June 13-17, 2014; San Francisco, CA – Analyst Meetings Report – Draft

Executive Highlights

In addition to the Scientific Sessions’ orals, posters, symposia, etc., several companies took the opportunity to host investor meetings in which they added color to the new data presented in the conference halls – even more than in the past. One of the most notable meetings was Novo Nordisk’s, in which the company focused mainly on clinical trial results for liraglutide 3.0 mg for obesity, Tresiba (insulin degludec), IDegLira (fixed-ratio combination of insulin degludec and liraglutide), and a faster-acting insulin aspart, which Novo Nordisk believes will represent as much of an advance as Novolog did 15 years ago. The meeting was led by a slew of top Novo Nordisk management team members, including CFO Jesper Brandgaard, SVP of Global Development Dr. Peter Kristensen, SVP and Global Chief Medical Officer Dr. Alan Moses, SVP of Diabetes R&D Dr. Peter Kurtzhals; and Chief Scientific Officer Dr. Mads Thomsen. Sanofi opted to center its meeting on its new U300 insulin glargine formulation, Toujeo, which management announced has been submitted in the US and EU. Leaders present at the session included Pascale Witz, EVP of Global Divisions & Strategic Development; SVP of Diabetes, Pierre Chancel; Senior Medical Officer of Diabetes Dr. Ricardo Perfetti, and Dr. Matthew Riddle, renowned Professor of Medicine at OHSU. Notably, Sanofi also hosted a roundtable with Medtronic to discuss its new partnership – we were struck to see both Mr. Chancel present, President of Sanofi Diabetes, as well as the new head of Medtronic Diabetes, Mr. Hooman Hakami; both leaders were surrounded by top ranking management team members. Finally, Lilly’s prepared remarks detailed data presented on the company’s once-weekly GLP-1 agonist dulaglutide (which we learned will be marketed under the brand name Trulicity if approved); there was also detailed Q&A from which we learned a great deal. Representatives of Lilly management on the call were Enrique Conterno (Sr. Vice President-President of Lilly Diabetes), Dr. David Kendall (Vice President of Global Medical Affairs), Dr. Jessie Fahrbach (Medical Director of Lilly Diabetes), Dr. Gwen Krivi (Vice President of Lilly Diabetes Product Development), and Illissa Rassner (Director of Investor Relations).

Biotech companies also held investor meetings; for example, Zealand Pharma held an ADA analyst breakfast on the morning of Saturday June 14^th, in which new Chief Scientific Officer Dr. Torsten Hoffmann and other members of senior management provided commentary on the company’s pipeline and partnered products for diabetes. Notably, in speaking broadly on CVOTs, management characterized the chances of Lyxumia (the once-daily short-acting GLP-1 agonist, lixisenatide) showing cardioprotection in its CVOT ELIXA to be relatively slim. Looking earlier in the development pipeline, Isis shared its vision for its phase 2 glucagon receptor antagonist ISIS-GCGRRx. Positive phase 2 results for the agent were presented in a poster at ADA, and management highlighted that within four-to-five weeks of ISIS-GCGRRx initiation in the 13-week trial (n=75), the average patient, no matter his/her baseline fasting glucose level, reached euglycemia (as measured by FPG). For more specifics on this and the other investor meetings, please see our detailed reports below.

Analyst Meetings

Novo Nordisk Investor Call

Novo Nordisk held an investor call to discuss data presented on its diabetes and obesity portfolio at ADA 2014. The call focused mainly on clinical trial results for liraglutide 3.0 mg for obesity, Tresiba (insulin degludec), IDegLira (fixed-ratio combination of insulin degludec and liraglutide), and a faster-acting insulin aspart, which Novo Nordisk believes will represent as much of an advance as Novolog did 15 years ago. Much of the question and answer session also focused on the impact of Lilly’s dulaglutide on the GLP-1 market; management was unfazed, and expressed confidence that Victoza will retain its strong position despite the new competition. Here we provide our top five highlights from the call, followed by the Q&A session and an appendix summarizing our coverage of Novo Nordisk’s portfolio at ADA. Speakers on at the meeting were Jesper Brandgaard, Chief Financial Officer; Dr. Peter Kristensen, Senior Vice President of Global Development; Dr. Alan Moses, Senior Vice President and Global Chief Medical Officer; Dr. Peter Kurtzhals, Senior Vice President of Diabetes Research; and Dr. Mads Thomsen, Chief Scientific Officer.

• Novo Nordisk expressed confidence that Victoza will retain its strong position in the GLP-1 agonist market despite competition from Lilly’s dulaglutide. Multiple investors on the call had questions about the impact of the AWARD-6 results showing non-inferiority of Lilly’s once-weekly GLP-1 agonist dulaglutide to Victoza. Management described dulaglutide as “an important new entry” that it hoped could expand the market for GLP-1 agonists (we believe it will), and expressed confidence that Victoza’s name recognition and superior effects on weight loss would ensure its continued strength, saying “Victoza has stood up against every agent it ever has been compared to.” We think dulaglutide will certainly be a significant competitor to Victoza, as it is the first agent in the class to match Victoza’s A1c reduction, and we feel that the choice between a once-weekly and a once-daily dose may be more important to patients than the slight weight loss benefit with Victoza. That said, the Victoza brand is incredibly powerful and it has a terrific composite benefit (very easy to prescribe and use, very easy titration, simple pen to use, weight loss, good A1c benefit, can be used at any time, strong brand).  It will be interesting to see how payers view the two products – Novo Nordisk does not believe formularies will create separate categories for once-weekly and once-daily GLP-1 agonists; we’ll look forward to watching. Payers of course have created trouble for Novo Nordisk with Express Scripts and Aetna more recently though we think it would be unlikely that the two products would be treated as exactly the same. We’ve been wrong on this before though and it’s hard to call.
• The company hopes to price IDegLira based on a sum-of-its-parts model. Management believes there is a substantial market for this drug since so many patients are inadequately controlled on basal insulin alone. They cautioned that they don’t yet know how payers will view IDegLira, but said their strategy is to determine the price based on the price of the individual components. This makes sense and would be a win-win for patients as they would have just one co-pay.
• Novo Nordisk believes that its new faster-acting aspart will represent as much of an advance over Novolog as Novolog did over human insulin 15 years ago. What a big statement to make! (That was transformational change back in the last 1990s.) The major benefit is expected to be a reduction in postprandial excursion, which would be very helpful for patients on multiple daily injection (MDI) therapy who may not be able to time their bolus dose perfectly with their meals. It will also offer a significant improvement for insulin pump users, as the delay between the infusion of insulin and its effects could be drastically reduced.
• The year 2015 will be an exciting one for semaglutide. Novo Nordisk expects to have phase 3 data on its once-weekly GLP-1 agonist semaglutide toward the end of 1Q15, and the company is also conducting a preclinical study regarding the safety of the component that facilitates transepithelial uptake of the compound in the gut. If phase 3 trials confirm earlier results demonstrating semaglutide’s superiority compared to liraglutide in terms of glucose-lowering efficacy, weight loss, and hypoglycemia risk, this product would certainly strengthen Novo Nordisk’s competitive position in the GLP-1 agonist market and potentially alleviate some of the concerns about dulaglutide’s impact on the market for Victoza.
• Despite some investors’ concerns, Novo Nordisk does not believe safety concerns will present a major stumbling block for the approval of a 3.0 mg dose of liraglutide for obesity. Several investors asked questions about the risk of gallbladder disease, but management asserted that gallbladder disease is always associated with substantial weight loss and is not a direct effect of this drug. Novo Nordisk is also confident that the cardiovascular safety profile will not pose an issue for the approval of liraglutide for obesity as it was for insulin degludec, though management declined to provide a specific hazard ratio.

Questions and Answers

Q: You’ve said that the cases of gallbladder disease you’ve seen is related to substantial weight loss. Have you seen numbers on whether the incidence depends on the amount of weight loss? And can you speculate on competitors’ data – with Sanofi’s new glargine, we’ve seen lots of hypoglycemia reduction in the beginning but the effects fade out. What do you make of this? Is it under-dosing in the beginning? Are they actually similar two years down the road?

