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The Coming Diabetes Wars

Thursday - 5/23/2013, 3:58pm  ET

War is brewing in the multibillion-dollar diabetes market. In particular, a major skirmish will soon be fought over which insulin products will emerge as victors in a changing landscape. How are the battle lines taking shape? Here's a quick overview.

The current battle
If the situation remains as it stands now, the war would nearly already be over. The following chart shows how the top insulin analog products stack up.

Source: Company annual reports. 

Sanofi currently dominates the market with Lantus. The French drugmaker also markets Apidra, but hasn't experienced nearly as much success with the product.

NovoLog/NovoRapid, made by Novo Nordisk , comes in a distant second to Lantus. However, adding sales of Novo Nordisk's other insulin analogs, Levemir and NovoMix, to the NovoRapid amount brings the Danish pharmaceutical company relatively close to Sanofi in the insulin market. With human insulin drugs thrown in, Novo Nordisk has the larger market share of the two big players.

That leaves Eli Lilly . Lilly's Humalog stands as one of the company's most successful drugs with $2.4 billion in 2012 sales. However, Humalog trails both Lantus and NovoRapid in market share.

The battlefront could change in the not-too-distant future, though. Lilly's patent for Humalog expires this month. Lantus loses patent protection in the U.S., Europe, and Japan in 2014. Novo Nordisk faces a U.S. patent expiration for NovoRapid and Levemir in 2014 also. NovoRapid went off patent in Japan and Europe a few years ago. However, Novo Nordisk holds formula patents for both products, which provide coverage through 2017.

New combatants
All three leaders in the insulin market have newer products in various stages of development.Until recently, Novo Nordisk looked to be the most likely to get to market the fastest. The company submitted two insulin products for approval in the U.S. -- Tresiba and Ryzodeg. However, the Food and Drug Administration is requiring a further cardiovascular study before considering the products for approval. That could push Novo back to 2015 or 2016 for launching its insulin analogs.

Sanofi has a new insulin glargine formulation similar to Lantus in a late-stage clinical study.  Meanwhile, Lilly has teamed up with Boehringer Ingelheim to develop a biosimilar for Lantus. Earlier this year, Lilly took over full development of another collaboration with Boehringer for a novel basal insulin analog known as LY2605541. Both of Lilly's insulin products are in phase 3 studies.

Halozyme Therapeutics isn't quite as close to commercialization. The company has a mid-stage study under way that combines its rHuPH20 hyaluronidase enzyme with a mealtime insulin analog. Halozyme's enzyme helps the insulin to be absorbed more quickly than it would normally.

The biggest challenger to the status quo, though, could very well come from MannKind . MannKind wraps up phase 3 studies for its inhalable insulin product, Afrezza, in a few months. Afrezza claims a few key potential advantages over rival insulin products.

For one, Afrezza could have lower glucose fasting levels than other insulin products on the market. It also holds the potential to reduce glucose fluctuations after mealtime, which in turn could decrease the likelihood of complications for patients. Last, and certainly not least, the convenience of taking insulin via inhaler rather than injection should be attractive to many diabetic patients.

Winners and losers
Novo Nordisk stands out as the most likely loser over the near term in the diabetes wars. The FDA's pushback on Tresiba and Ryzodeg hurts the company in its bid to overtake Lantus.

Sanofi seems destined to suffer from decreased sales of Lantus after it loses patent protection. While the company has another formulation waiting in the wings, Sanofi will also face competition from Lilly's biosimilar. Of course, Lilly will probably encounter its own problems after Humalog goes off patent. While there isn't a biosimilar for the drug available yet, it's just a matter of time.

Halozyme could be a winner over the long run. Since its product is only in phase 2, though, the most likely path for a quicker victory for Halozyme probably lies in licensing its insulin product to a larger player.

That leaves MannKind. The company first must achieve good results from its phase 3 clinical studies, then finally obtain FDA approval. I think MannKind will accomplish both of these objectives.

The larger challenges lie in finding a partner for commercializing Afrezza and actually succeeding in the marketplace. I suspect that at least one and possibly all of the "big three" insulin drugmakers are in discussions with MannKind. Other large pharmaceutical companies with non-insulin diabetes products are likely also prospective partners.

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