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Novo Nordisk & 4 Other Pharma Stocks in Focus on World Diabetes Day

Zacks

World Diabetes Day is celebrated every year on November 14. The theme this year is ‘Women and diabetes – our right to a healthy future’. The focus is on emphasizing the importance of providing women (diabetics as well as those at risk of being diagnosed with diabetes) with affordable and equitable access to essential diabetes drugs and technologies, self-management education and information needed to achieve optimal diabetes outcomes and strengthen their capacity to prevent type II diabetes. The ninth leading cause of death in women across the world, diabetes accounts for 2.1 million deaths every year.

According to information provided by the International Diabetes Foundation ("IDF"), more than 199 million women have diabetes with this figure expected to rise to 313 million by 2040. Among these, more than 60 million women are of reproductive age with one in seven births being affected by gestational diabetes. Gestational diabetes is associated with a higher risk of type II diabetes in the mother as well as the child.

Moreover, many people with type II diabetes remain unaware of their condition for a long period of time and this may lead to diabetes-related complications by the time the disease is diagnosed. Women with type II diabetes are considered to be 10 times more likely to suffer from heart disease compared to women without the condition.

Other diabetes-related complications include blindness, lower-limb amputation and kidney failure.

Given these statistics and complications, it is not surprising that several healthcare companies devote a significant amount of R&D dollars on developing treatments and devices for diabetes and diabetes management. The diabetes market is highly crowded with companies coming out with innovative treatments promising higher efficacy with lower side effects. Currently available diabetes drugs include different classes of treatments like DPP-4 inhibitors (Januvia, Onglyza, Trajenta), GLP-1 receptor agonists (Victoza) and SGLT-2 (Invokana, Farxiga) apart from metformin and insulin.

In addition to drugs, the diabetes care market includes glucose monitoring systems, insulin delivery systems as well as insulin pumps.

Stocks to Watch on World Diabetes Day

This World Diabetes Day, here is a look at some of the key pharma companies in the diabetes market.

Denmark-based Novo Nordisk A/S NVO is among the key players in the global diabetes market. The company’s diabetes portfolio comprises products like Tresiba (a once-daily new-generation insulin), Xultophy (a once-daily single-injection combination of Tresiba and Victoza), Ryzodeg (a soluble formulation of Tresiba and NovoLog), Fiasp (fast-acting mealtime insulin – a new formulation of NovoLog) and Victoza (GLP-1).

Recent developments include Victoza and Tresiba’s label updates (Victoza’s U.S. label now reflects prevention of cardiovascular events while Tresiba’s EU label reflects significant reduction in the risk of severe hypoglycemia) as well as a positive FDA advisory panel vote for semaglutide. Approval could come later this quarter.

However, pricing pressure in the United States remains a major challenge for the diabetes care market while intense competition across the globe also remains a headwind.

Shares of Novo Nordisk have gained 38.8% year to date, significantly outperforming the industry’s 14.5% rally. Novo Nordisk is a Zacks Rank #3 (Hold) stock – you can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

French drugmaker Sanofi SNY is another key player in the diabetes market. However, the company’s Diabetes franchise is under pressure with key product, Lantus, facing increasing competitive pressure at the payor level and biosimilar competition in several European markets. Toujeo, Apidra, Amaryl, Lyxumia and Soliqua are some of the other diabetes products in the company’s portfolio. Sanofi expects its global Diabetes sales to decline 6–8% annually (at constant exchange rates) over the 2015–2018 timeframe. Pricing pressure, increasing competition and formulary exclusions will continue impacting the segment.

Despite the challenges in the diabetes market, Sanofi continues to work on expanding and strengthening its diabetes portfolio and currently has five diabetes candidates in its pipeline including SAR438335 (GLP-1R/GIPR dual agonist; phase I for type II diabetes), SAR425899 (GLP-1R/GCGR dual agonist; phase II for type II diabetes), sotagliflozin (oral SGLT-1&2 inhibitor; phase III for type I and type II diabetes), SAR341402 (rapid acting insulin; phase III for type I and II diabetes) and efpeglenatide (long-acting GLP-1 receptor agonist; phase III for type II diabetes scheduled to commence this quarter). Late-stage combination studies for sotagliflozin in type II diabetes are scheduled to commence this quarter.

Shares of Sanofi are up 10.4% year to date, compared to the industry’s 14.5% rally.

Diabetes (New Cardiovascular & Metabolic Diseases) is one of the growth platforms at AstraZeneca plc AZN. Key products in AstraZeneca’s diabetes portfolio include Farxiga, Onglyza, and Bydureon among others. Recent approvals include an improved device for Bydureon, Bydureon BCise, and a combination of Farxiga and Bydureon for type II diabetes.

AstraZeneca’s Diabetes franchise sales in the United States are also feeling the impact of intense pricing pressure and competition.

Shares of AstraZeneca, a Zacks Rank #3 stock, are up 20.5% year to date, compared to the industry’s 14.5% rally.

Eli Lilly and Company LLY is another well-known player in the diabetes market. Lilly has a strong portfolio of diabetes treatments including Trulicity (GLP-1), Jardiance (SGLT-2), Trajenta, Humulin, Basaglar, Humalog, and Glyxambi. The company has a diabetes alliance with Boehringer Ingelheim for several of these products. Lilly also has a strong diabetes pipeline. While the company expects pricing pressure to continue in the diabetes market in 2018, the exclusion of Jardiance from the CVS health formulary could also impact the company’s diabetes franchise sales.

Shares of Lilly are up 12.7% year to date, compared to the industry’s 14.5% rally. Lilly is also a Zacks Rank #3 stock.


Merck & Co., Inc.’s MRK diabetes franchise, which accounted for 16.7% of third quarter 2017 pharma segment sales, consists of products like Januvia and Janumet. However, like its peers, Merck’s diabetes segment sales continue to be affected by pricing pressure.

Merck, along with partner Pfizer PFE, is currently seeking FDA approval for ertugliflozin and two fixed-dose combination products (ertugliflozin and Januvia, ertugliflozin and metformin) with a response from the FDA expected in December 2017.

Merck is also a Zacks Rank #3 stock. The company’s shares have declined 6.4% year to date, compared to the industry’s 14.5% rally.

Although the diabetes market is currently facing intense pricing pressure and competition, the market remains lucrative considering the growing prevalence of the disease and the demand for new and better treatments.

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