A: I think with glargine U300, you’re spot-on. In their study of basal/bolus therapy for type 1, you only see significance in the running period. I haven’t seen fasting plasma glucose curves over time, but I’m guessing that the titration was somewhat slower for U300, so there was less control in the running period, leading to an artifactual improvement in hypoglycemia. In the EDITION 3 trial, insulin-naïve patients saw no significant difference in any periods, titration or maintenance. My view is that we know the picture of Lantus U300, it’s always nice to offer better treatment, but we foresee that Tresiba will have the upper hand.

Q: And the question about gallbladder disease and weight loss?

A: We’re going to keep the numbers close to our chest. We did see greater weight loss in patients who had gallbladder disease in the treated group, which is expected – that’s what happens after weight loss surgery too.

Q: With liraglutide 3.0 mg, when you discontinue treatment after 52 weeks, people rapidly regain the weight, and if you stay on the drug, there’s a clear plateauing effect. Isn’t that a conundrum? You can’t discontinue treatment but you’ll only stay at the same level, and this drug is expensive.

A: Regulatory agencies ask you to do chronic therapies; their guidelines are that we treat for a year and document sustained weight loss over time. We have to admit that how people really treat obesity is cyclically, just as they do diet and exercise cyclically (or only once). When Peter discovers a new anti-obesity agent, we can reset the fact that your basal metabolic rate goes down when you lose weight. It’s an evolutionary adaptation – your body wants to preserve the weight you have, and you’ll always have weight regain as you end therapy. We would love to combine liraglutide 3.0 mg with an agent that works on energy expenditure.

Q: As you’re approaching the market for IDegLira in Europe, do you have any insights into how payers are thinking? The profile is excellent compared to insulin, but how are they thinking in terms of cost? How are doctors positioning it – early or after insulin? And how did the nausea rate vary between the different doses? Was there any correlation between higher nausea and higher BMI or higher doses?

A: With nausea, the best indication comes from DUAL II, which was double blind. We were very surprised to see that the rates of nausea were not distinguishable between Tresiba and IDegLira. If you start at a low dose, do a slow titration, the nausea doesn’t increase at higher doses.

With pricing, it’s obvious to us that there’s substantial market opportunity with patients inadequately treated on basal insulin. It is likely to be priced at the price of the individual components. How the effects will be accepted by payers is unclear since the product isn’t approved. You can assume our strategy will be to go for a sum of the parts.

Q: You talked about the clinical profile of the U300 glargine. Can you make similar comments about the clinical profile of peglispro? There’s no data on that at ADA, but if you had peglispro in your portfolio, how would you approach it? And second question, what is the timeline for your oral insulin programs?

A: It wouldn’t be prudent to comment on events at Eli Lilly. We’ll have to see data on the risks and benefits. We would welcome innovation; it’s more fun to compete on innovative products and it’s better for patients. We’re wrapping up recruitment in our semaglutide trial, so we should have data towards the end of the first quarter next year. We also have a big preclinical program on the component that facilitates transepithelial uptake of the drug in the gut, and we’re hoping to document the safety of that. It’ll be an exciting first half of next year on semaglutide.

Q: And about oral insulin?

A: There will be an early stage phase 2a trial in the first half of next year. There won’t be anything like a phase 3 trial in the near future, but further investigation and into phase 2b. Early days but exciting.

Q: Going back to gallbladder disease with liraglutide, can you comment on the severity of cases and differences between doses in the SCALE diabetes trial? Was it a labeling issue or is the FDA weighing additional weight loss against safety? And can you give us a timeline for the data readout with Tresiba?

A: I’m not going to begin to opine on what the FDA is thinking about gallbladder disease. We’ll learn at the Advisory Committee meeting on September 11. The cases we saw were routine cases, the majority of patients underwent cholecystectomies, which is a common approach. There were some cases where there didn’t appear to be a clear dose-response relationship when comparing the two doses, but there were some cases where there was more weight loss with 3.0 mg, so it’s hard to see exactly what’s going on. Gallbladder disease wasn’t a particular issue in the diabetes program, but those trials weren’t conducted to maximize weight loss. With Tresiba, we’re happy with the progress but it’s too early to speculate. The latest update was that recruitment is ahead of schedule and data for interim analysis should be available mid-next year.

Q: Can you talk about cardiovascular data with liraglutide for obesity – is the hazard ratio different than with diabetes? And can you talk about the market situation: dulaglutide has shown some good results but is worse on weight than Victoza, and you also have some new fixed-dose combination data. Which project do you feel will do best? What do you think the competitive environment will look like for the next 6-12 months?

A: With cardiovascular data, keep in mind that when you’re looking at a diabetic population, the pipes are more rusty – people have had a metabolic disturbance for decades, so rates will be higher, the likelihood of a benefit is lower, and the benefit is less likely to be significant. We don’t want to release numbers, but we believe we’re on the left side of the 1-point node. The Advisory Committee will discuss cardiovascular data because that’s part of the genes of the FDA, but we don’t foresee the cardiovascular profile of liraglutide 3.0 mg as a stumbling block pre-approval. With regard to the new combinations of DPP-4, SGLT-2 inhibitors, etc., we haven’t seen a clear trend that people suddenly go on to a bunch of oral agents. They’ll be on two to four before going to biologics. In my day, you started with metformin, then added a sulfonylurea, maybe a TZD, and then insulin. The dapagliflozin-saxagliptin combination isn’t totally additive. People tend to think 0.7% +0.7% means a 1.4% reduction, and that’s not what we’ve seen in trials, but it’s still decent data. Now patients have the chance after metformin to go onto a combination, which might keep them in good condition for four to five years rather than having to change oral agents every other year, but they’ll still need a biologic eventually. We want Victoza and eventually semaglutide to be used earlier, but really Victoza is used all over the place and we don’t see that changing. There’s more noise in the market and we want a better label for Victoza, but we’re pretty comfortable with the comparison to dulaglutide. Victoza has stood up against every agent it ever has been compared to.

The reality is that the only compound able to match Victoza’s A1c reduction is dulaglutide, and that would be the product we would expect to help expand the GLP-1 market. Victoza’s challenge isn’t that we don’t have a large portion of the market – we’re doing well and there are opportunities for expansion of the market. Dulaglutide may offer opportunities for people who want a once-weekly agent, we’re better on weight. We see dulaglutide as an important new entry that hopefully could create more noise and accelerate the GLP-1 segment in 2015.

Q: With dulaglutide, how clinically relevant are the differences compared to Victoza? If you look at the GI profile for dulaglutide, our sense is that the severity of GI events is higher than with Victoza, so do you have comments on that? With the faster-acting aspart, it’s much better than the current regimen, but again, what is the clinical relevance? How does it translate into clinical outcomes?

A: The best way to assess clinical relevance is the comparison I made in my slide, where you compare the benefit of a 40% improvement to a benefit of the same magnitude going from human insulin to aspart. That was accepted in the marketplace as a clinical benefit and there was the potential to reduce the hypoglycemia risk. The major benefit is expected to be postprandial excursion reduction. If you compare and say how much will be reflected in A1c, if you accumulate a 25% improvement in postprandial excursion over 3 meals, that takes out 75% of the excursion over 24 hours, and can potentially lead to a long-term A1c reduction. We’re targeting postprandial improvement in phase 3.

There are two ways to look at the faster-acting aspart: one was just described, and as we get closer to the closed-loop, every minute you can gain is good. But with an MDI regimen, it makes a huge difference for patients who have freedom to inject with greater comfort in terms of what the response will be and when you can inject it. Kids could take it after a meal with no deleterious effects; with older adults or people who are institutionalized, there’s a huge problem matching insulin to meals, so this would be more precise. All clinicians would say MDI basal/bolus therapy is not easy for patients to do.

The way doctors look at the drugs they prescribe is there are things they know very well and things in their mind they think they can remember. In this case, everyone knows you reduce weight with Victoza. You can document that you do so more with Victoza than others and then add that we’ve done the SCALE diabetes study showing weight loss of up to 6% at the obesity dose, so there’s a perception there that this is the GLP-1 drug with the greatest weight loss potential, which I think it is. We’ll be seeing systolic blood pressure data, and my hunch based on what I’ve seen is that Victoza also has the upper hand. Dulaglutide is a good product, it’s efficacious in lowering A1c, but Victoza is better on other things. How Lilly has designed their protocol for assessing the duration of nausea, I have no clue. We saw phase 2 data and it looked like GI disturbances are more pronounced than in Victoza. But it’s important how they categorize a nausea episode. We’ve seen cases where one patient reports one event regardless of whether they had 20 weeks of nausea or one, and that’s not how we should compare nausea.

