novo Nordisk on Friday.
  • CVOT sought by FDA: Specifically, Novo Nordisk says the FDA is asking for additional cardiovascular data from a dedicated cardiovascular outcomes trial (CVOT) before the review of the NDA can be done. Undoubtedly, Novo Nordisk has already designed what would have presumably been a post-marketing trial. As such, we hope that the company can agree with the FDA on what the agency wants so that it can move to enrollment and execution. Of course it would be vastly better from our view if Novo Nordisk doesn’t have to do this prior to FDA approval, although based on the press release that seems unlikely. Perhaps, like Orexigen, Novo can re-submit based on interim data. Even so, US approval would presumably be several years out. This is particularly true since the signal was small, which would imply a bigger trial over a longer period of time may be required. Bigger picture, from a patient perspective, we hope that FDA can move toward working with researchers earlier on so that companies don’t have to waste years of development time and be subject to lots of uncertainty with their development programs.
  • No jobs are at jeopardy: No Novo Nordisk employees will lose jobs as a result of the letter or delay. We assume, of course, that the priorities of some employees will change short-term.
  • Factory problems addressed: We would have understood FDA waiting to approve degludec until the recently disclosed manufacturing problems were addressed. Management virtually said as much in its recent 4Q 2012 conference call. As we understand it, these problems have already been addressed, and we don't think this issue had anything to do with the CRL. The timing was unfortunate, however, as Novo Nordisk doesn’t need any negativity associated with any of its products at present.
  • FDA approval stakes are higher if the drug is more positively perceived. It seemed very clear at the Advisory Committee meetings that virtually none of the advisors felt that the cardiovascular signal was “certain”; that said, FDA has a very high bar for new drugs to be approved and did not appear to view many benefits associated with the drug. While researchers and patients would point to greater stability associated with degludec as a major positive, alongwith flexibility of dosing (which is related to adherence) and lower nocturnal hypoglycemia, it didn’t necessarily seem that these benefits were as important to FDA as, for example, A1c.
  • In terms of the competitive landscape, two obvious major winners are Sanofi and Zealand. Sanofi has, of course, not only with the current empire of Lantus, but they will now likely have the first combination basal insulin with GLP-1, lixi-Lantus (although that device was also delayed last week). BMS/AZ is another likely winner since IDegLira is also presumably delayed in the US by several years.
  • We can learn more tonight: A Novo Nordisk conference call to discuss this unpleasant state of affairs starts at 2 am EST on Monday morning. This will be webcast at novonordisk.com.

WHAT WE DON'T KNOW:

  • How the FDA CRL will affect use of degludec elsewhere internationally: As we understand it, usually future international approvals "read" on EU data - not only was degludec approved in the EU already, the label is very favorable. In addition to Japan, there are already approvals in other countries like Mexico. That said, questions will certainly arise. And, bigger picture, we’re not expecting major revenues associated with degludec early on given that there are so many cost pressures in the EU and given that Novo Nordisk is pricing degludec at a premium to Levemir (this is an unfortunate decision from our view as it is hard to justify any price increases at present). We do hope that the approvals in the EU and Japan mean that other development programs such as IDegLira will move forward (see below).
  • How long the FDA-mandated CVOT will take: First, if the FDA insists on this, we hope it will get its opinions on trial design across quickly and that these opinions are well thought out. Second, while presumably a CVOT can go faster if the trial is made larger, we know that CVOT's are hard to enroll these days; whether the FDA has any idea of its impact on drug development is another question. One small bright light is that Novo Nordisk isn't looking for the same demographic of patients on orals that is the toughest CVOT to enroll for (there currently many going on).
  • FDA rationale: We don't yet know and won't find out from the call what the FDA’s rationale is for sending a CRL. This is an extremely surprising turn of events since few to none of the Advisory Committee members appeared to feel that the cardiovascular signal was conclusive. Novo Nordisk acknowledged the signal and argued that it was an artifact of the declining number of patients in the data set over time. Presumably the Ad Comm agreed with this, since it voted 8-4 in favor of making the drug available - see our take on that November 9, 2012 Ad Comm here. No doubt that was a tense day at the FDA, but we had assumed the agency would move the way its committee advised it.
  • How the FDA perceives the burden of a pre-approval outcomes trial: We don't know who is advising the FDA, but we wonder the extent to which it realizes how its decisions affect patients and researchers. This decision would be easier to understand had the Advisory Committee voted differently; if anything, we would say it might be the unpredictable nature of the FDA that is most troubling. From a patient perspective, while some were looking forward to a more stable, more flexible basal insulin, we think the larger problem is the extent to which other drugs are delayed, specifically IDegLira - the combination liraglutide/degludec pen, which we hope moves forward in development outside the US, and specifically other drugs that will be combined with degludec in the future.
  • What the impact is on other companies with diabetes therapies in development: Researchers and companies need to plan ahead to garner the necessary resources for cardiovascular outcomes trials. Based on this decision, that looks more challenging than ever, due to the uncertainty associated with the process as well as the high cost of outcomes trials, especially enrollment.
  • How will other R&D programs move forward at Novo Nordisk: While we assume that other major programs will move forward as planned, including liraglutide for obesity (these trials are finished), liraglutide for type 1, and semaglutide (once-weekly GLP-1), we don't know if Novo Nordisk's new ultra-rapid-acting insulin will be delayed - presumably this drug was to be studied in tandem with degludec (outside pump studies, etc.), and it's unclear if the trial design will be affected significantly. (We assume each phase 3 trial must use the same basal insulin.) It will be interesting to hear if Novo Nordisk can move forward IdegLira – presumably it could due to the EU and Japanese (and other) approvals.

QUESTIONS GOING INTO THE NOVO NORDISK CALL

  • What rationale did FDA give for requesting the CVOT?
  • How fast does Novo Nordisk expect to get FDA input on the CVOT?
  • Can Novo Nordisk move forward on using degludec in other studies such as IDegLira?
  • Is FDA changing its view on how much differentiation is required for a drug to be approved?
  • How does this impact perception of next-gen analogs versus NPH and first-version analogs going generic?
  • Phase 3 U300 Lantus studies are ongoing that have a PK/PD profile that we understand looks very similar to degludec. Since this is an old molecule, what wistrong>ll FDA ask in terms of safety data?

-- by Kelly Close