Novo Nordisk A/S (NOVOB)’s once-a-day insulin medicine Tresiba carries a higher heart risk than other diabetes treatments, U.S. regulators said. Novo’s shares dropped.
Food and Drug Administration staff questioned whether more safety studies should be conducted on the product, also known as degludec, according to a report posted today ahead of a Nov. 8 meeting of agency advisers. Novo, the largest insulin maker, designed a longer-lasting, higher dose to replicate the steady stream of the hormone that healthy people produce over 24 hours.
Novo, based in Bagsvaerd, Denmark, is seeking to take sales from Paris-based Sanofi (SAN)’s best-selling Lantus insulin, which last year generated 3.92 billion euros ($5 billion) in revenue. Studies “consistently pointed to potential harm associated with the use of the insulin degludec products,” the FDA staff said.
“We see the risk of a significant delay to the U.S. approval as being substantially higher than before,” Jeffrey Holford, an analyst at Jefferies & Co. in New York, said in a note to clients. Holford downgraded the stock to hold from buy.
Novo fell 6.9 percent to 860 kroner at the close of trading in Denmark, the biggest drop since Aug. 5, 2011.
Tresiba’s approval is supposed to produce about 9 billion kroner ($1.5 billion) in 2016 for Novo, according to the average of eight analysts’ estimates compiled by Bloomberg.
Diabetes, caused by the body’s inability to sufficiently produce the insulin needed to convert blood sugar into energy, affects almost 26 million Americans, or 8 percent of the U.S. population, according to the Centers for Disease Control and Prevention. Diabetes treatments have come under closer scrutiny since sales of GlaxoSmithKline Plc (GSK)’s Avandia were restricted because of increased heart attack risk.
Holford said in the note he downgraded Novo because the cardiovascular risk revealed in the FDA staff document today is higher than previously published reports and FDA reviewers suggest there isn’t a benefit for degludec on hypoglycemia.
The advisory meeting will also consider a combination of degludec and an insulin boost meant to be taken once or twice daily during meals. While the FDA panel has been asked by the agency to consider whether more study on the risks should be conducted, it has not been directed to vote on whether that testing must be done prior to approval.
The focus on cardiovascular risk was expected, Martin Voegtli, an analyst at Kepler Capital Markets in Zurich, said in an e-mail.
“I have not seen anything in the documents so far that would change our base case: positive panel vote and FDA approval in early 2013 with the requirement of a post-approval CV outcomes study,” Voegtli said.
Novo attempted to prove Tresiba lowered the risk for hypoglycemia, or low blood sugar, over other insulins. The company had claimed in June that the drug had a benefit over Sanofi’s Lantus in reducing hypoglycemic events.
“We don’t think that’s true, and if you look at the FDA documentation they don’t think it’s true either,” Amit Roy, an analyst at Nomura International Plc in London said in a telephone interview today.
The injection “did not suggest a clear benefit or harm” over comparators for hypoglycemia in Type 1 diabetes, FDA staff said. Consistent findings for a benefit in hypoglycemia are lacking between trials, the staff said.
Tresiba has been approved for sale in Japan and won the backing of a European Union advisory panel on Oct. 19. Regulators in Japan, Europe and the U.S. had access to the same data on Tresiba, Mads Krogsgaard Thomsen, Novo’s chief science officer, said last month when the FDA revealed the focus of the meeting would be heart risks.
Diabetes is the seventh-leading cause of death in the U.S. and is the leading cause of kidney failure and nontraumatic lower-limb amputations, the CDC said.
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