Q: What do you think the pricing of the faster-acting aspart would be compared to Novolog?

A: It’s way too early to comment on that. I assume it would be in the same ballpark, but the quality of the clinical data in phase 3 would be an element.

Q: Can you talk about the future formulary status for GLP-1 agonists? Right now it’s only one class, but do you expect following the approval of dulaglutide there will be two classes, one for once-weekly and one for once-daily?

A: I don’t think so. They look at drug targets and how they work, not the frequency. I don’t think factors like frequency and convenience would dictate that

Appendix

Table 1: Selective coverage of Novo Nordisk’s ADA presentations

Sanofi Investor Call

Sanofi held an investor meeting on Monday, June 16 to discuss data presented on its diabetes portfolio at ADA 2014. The meeting focused on phase 3 registrational data for Sanofi’s new U300 insulin glargine formulation, Toujeo, which management announced has been submitted in the US and EU. Here we provide our top five highlights from the call, followed by the transcribed question and answer session and an Appendix detailing hypoglycemia findings from Toujeo’s phase 3 EDITION program (a subject of intense questioning during Q&A).Notably, the call revealed the identity of one compound in the phase 1 biosimilar insulin program: SAR342434 is insulin lispro (Lilly’s Humalog) and will advance to phase 3 in 2H14. Speakers on the call were Pascale Witz, Executive Vice President of Global Divisions & Strategic Development; Pierre Chancel, Senior Vice President of Diabetes; Dr. Ricardo Perfetti, Senior Medical Officer of Diabetes; and Dr. Matthew Riddle, Professor of Medicine at Oregon Health & Science University.

• Management announced that Toujeo has been submitted to the US FDA and reiterated that Toujeo had also recently been submitted to the EMA (as announced two days earlier in a press release about Toujeo data presented at ADA). With a standard 12-month review cycle, Toujeo could be the first “second-gen” insulin glargine formulation to the US or European market, with Lilly’s insulin glargine formulation delayed by Sanofi’s lawsuit, potentially until 2016. During Q&A, management noted that there have been no cardiovascular differences observed between Toujeo and Lantus and that Toujeo’s ultimate label could draw upon the safety claims made in Lantus’ label (e.g., presumably the CV safety labeling conferred by ORIGIN results. Management declined to make any pricing comments, but stated fairly emphatically that ensuring good access would be a high priority. They also stressed that converting Lantus patients converting from Lantus to Toujeo was a very high priority – presumably this is patients who are not at goal.  We aren’t sure how to interpret the pricing discussion exactly since there have been multiple price increases to insulin in 2014 in the US in particular; access to insulin analogs has become more challenging in some areas of the US like the Pacific Northwest in particular. We don’t have a good handle on reimbursement changes broadly speaking but know that in many parts of the EU, access to analogs is a major issue. At the same time, insulin is still less expensive for many type 2 patients than would be taking multiple orals or taking insulin and orals. We also believe in pricing premiums as this is what enables continued R&D investment, which itself enables medicines to be created and then become generic, which is very important for patients globally, especially in third-world countries. To be sure, pricing is hardly an issue with simple perspectives.
• During the call, management presented results of a meta-analysis of EDITION 1, EDITION 2, and EDITION 3 (the three global type 2 diabetes studies for Toujeo, Sanofi’s U300 insulin glargine), which found that Toujeo and Sanofi’s gold-standard (for now) Lantus had equivalent A1c-lowering effects after six months (~1.1% reduction from 8.3% baseline in both arms). Meanwhile, Toujeo had lower rates of nocturnal and anytime hypoglycemia than Lantus (31% and 14% relative rate reduction, respectively) and less weight gain than Lantus (0.28 kg [0.62 lb] less). The percentage of individuals affected by one hypoglycemic event (confirmed ≤70 mg/dl or severe) was statistically significantly lower on Toujeo from baseline to six months (9% relative rate reduction for anytime hypoglycemia and 25% relative rate reduction for nocturnal hypoglycemia); the statistical significance also held true when looking online at baseline to week eight or week nine to six months. Results in of the Japanese type 2 diabetes study, EDITION JP2, were even more pronounced, with Toujeo providing a 55% and 36% relative rate reduction, respectively, in nocturnal and anytime hypoglycemia. We imagine Sanofi is very glad to have these results, given the notable success of Novo Nordisk’s degludec in Japan – we understand 20% of those on basal insulin are taking degludec. 
• In Q&A, analysts questioned whether the hypoglycemia claims from the EDITION studies would be enough to convince regulators that Toujeo actually has a clinically meaningful hypoglycemia benefit. Much of the analysts’ skepticism is likely fueled by the hard stance the FDA took against Novo Nordisk’s hypoglycemia claims for its next-generation basal insulin Tresiba (for details see Tresiba’s Advisory Committee meeting). Regarding Toujeo specifically, many of the individual EDITION trials failed to demonstrate statistically significantly better hypoglycemia when the time period of the analysis varied (e.g., looking at the whole six-month duration of the trial or looking only from baseline to week eight or three months to six months; see table below in the Appendix). Analysts questioned whether Sanofi’s slicing and dicing of the timing in this way was legitimate, especially when the time period in the analysis was not part of the prespecified hypoglycemia endpoint. Sanofi’s original intention with separating out weeks one through eight from week nine through six months was to isolate the comparison to the period of time after titration had been optimized, the company said. Sanofi management maintained that even when statistical significance was not reached, the trend was always in the same direction no matter how hypoglycemia was defined and that this consistency was important to consider. We do think this will be perhaps a bigger deal when combining with GLP-1; we continue to believe it’s not about what advantages new insulins show alone but the advantages they are able to ultimately show in combination therapy. To be developed, of course, they need to be approved. 
• Another notable happening during the call was that Sanofi confirmed that one of its biosimilar insulins in development is a version of Lilly’s rapid-acting analog, Humalog (insulin lispro) and that this compound (SAR342434) will advance to phase 3 in 2H14. SAR342434 has completed phase 1 in which it demonstrated similar activity and exposure as Humalog. Management disclosed that the phase 3 program will recruit ~1,000 patients for two studies: one in type 1 diabetes and one in type 2 diabetes, both using Humalog as the direct comparator. As a reminder, management disclosed during its 4Q12 financial update that it had two biosimilar insulins in phase 1 that were not based on any of Sanofi’s own molecules, suggesting that they were biosimilar versions of Lilly’s Humalog and Novo Nordisk’s Novolog (insulin aspart). As we understand it, the formulation patents for Humalog expired in 2013, and Novolog’s will expire in 2017.
• Management commented on its announcement to partner with Medtronic (see item #5 under “Top Five Technology Highlights” in ADA 2014 Day #2), highlighting the partnership as an example of how Sanofi is leading the way toward integrating care for patients. Management remarked that it would take an “open innovation model” whose goal would be to think of a solution to help patients not have to worry about their disease 24/7.  That sounds great from our view and was reinforced in the Q&A discussion, where Sanofi management emphasized they will be considering a wide range of delivery technologies. That makes sense to us given the sizable percentage of patients not at their glycemic targets and the relatively smaller percentage of patients on insulin at all. We believe Sanofi is going to go a long way in helping patients with type 2 in particular when they use CGM and are able to get more sound therapeutic decisions (these decisions should be easier for doctors and healthcare teams to make when they can use CGM and easily see what is and is not going well with diabetes management), whether the data indicates the patients need MDI, basal insulin, physiologic insulin, GLP-1, combination GLP-1 and basal insulin, oral insulin, etc. As we previously wrote, we could imagine multiple products that could come out of the alliance, especially prefilled patch pen-like wearable devices (like Valeritas or CeQur) or simplified prefilled insulin pumps – we also think advice from HCPs to patients will be easier to develop and some will cover earlier stage medications such as GLP-1 (which will be a positive for Sanofi and Zealand). Additionally, we wonder if a concentrated insulin partnership is in the works, similar to the approach and Insulet and Lilly are taking. On oral insulin, management said it was both very important but also not the first area of focus, given technical challenges.

Questions and Answers

Q: What will the weight of the meta-analysis of Toujeo be with the FDA? Since it's mostly the high-dose patients that experience less hypoglycemia, is the meta-analysis something that could change the labeling?

A: Although I'm not an expert on decision-making within the regulatory agencies, I know that they will be interested in the entire submission package in relation to both type 1 and 2 diabetics. What we have presented so far, the pooled analysis of the first three of the EDITION studies, will certainly be part of what they'll consider. But I'm quite confident that they will want to look at the other studies including the Japanese type 2 diabetic study and in addition to that the Japanese type 1 diabetic study.

So, how convincing will it be to them, I think that's unknown by me. They, however, will be pleased with the consistency of the findings and the quality of the analysis as far as my opinion goes.

Q: In light of your recent deal with Medtronic, it is apparent that you are putting more emphasis on patches rather than oral insulin, based on your lack of oral GLP-1 or insulin in the upstream diabetes pipeline. So, what's your view on the orals and do you think that maybe patches or other drug delivery routes are a better path?

A: Well, we are going to consider a broad range of drug delivery technologies, and clearly, I mean, a patch would be an option that we are considering. Specifically, when you think about the heavy insulin users that's something that should be of interest to patients. And on the oral insulin, it certainly – oral delivery of GLP-1 may actually be more interesting, the most interesting. Oral insulin is something that is very challenging. We see a lot of both intra- and inter-variability, so it's probably not going to be our first area of focus.

Q: Even though glycemic control from the EDITION program was non-inferior to Lantus across all the trials, the dose needed to get equivalent glycemic control was 10% to 20% higher. What implications will this have on pricing?

A: There was indeed, throughout the studies, about a 10% or slightly greater difference in total units required to attain the same glucose control; however, it is unclear if this is statistically relevant. If systematic titration is used in clinical practice as in the studies, what people may expect is equivalent glucose control, less hypoglycemia, equal or less weight gain. Therefore, the 10% difference may not have very great clinical importance.

Additionally, Toujeo is a better tool, has a better profile, and each time that we have exposed physicians to this profile, it's quite clear: if access is not an issue, why shouldn't they go for Toujeo, either in an insulin naïve patient or in a switch patient? So it's very simple, we'll make sure that access is not an issue for Toujeo. Our directive is to maximize the penetration of Toujeo in the insulin naïve patients and make a very rapid conversion from Lantus to Toujeo. Now, pricing wise, it's too early to tell you about the pricing strategy, but of course, we want to make sure that access is not an issue.

Q: Solely based on the pre-specified secondary endpoint, across many of the trials, Toujeo was comparable to Lantus or just numerically lower but not statistically significant. So in terms of potential label discussions, how you're going to go and approach this with the FDA?

A: There's no one way to analyze hypoglycemic outcomes and between different populations and different ways of defining hypoglycemia risks that are probably different for a type 1 population or type 2 population and so on, it’s not very clear cut. So within the EDITION program, the selected main hypoglycemia endpoint was the after titration period from eight weeks to six months with the less than 70 mg/dL confirmed or severe definition for nocturnal. So a very specific category. Not all of the studies were this statistically significant difference, but the trend was always in the same direction. In some of the studies, the statistical power was low, but the nominal risk reduction was still of interest. So I believe that from the regulatory point of view, the most important characteristic of the finding so far will be to consistency, when all of the different categories of hypoglycemia, all the different definitions are concerned.

Q: Could you explain why week eight was picked as a cutoff point for the titration versus the maintenance days in the EDITION studies for the hypoglycemia measurement? A lot of the benefit seems to come in about the first 12 weeks, so if you picked week 12 as the cutoff, with 12 weeks to six months as maintenance, would you still see a maintenance period hypoglycemia benefit?

A: So, the time course question is an important and interesting one. First of all, the reason for selection of eight weeks was that in these studies, as in many other treat-to-target design studies, the most frequent visits in the majority of the titration of insulin dosing occurs in the first eight weeks. It's also true that the attainment of stable hemoglobin A1c values is usually not until 12 weeks but that's partly because of the delay between the titration and the attained glucose control by that measure. So, it was an arbitrary decision but the intention was to isolate the stable dose part of the study from the titration period. Now, why is that a plausible decision? One of the concerns when a new drug is studied, it's an artifact introduced by either continuing a previous treatment in this place, glargine U100, Lantus, and testing a new drug in comparison to it, usually there's a more cautious use of the new drug and so, you are unable to scientifically compare the first eight weeks or 12 weeks with the old drug with great confidence so that artifact was intended to be taken out the analysis by waiting until the titration was complete.

In my opinion, it's important to look at both the early period, the first eight week period and the eight-week period to six-month period and give them equivalent weight and scientific relevance, and the nice feature of these analyses is that the changes are pretty much the same in both of those periods of time and then the related question is to whether the rate of reduction of glucose with titration of Toujeo versus Lantus had an effect on hypoglycemia rates is an interesting one, we haven't done a full analyses to tease that out yet. My own opinion is that, that may account for some of the difference, but it doesn't account for the differences that are seen following the eight-week period, which in some of the studies, notably the Japan 2 study, where the differences in hypoglycemia rates continued to accelerate after the eight-week period. So obviously, we need more analyses. I think there's a difference between the two insulins both early and late.

I think what we will need to do more and more is ask ourselves how this information is relevant from a patient point of view, rather than from a metric or arithmetic or data analysis point of view. Now experiencing hypoglycemia in the first week – the first few weeks of titration, we know is critically associated with the poor compliance and adherence. And we know that patients initiating insulin and the time they're titrating do experience frequent hypoglycemia. I mean the recent case of the Tresiba study showed that the hypoglycemia in the very first few weeks of titration, it offers a critical challenge for patients. So to us, a new insulin, like Toujeo, that is the initiation of treatment because it's not associated with the typical drawbacks of initiation, which are hypoglycemia or weight gain we think is a very relevant data.

Q: Going back to the Japanese trial and the consistency amongst the EDITION trials, the Japanese curve actually looks different than the EDITION 1/2/3 curves with a parallel curve after the titration in the 1/2/3 trials but a continuous divergence in the Japanese patients. Thoughts on what could account for that difference? Is it for instance that the Japanese patients are thinner, or are they actually just more aggressively managed, so that they get, relative to their body weight, higher insulin doses?

A: I think there maybe are two factors that, at least theoretically, may affect the difference in the shape of hypoglycemia accumulation curve. The first is that the Japanese type 2 study was exceptionally well conducted with a very high retention rate, and a very consistent titration rate. And the result of that, I think, is that this emphasizes the differences between the two insulins and allows the difference to continue to display itself as people continue to titrate and remain in the trial, the long end of the trial. But the other, and I think more important, reason is that the Japanese patients enrolled were smaller and leaner and, therefore, required much lower doses of insulin – even after the titration, about 25 units a day, and at lower doses like this, the differences in pharmacokinetics are probably more important. U100 insulin in those people, quite often, did not extend to 24 hour duration of action. And therefore there was a greater advantage in the leaner patients of the U300 preparation.

Q: We have been talking about disease management in type 2 diabetes since the early 1990s and, now, here is Sanofi in 2014 calling it Integrated Care and trying to solve the problem. So what has been wrong or what has been missing in all the previous disease management approaches, and what are you trying to do differently? And also, can you make it a little bit more tangible what we should be looking at, what you will be measuring to show that you're on the right track? And what would also be helpful if you give us some idea about timelines during which you want to come up with new solutions such as the patch pump?

A: Yes, you're right. There are a lot of talks about how to have a disease approach. I think however that the pharma companies have tried different type of approaches, and I do think that Sanofi has a very unique approach into this. And this is actually part of the reason why I was motivated in joining the company coming from GE Healthcare, where I have long-term medical device development experience as well as some pharma experience, as the last business I was running actually was pharma business within GE Healthcare.

So what is important when you're trying to do something like that in bringing two worlds together like the drug development and the devices. And actually I did have some experience of that in my last position, my previous company, to really operationalize it. It is to have enough expertise about the different areas you're trying to build in, but also have people who have the ability to understand the different worlds so that they can act as people who bridge the different worlds. So why I say that we are operationalizing is that first we have created this division, and I mean this Diabetes Division was created a couple of years, which increased the focus around the disease area itself. And then the next thing we did, and actually did recently, is that we are the first pharma company to have hired a Chief Patient Officer whose role is to really bring the patient at the center of how we develop these drug and these solutions, and in the couple of months that Anne Beal has been with us in the company working with Pierre's team, we already see a different approach in how we actually think about it.

The other important thing was actually the establishment of an integrated care center of excellence so that actually we can have or we can develop expertise and have people who understand the med-tech development, understand the software development, understand digital health, understand IT solutions with some experience of connecting that with the world of healthcare. So we brought experience actually from the outside, but this integrated care center of excellence led by Paul Sekhri who has a large experience both in pharma, but also with start-up and hi-tech companies in the world of devices, is working with the teams that we had in diabetes but also in our own device development.

So I do think that this is a change in the way you approach it. The development of devices is the core competency that was not necessarily core to Sanofi and the intent is not to reinvent everything, but it is to have enough people in-house who can actually enable to have this external innovation model, an external development model. So that's one big thing that makes it more tangible and more real and while why we are more comfortable with the progress that we can make here.

The other thing is that how do we measure it? I think here I have to say that the progress in technology has been extremely supportive of what we can hope for. Now, we all know that we're surrounded by quantified-self devices, you know with sensors, etc. I mean, why is that? It's just because the technology enables to track, measure and give feedback loop.

So that is true also for our integrated care approach. You can now think that you can have a lighter and more real-time feedback loop that can help you measure the impact. Now how to measure the impact on the adherence? I mean, we do need to start by demonstrating this in populations where we can have this overall measurement, either at a population level or at subset of patients' level so that you can actually measure the impact of using this solution.

Now one of the examples I mentioned earlier, for example diabeo in France, we do have a clinical trial going on, which was one of the first with the intent is to measure the clinical – the medical and economic value of leveraging mobile health in delivering healthcare.

Now to close, in terms of timeline, we are actually working on the project and we'll communicate those when we are ready to and so we'll do that in due time.

Q: It's clear that you are getting some additional benefits from this product, you're getting good A1c with lower hypo, but I think we've forgotten somewhat the original concept of the product was having the high unit dose concentration. We know that about a third of Levemir and Lantus patients need two shots, and this could replace it with one. You haven't really talked about much in terms of whether you're going to use that as part of the commercial positioning of this product at all, so could you talk to that?

A: Yes of course, there are some elements that are connected with these patients that are taking higher volumes. The benefit and the value of Toujeo is that we have this concentrated insulin, which means that you have one third of the usual volume that would be used by Lantus patients, for instance. So that makes the solution attractive. Now in terms of potential positioning this product or this solution is not only for people using large volumes of insulin. This – as I said, this solution is the new gold standard for people initiating insulin naïve patient or for people that have to switch and have to switch from Lantus to Toujeo. So, it’s not bad actually being able to avoid taking two shots instead of one shot instead of two shots. So, it's good. But clearly the strategy and the positioning of this product is not, at all, actually focused on this patient population. It's an additional benefit, but it's clearly the next gold standard.

From a scientific point of view, the data actually support that. If we look again, at the Japanese study, both the type 1 and type 2 study, the body weight of these people, the BMI, the insulin requirement are typically those of people requiring much less insulin addition compared to American or to European patients, and despite this very significant difference in insulin requirement, we see that the value of hypoglycemia reduction associated with Toujeo holds true. So, I think the science will support a much broader positioning.

Q: Returning to the issue of zero to eight weeks or nine weeks and beyond, you said there is no standard way to measure hypoglycemia. But, my question is, does that mean that regulators look equally at zero to eight weeks and nine to six months or do they – are they likely to weight zero to eight-week data more heavily than the pre-specified endpoint?

A: So, just let me add a comment on the hypoglycemia in the first eight-week question. I think the regulators, at least the FDA with which I'm more familiar, are showing increasing understanding of the complexities of diabetes management. And I believe that they will, of course, take very seriously the predefined hypoglycemia endpoint and insist that some favorable findings are present there, which I think there are. And they will also be interested in the first eight-week interval of time because they understand that in clinical practice, under different conditions either the early interval or the later interval maybe the more problematic or more important one. And so again, I do believe that both from the clinical point of view and the regulatory point of view the consistency of the findings throughout the studies over different time intervals and with different definitions is one of the important observations in the study so far.

In recent clinical development, we have seen that sometimes the pre-specified endpoint or the pre-specified window of observation did not match in terms of results with change in that window. So for instance, the time or definition of what is nocturnal, and with Toujeo we see that the expansion of the nocturnal definition does not change the significance of the data. The benefit of the first pace of insulin addition, the first eight weeks does not change in the second part of the study. The night benefit does not change when you analyze your time of the day analysis. The 70 mg/dL cut off for the defining hypoglycemia does not change when you look at 54 mg/dL. So what you see with Toujeo is that you don't have the partitioning of data, which some people will consider the demonstration of the fact that any observation is actually the result of chance. What you see is that the data partition, generally speaking, in the same direction and never partition in the opposite direction. The size of this effect is different in the different analysis but it's consistent from a direction point of view.

Q: Can you confirm that there have not been any signals, any CV safety signals of any sort and any of the EDITION trials with Toujeo?

A: Yes, I confirm there is not a different CV signal. And I'd like to also reemphasize that both in Europe and in the United States, the filing of Toujeo relies on the existence of the Lantus filing record. So, despite the fact that the technicality of filing is different in new drug application or a line extension both filing from a regulatory point of view are based on the existing record. The cardiovascular safety record both in Europe and in the United States has actually introduced the Lantus commercial label. And we're very pleased to see that the analysis of the EDITION program does not reveal any difference in terms of cardiovascular safety between the two products.

Appendix

Table 1: Hypoglycemia endpoints and reported six-month results from Toujeo’s phase 3 EDITION program.

Lilly Diabetes Pipeline Update

Lilly management held a pipeline update presentation on the final evening of ADA – representatives of Lilly management on the call were Enrique Conterno (Sr. Vice President-President of Lilly Diabetes), Dr. David Kendall (Vice President of Global Medical Affairs), Dr. Jessie Fahrbach (Medical Director of Lilly Diabetes), Dr. Gwen Krivi (Vice President of Lilly Diabetes Product Development), and Illissa Rassner (Director of Investor Relations). Prepared remarks focused on the data presented at ADA on the company’s once-weekly GLP-1 agonist dulaglutide, which we learned will be marketed under the brand name Trulicity if approved. That seems like a great name (from the perspective of marketing non-experts, admittedly). AWARD trials 2, 4, and 6 (dula phase 3 trials) demonstrated non-inferiority to Novo Nordisk’s once-daily GLP-1 agonist Victoza (liraglutide) and statistically greater A1c reductions and less hypoglycemia and weight gain vs. Sanofi’s basal insulin Lantus (insulin glargine). A poster (122-LB) on the dulaglutide single-use pen (which we have previously heard referred to as an “auto-injector”) demonstrated that the device was relatively easy for patients to use and reduced patients’ fear of injection. Kudos to Lilly for working out how to hide the 29-gauge needle from patients at all points during the administration process – that reminds of us Insulet’s auto-injector, which many, including us, believe is a major advantage of the device.

During the introduction to the prepared remarks, as well as during Q&A, we gleaned some updates on Lilly’s other diabetes candidates, some of which are partnered with Boehringer Ingelheim (BI): empagliflozin, empa/lina, Lilly/BI’s insulin glargine, Lilly’s novel basal insulin, and Humalog U200. See the table below for an overview of the status of these candidates, including some of the updates from the call and the days following. Notably, Lilly/BI re-filed their NDA for the SGLT-2 inhibitor Jardiance (empagliflozin), with a two-month review cycle expected – that’s a win for the two companies (J&J’s Janssen and AZ have had advantages to date as the only companies with approved SGLTs in the US).

We covered the results presented on Lilly’s pipeline products during the conference – follow the links in this piece to read our conference coverage of the relevant presentations.

Table 1: Diabetes pipeline updates and key comments

Dulaglutide

• Full results from three phase 3 trials (two of which were included in the regulatory package) were presented at ADA, and the results were generally quite positive.
  • Perhaps the most highly anticipated results were from AWARD-6, a head-to-head comparison against Novo Nordisk’s market-leading once-daily GLP-1 agonist Victoza (liraglutide). In that trial, dulaglutide achieved non-inferiority in terms of A1c, and comparable effects on other parameters – the one differentiating factor was that Victoza was associated with a modestly but statistically significantly greater reduction in mean body weight than dulaglutide. Management at multiple points highlighted that dulaglutide is the only GLP-1 agonist to have achieved non-inferiority to Victoza in a phase 3 trial. During Q&A, management stated that dulaglutide is “clearly” more convenient than Victoza and that the company likes dulaglutide’s chances on the market, although management did acknowledge that there appears to be a slight trade-off with regards to weight. Management expressed confidence that the results of AWARD-6 should be enough to ensure optimal reimbursement for dulaglutide. AWARD-6 was not included in the registrational data package for dulaglutide. We look forward to understanding more about how easy dulaglutide is to use; Victoza is very easy to both teach and use, which makes it a fierce competitor, given its head start and very strong safety, efficacy, and marketing
  • AWARD-2 and AWARD-4 compared dulaglutide against Sanofi’s basal insulin Lantus (insulin glargine). The former trial made the comparison on a background of metformin and glimepiride, while the latter made the comparison in combination with mealtime insulin. In both cases, dulaglutide achieved statistically significantly better A1c reductions than Lantus, along with weight and hypoglycemia benefits (albeit with more nausea). In AWARD-2, some concerns were raised about the sulfonylurea background therapy getting in the way of proper insulin titration (due to hypoglycemia concerns), but the study still does show that dulaglutide might be a hypo-friendlier way to intensify therapy from orals. Since SFUs are so widely used, we felt it was terrific to have that SFU “real life” comparison.   
• In addition to the phase 3 clinical data, Lilly presented the results of a study (122-LB) on the dulaglutide single-use pen (SUP), which stands to be an important differentiating factor for the product. The study found that the pen (which management disclosed has a 29-gauge needle) was fairly easy for patients to use, and moreover ameliorated patients’ fear of injection. Dulaglutide is the only one of the three once-weekly GLP-1 agonists on the horizon or on the market that comes as a ready-to-use formulation that does not require reconstitution. The pen (as its name suggests) is for single use, comes with the needle hidden and already attached, and according to the company is similar in size to marketed diabetes pens. The steps for administration are “uncap, place and unlock, inject” – we are eager to learn more details about each step, but management stated during the call that the injection process takes less than five seconds, after which the device automatically retracts the needle so that the patient never has to see it.
• As has been stated during previous company updates, management stated that Lilly views dulaglutide as a means of expanding the GLP-1 agonist class, rather than just a play for share within the existing market. Management suggested that Lilly would want to establish dulaglutide as an initiator injectable for type 2 diabetes patients. Lilly does not have a basal insulin (which is an initiator injectable for many type 2 diabetes patients), and the fact that Lilly designed phase 3 trials to compare dulaglutide to basal insulin shows that they see potential in positioning dulaglutide as a patient’s first injectable (and run less of a risk of cannibalizing sales of their already-marketed products). We think it’s smart to market as a first injectable – that’s already what we believe Novo Nordisk’s Victoza represents.   
• Dr. Jessie Fahrbach (one of Lilly Diabetes’ Medical Directors) announced that, if approved, dulaglutide will be marketed under the brand name Trulicity. Dulaglutide is currently under regulatory review in the US and EU. We’re not sure why, but Trulicity seems like a great name – it rolls off the tongue, seems associated with the word “true”, and is easy to say.

Empagliflozin and Empa/Lina

• Lilly expects to be first-to-market with a DPP-4 inhibitor/SGLT-2 inhibitor combination – we see this as a major advantage. This is in line with previous guidance from both Lilly/BI and chief competitor AZ, which expects to file saxa/dapa (saxagliptin/dapagliflozin) in 4Q14. Notably, while AZ expects to file in the US and EU at roughly the same time, Lilly/BI only plan on submitting empa/lina in the EU in 2015, meaning that saxa/dapa could be first-to-market in Europe – we’ll be eager to see where it is reimbursed. As background, the FDA accepted Lilly/BI’s NDA filing for empa/lina in April (read our report).
  • Lilly/BI presented the full results of two phase 3 studies on empa/lina at ADA, one in drug-naïve patients, and the other in patients on background metformin. The results were generally quite positive, although in the drug-naïve study the combination did not achieve statistically greater A1c reductions than empagliflozin alone, which seemed like a weird fluke.
• So far, BI/Lilly’s Jardiance (empagliflozin) has been approved in Australia and the EU – read our report on the EU approval. The first European launches will be in the UK and Germany.
  • Just as ADA was winding down, Lilly announced that it and BI had resubmitted the NDA for empagliflozin to the FDA – read our coverage.
  • BI/Lilly presented two sets of phase 3 data on empagliflozin at a high-powered oral presentation session on day #4. One study was a 52-week extension of a 24-week registrational trial comparing empagliflozin to Merck’s Januvia (sitagliptin). While the two drugs provided comparable A1c reductions after 24 weeks, at week 76, empagliflozin came out ahead by a margin of 0.23% (p = 0.005). The other data set was from a year-long study comparing empagliflozin to the sulfonylurea glimepiride, in which empagliflozin demonstrated superior A1c-lowering, albeit by a modest margin (-0.66% with empagliflozin vs. -0.55% with glimepiride from a baseline of 7.9%). We bet if the study were longer, a broader separation in this curve would be seen.

Basal Insulins: Peglispro and LY2963016 (“Biosimilar” Insulin Glargine)

• Topline phase 3 data released last month on Lilly’s novel hepatoselective basal insulin demonstrated consistently superior A1c reductions vs. Sanofi’s Lantus (insulin glargine), but also elevations in lipids and liver enzymes. During Q&A, management stated that based on of the current data and risk/benefit assessment, Lilly does not plan to target the product to a narrower group of diabetes patients, meaning that it will likely target peglispro more broadly. We do think there will be lots of questions surrounding safety. 
  • A poster presented at ADA demonstrated that peglispro acts preferentially at the liver relative to insulin glargine.
  • Lilly plans to share topline phase 3 data from type 1 diabetes trial in 3Q14, the full data set in 2015, and to file in the US and EU by 1Q15.
• During prepared remarks, management briefly discussed Sanofi’s intellectual property lawsuit regarding Lilly/BI’s insulin glargine product. Lilly believes that it/BI’s insulin glargine product does not infringe upon any patents, but noted that the litigation (as well as Lantus’ patent protection into 2015) will delay the product launch beyond the potential US and EU approval date.
  • Results from the two phase 3 studies on Lilly/BI’s insulin glargine demonstrated that the candidate is essentially clinically identical to Lantus.

Other Topics

• Management commented during Q&A on Sanofi’s recent announcement that it is developing a biosimilar of Lilly’s Humalog (insulin lispro) that it expects to move into phase 3 in 2H14. As the company has stated in the past, Lilly believes that the insulin biosimilar market will behave more like a branded market, but did not provide further commentary on biosimilar insulin market dynamics. 
• During Q&A, management stated that oral GLP-1 agonists are an “attractive area” in Lilly’s view, but came short of saying that the company is actually investigating candidates in this area. We believe they may be more interested in being a “fast follower” if others are successful in this area, though the research certainly seems time consuming.

Questions and Answers

Q: With regards to the Humalog biosimilar that Sanofi talked about today going into phase 3, how are you thinking about the market?

A: Regarding Humalog or lispro biosimilars, and in particular related to Sanofi's announcement, we expect a number of biosimilars for a number of different insulin products in the future. We are clearly developing our own insulin glargine product. I’m not sure that I could characterize our expectations for market dynamics, other than that we expect this market to behave like a branded market as opposed to a generic market, whether it's in the case of glargine, lispro, or other types of insulins.

Q: What are your thoughts on Novo Nordisk's semaglutide and TransTech’s TTP-054? Do you see the market going in the direction of oral GLP-1s? Are you interested in an oral GLP, or is that path too risky for you? 

A: It's difficult for me to comment on semaglutide. Novo Nordisk has some phase 2 data on different doses, which show different levels of tolerability. We really have to wait for their phase 3 data for us to understand the overall profile of semaglutide.  As it relates to oral GLP-1s, we do think this is an attractive area, and one that I think a number of companies in the industry are interested in. 

Q: Based on AWARD-6, can you talk a little bit more about how you see dulaglutide positioning relative to Victoza, and how do you think about the once-weekly dosing vs. modestly lower weight loss? Also, how are you going to approach the launch of dulaglutide? Will you target the existing users of GLP-1 agonists?  How are you thinking about the ultimate size of the GLP-1 market and what it takes to get there? It seems like there's a lot of promise here.

A: On dulaglutide's positioning, we see dulaglutide as an important catalyst for the GLP-1 class. Although we have conducted AWARD-6 vis-à-vis liraglutide, our aim is to look at dulaglutide as foundational injectable therapy for type 2 diabetes; our focus is not simply to switch patients from liraglutide. We conducted AWARD-6 to ensure that we could receive optimal pricing reimbursement and access for our product.  In terms of the tradeoff that will be made, we do like our chances in terms of what we offer as a complete package. Clearly, our product is more convenient than liraglutide, since it involves significantly fewer injections. We do see higher weight loss from liraglutide, though it is modest: 0.7 kg over a 26-week period. So that is an additional 156 injections, if you wish, for 0.7 kilograms of incremental weight loss on a 90-plus-kilogram person. We do like our chances, but we need to view this drug in the broader spectrum of diabetes therapies, not just the GLP-1 class.

Q: What about the launch of dulaglutide and the size of the market potential?

A: It is a catalyst for the GLP-1 class, and it is difficult to say to what extent this is going to allow this class to accelerate. Our aim right now is to grow the GLP-1 class and establish this product as foundational injectable therapy for type 2 diabetes.

One additional catalyst is the REWIND study, a cardiovascular outcomes study we’re running. Should any of the outcomes studies show CV benefit for this class, that could be an additional catalyst to grow the class.

Q: What is the new needle size for dulaglutide? If I remember correctly, it's slightly larger than Victoza’s needle.

A: The single-use pen has a 29-gauge needle, and it's already attached and hidden. 

Q: Why do you think dulaglutide had slightly lower weight gain versus Victoza. Is that because the product is crossing in the CNS space less than Victoza, or is there some other physiological reason for it?

A: As a reminder, from a baseline mean of 94 kilograms, both groups had clinically significant weight loss in the 3-3.5 kg range, with slightly less weight loss for dulaglutide of 0.7 kg. When we looked in the clinical trial database for potential reasons to explain this small difference, there was really no reason within the data that we could find. When we looked at treatment compliance, as well as incidence, severity, and patterns of nausea over time, all were similar for dulaglutide and liraglutide. So beyond that, there's no real reason that we could find within the clinical data. 

Q: For AWARD-4, to put those results in context, what were the insulin lispro doses were for each of the three arms of that trial?

A: The glargine plus mealtime insulin group had a mean total insulin dose of 130 units, equally split between glargine and lispro. The dulaglutide 1.5 mg group had a mean dose of 93 units at the 26-week endpoint, and the 0.75 mg group had a mean dose of 97 units at the 26-week endpoint.

Q: Previously, you mentioned numerical superiority for dulaglutide versus Victoza that would help in payer negotiations. Can you update us on how you're thinking about pricing versus Victoza? 

A: The key here is that by being able to show non-inferiority, we are going to be in an optimal position to obtain adequate pricing for our product. Clearly, any numerical difference in this regard always influences the negotiations and discussions with the payers. I can’t comment on our pricing strategy at this stage, but we feel comfortable that we'll be able to get an adequate pricing reimbursement and access to our product. 

Q: On the SGLT-2 fixed-dose combination, could you outline how you view the size of the opportunity and where you see the ultimate split of mono versus combo use?

A: We see empa/lina as a very significant opportunity, in particular for patients that are on metformin. It provides a great alternative for people with type 2 diabetes. We also believe that this fixed-dose combination makes both of our brands, Tradjenta and Jardiance, stronger. So it is truly a very important fixed-dose combination for us. We are very pleased that we are going to be the first to market with it.

Q: Are there, any plans to go forward with the SGLT-2 inhibitor for type 1 diabetes? I know that Astra is starting phase 3 before year-end.

A: We have not disclosed those plans.

Q: On AWARD-6, did you do any measurements of the heart rate or blood pressure changes? If so, how do they compare to liraglutide in terms of significance or non-inferiority?

A: For AWARD-6, there were no differences between groups for vital signs. In both groups, there was a modest decrease in systolic blood pressure, which is consistent with what we've seen in our other studies. There was a neutral effect on diastolic blood pressure and a slight increase in heart rate of two to three beats per minute.

Q: On peglispro, I realize there's no data to present to the ADA, but it was clear from being in San Francisco this weekend that the potential liver signal was being more widely discussed. Are you still targeting a universal approval process for peglispro? Will you target the drug towards a more high-risk patient population, severely obese high A1c, where the benefit/risk equation is more favorable?

A: On basal insulin peglispro, BIL showed superiority to insulin glargine in each one of those trials when it comes to A1c, lower nocturnal hypoglycemia, and comparable to less weight gain. We think that those benefits are very significant. In fact, the superiority when it comes to A1c is truly unprecedented. We will not be targeting the product towards a narrower audience based on the data that we have seen so far.

A: The clinical measures of liver function studies as recorded in the top-line results did suggest small numbers of individuals with increases in ALT above three times the upper limit of normal. The full details of those data will await completion of the full phase 3 program. As released in the top-line results, there were no cases of Hy’s law or measures of significant liver hepatotoxicity. These clinical measures and other measures that are important to the clinical management of type 2 diabetes for the peglispro molecule will be released at future scientific meetings and in peer reviewed publications once the program is complete.

Q: At this point, are there any factors that may lead to an FDA Advisory Committee panel for dulaglutide later this year?

A: Dulaglutide is currently under regulatory review, and we have nothing further to add. We cannot speculate on anything at this time.

Q: On the new insulin glargine product, do you have any concerns on how regulators or physicians might view immunogenicity data so far?

Regarding the rates of antibody formation, both overall as well as treatment-emergent antibodies, were similar in both phase 3 studies. One included over 500 patients with type 1 diabetes, and the other was double-blinded and included over 700 patients with type 2 diabetes. Most importantly, while there were low levels of low-binding antibodies in the trial, and these were similar between the two treatments, there were no implications for clinical efficacy or clinical safety. In both phase 3 trials, we showed similarity in clinical efficacy based on the reduction of A1c from baseline, as well as clinical safety, including hypoglycemia.

Q: First, for AWARD-2 and AWARD-4, certainly we've seen that you were able to demonstrate that greater A1c reduction, less hypoglycemia, and obviously less weight gain in those clinical trials. How do you see the AWARD program potentially shaping the ADA treatment guidelines? It seems as though there might be an opportunity to displace Lantus here. What timing do you envision for a change in the treatment guidelines?

A: The entire AWARD program was designed to assess the clinical efficacy, safety, and tolerability of dulaglutide across the spectrum of patients with type 2 diabetes, from those treated with initial therapy to those treated with multi-dose insulin therapy. It would be improper for us to speculate how professional organizations may view these data. But we remain very confident in the development of this program. In studies AWARD-1 through AWARD-5, dulaglutide 1.5 mg demonstrated clinical superiority to a variety of commonly used agents in the treatment of type 2 diabetes. Beyond that, we will depend on regulatory review and review of these clinical data by professional societies in the clinical community to make those treatment decisions.

Q: Regarding empagliflozin, the SGLT-2 class seems to have had some relatively robust uptake. Can you comment on monotherapy and combination therapy for the SGLT-2s, what percent of the time they’re being used with metformin, sulfonylureas, DPP-4s, etc, and how you envision empagliflozin being positioned there?

A: We are at this stage unable for strategic reasons to comment on the exact positioning for the product. From what I can share, the way we should think about empagliflozin is that we have a very comprehensive data set from our clinical trials. In addition to that, two very significant events are going to help the empagliflozin franchise: (i) the fixed-dose combination of empagliflozin and linagliptin, which we have already submitted to the FDA; and (ii) the potential CV benefit from the outcomes trial that we expect to be reported in the first half of 2015.

Zealand Pharma Analyst Breakfast

Zealand Pharma held an ADA analyst breakfast on the morning of Saturday June 14^th, in which new Chief Scientific Officer Dr. Torsten Hoffmann and other members of senior management provided commentary on the company’s pipeline and partnered products for diabetes. Zealand’s most recently approved diabetes product is the once-daily short-acting GLP-1 agonist Lyxumia (lixisenatide), which Sanofi has launched in Europe (including in the UK and Spain), Japan and other overseas markets. Surprisingly, management commented that they consider chances of Lyxumia showing cardioprotection in its CVOT ELIXA to be relatively slim. However, management also noted that the room for downside is also low due to the class’ beneficial effect on CV risk biomarkers, and that neutral results (with perhaps a trend towards benefit) would still be positive for the class. Lyxumia’s greatest potential clearly lies in its “LixiLan” fixed-dose combination with Sanofi’s market-leading and widely used and widely trusted basal insulin Lantus (insulin glargine). Zealand voiced confidence in Sanofi’s capability and experience in the basal insulin market – although there will be more competition in this space as Lantus’ patent protection expires next year, Zealand noted that type 2 diabetes patients don’t currently switch basal insulins frequently, and that, although there may be competitor products that are priced differently, Sanofi should lead the market for the foreseeable future. This will be very interesting to see when Sanofi’s next-gen basal insulin is approved – in the US, there appears to be more resistance to pricing increases and we assume the next-gen insulin will not have much of a premium but that Lantus will be discounted to some degree (perhaps only slight, at least to start). Notably, Zealand featured new data on two preclinical pipeline candidates at ADA: ZP-GA-1, a compound from their stable liquid glucagon receptor agonist program and a GLP-1/GLP-2 dual agonist program. We learned that the former candidate could move into clinical development later this year, and that based on the current development plan, an NDA as early as 2017 is possible.  

• On ELIXA, the cardiovascular outcomes trial for Lyxumia that is gating for US resubmission: management suggested that the potential that the trial will show cardioprotection is relatively low, but that the potential that a worrying signal will emerge is also quite low. We were a bit surprised to hear this, as there have been hopes that GLP-1 agonists could show cardioprotection due to the combined effect on glucose and body weight, but this may have just been managing expectations – obviously data is not available yet. We do think that longer trials would be more likely to show cardioprotection but the trial design for most CVOTs is just getting the minimum number of events – so some companies have just put in a higher number of patients. Management confirmed, of course, that there is no actual insight from ELIXA itself, which is still blinded. Overall, Zealand sees non-inferiority as the most likely outcome, and one that will be sufficient for the product to be successful on the market. We wonder if the opinion would be different if the expectations were that the trial would take much longer with a fewer number of patients and the same number of events needed before the trial was over.
• On Lyxumia’s current market performance: Sanofi suggested during its 1Q14 update that Lyxumia holds a roughly 10-20% share across various European markets, but Zealand management noted that this is not fully reflected in the relatively modest $7 million sales total in 1Q14.
• The company ended the presentation with an indicative forecast for the status of the diabetes/metabolic pipeline by the end of 2015:
  • LixiLan is expected to be filed for regulatory review;
  • Lyxumia is expected to be resubmitted for regulatory review in the US;
  • The GLP-1/glucagon dual agonist ZP2929 (which was recently dropped by BI as the lead candidate for the companies’ GLP-1/glucagon dual agonist program) is expected to be ready for phase 2 (the company has expressed its intentions to partner ZP2929 before Phase II);
  • A new GLP-1/glucagon dual agonist lead candidate will have been selected for the BI partnership, and it is forecast to be in phase 1;
  • A candidate for an undisclosed diabetes/obesity target from the drug discovery partnership with Lilly is expected to be in phase 1;
  • A novel preclinical candidate for diabetes and/or obesity is expected to be in preclinical development.

Questions and Answers

Q: If you look at the LixiLan phase 2b data, do you have an explanation for the weak additive performance you see when you added lixisenatide?

A: If you look at the performance of Lantus, Lantus performed better than we have seen in other clinical trials. Sanofi is looking into the reason, but if you look at the absolute results for LixiLan, they are very strong with an overall HbA1c lowering to 6.3% with weight loss, low GI side effects and no increase in hypos compared to Lantus alone

A: Based on Lantus being a strong insulin that doctors know a lot about, and that the US is the biggest market for diabetes, we feel confident that the launch of the LixiLan combination will be very strong.

Q: In phase 3, what is the average additive effect of the GLP-1 agonist component that you expect to see?

A: I do not know off the top of my head, but I would suggest that something in the range of 0.4-0.5% would be what we would expect to see.

A: It is important to keep in mind that for agents that primarily control postprandial glucose excursions, A1c is probably not the only relevant parameter to give the full answer of the long-term benefits to patients. We do not know exactly what the best biomarker is, and we’ve been discussing with Sanofi the possibility of doing research on what the best biomarker is to show the clinical importance of reductions in postprandial glucose.

Q: Is LixiLan’s primary advantage the potency, or the fact that patients could use it to intensify treatment earlier?

A: I think it is more the latter factor. It could change the treatment paradigm, and you could see patients move directly from orals onto a combination injectable. That is how I see the strength of the trial with regards to the current patient need. Most patients now go on basal insulin for ten years, gain weight, and only much later do they start on a GLP-1 agonist. 

Q: When is the glucagon analog expected to enter clinical testing?

A: We plan to start clinical trials this year with our lead product, and if everything goes right with the current expectations of conducting mainly bioequivalence phase 2/3 trials, we could file an NDA as early as 2017.

Q: In your early stage pipeline, can you prioritize each agent in terms of how important a partnership will be?

A: […] We could take the glucagon agonist program all the way ourselves, whereas for our GLP-1/gastrin and GLP-1/GLP-2 programs we are looking for partners for the clinical development.

Q: What is the timeline for selecting a new lead candidate for the partnership with BI?

A: We have a shortlist of molecules that are on their way to SoPD (start of pre-development) nomination. We would expect BI to select a new lead this year.

Isis Investor Event

The morning after the poster presentation of phase 2 data for Isis’ glucagon receptor antagonist (ISIS-GCGRRx), the company held an investor event next to the Moscone Center in San Francisco to discuss the results and share its vision the agent’s future. Management highlighted that within four-to-five weeks of ISIS-GCGRRx initiation in the 13-week trial (n=75), the average patient, no matter his/her baseline fasting glucose level, reached euglycemia (as measured by FPG). Isis thinks that part of ISIS-GCGRRx’s success lies in it striking a middle ground between DPP-4 inhibitors and GLP-1 agonists in terms of elevating GLP-1 levels: ISIS-GCGRRx increased GLP-1 levels up to four-fold, which is a greater rise than that driven by DPP-4 inhibitors (1.9-2 fold), resulting in better efficacy. On the flip side, the GLP-1 bump is smaller than that conferred by a GLP-1 agonist; as a result, no participants in the ISIS-GCGRRx arm reported GI side effects. Given the striking A1c reduction seen with ISIS-GCGRRx, Isis was quite explicit about its intention to target people with more serious type 2 diabetes (i.e., A1c >9%; failing multiple OADs, or insulin). Isis is planning to conduct further dose refinement studies, and is seeking to partner the agent before moving it into phase 3 testing.

• As background, the double-blind, 13-week trial randomized type 2 patients on stable metformin therapy to placebo (n=26) or Isis’s ISIS-GCGRRx (n=23 for 100 mg dose, n=10 for 200 mg dose with load, n=16 for 200 mg dose without load).
• Management highlighted that within four-to-five weeks of ISIS-GCGRRx initiation, the average patient, no matter his/her baseline fasting glucose level, reached euglycemia (as measured by FPG). In the intent-to-treat analysis, ISIS-GCGRRx provided statistically significant A1c reductions (ranging from -1.3% to -2.0%) vs. placebo (0.16%). Indeed, a relatively high percentage (ranging from 48-75%) of patients in the ISIS-GCGR groups achieved an A1c of ≤7% (for comparison, only 13% of the control group reached this goal).
• According to Dr. Robert Henry (University of California, San Diego, CA), during the event, 20% of people with type 2 diabetes have an A1c >9% (and 12% have an A1c >10%). Additionally, he noted than 50% of people on a combination of oral agents are failing treatment, as is 30-40% of people on an OAD and either insulin or a GLP-1, and 10-20% of people on insulin and a GLP-1.

--by Hannah Deming, Jessica Dong, Sabrina Lee, Emily Regier, Manu Venkat, Michelle Xie, and Kelly Close