18 Ocak 2017 Çarşamba Breaking News             Latest US News            New York

Applying to grow, dispense medical marijuana in Pa. will cost you
Nearly 10 years ago, executives at Novo Nordisk NVO -0.50 % A/S wondered whether the company’s decadeslong quest to make ever-better insulin had finally come to an end.The trigger was an impressive set of results for the company’s newest insulin that...

Novo Nordisk Bets on Riskier Insulin Research

Nearly 10 years ago, executives at Novo Nordisk NVO -0.50 % A/S wondered whether the company’s decadeslong quest to make ever-better insulin had finally come to an end.The trigger was an impressive set of results for the company’s newest insulin that...

Novo Nordisk Bets on Riskier Insulin Research

Nearly 10 years ago, executives at Novo Nordisk NVO -0.50 % A/S wondered whether the company’s decadeslong quest to make ever-better insulin had finally come to an end.

The trigger was an impressive set of results for the company’s newest insulin that suggested the product would be difficult to improve upon.

“We just sat there and said, ‘Wow,’ ” research chief Mads Thomsen recalled of the meeting where he and other executives saw the results. “We had kind of realized we were very close to perfection.”

That realization has forced a gear change at Novo Nordisk, the world’s largest insulin maker. For most of its history, the publicly held Danish company, which is valued at about 700 billion Danish kroner ($105 billion), relentlessly re-engineered the same basic medicine.

Now, it is getting into the complex and more expensive business of inventing new forms of insulin, bringing it closer to the riskier drug-discovery activities of the wider pharmaceutical industry.

In Novo Nordisk’s favor is the sheer scale of the diabetes epidemic, which affects one in 11 adults world-wide and is rising. At the same time, it is grappling with increasingly intense competition—its biggest rival in the insulin market is France’s Sanofi SA SNY 0.95 % —and consumers who are less willing or cannot afford to pay premium prices for incremental improvements.

That tougher environment is reflected in Novo Nordisk’s approach to launching its latest insulin, Tresiba, in the U.S.

Its list price, at $443.85 for 15ml, according to Truven Health Analytics, is 10% higher than the equivalent volume of its predecessor Levemir. That is low by historic standards: Levemir sold at a 43% premium to its predecessor when it launched 10 years ago, according to Jakob Riis, who runs Novo’s North American operations.

Health plans and employers typically pay a discount to the list price.

Last week, the company announced it would cut about 1,000 jobs from its 42,300-strong workforce to reduce costs. The move underscores Novo Nordisk’s struggle to maintain strong growth amid the competition in the insulin market, which accounts for more than half its sales.

It wasn’t immediately clear what impact the layoffs would have on the company’s new direction.

Novo Nordisk’s research costs are low compared with its peers, according to Dr. Thomsen. He said the company spent about $2 billion on research for each successful drug, compared with $5 billion to $10 billion for most pharmaceutical companies.

Insulin, a hormone produced by the pancreas, converts sugar to a form that can be stored for future use. People with Type-1 diabetes can’t produce insulin; those with Type-2 diabetes don’t produce enough.

Novo and Nordisk, which merged in 1989, were established shortly after the early-1920s discovery of insulin to extract and purify the substance from the pancreases of pigs.

Until recently, most of the company’s research sought to produce a fast-acting insulin that could be injected as a booster at mealtimes and another “basal” variety that would provide a slow, steady supply the rest of the time.

Patients spent an average of $736 a year on insulin in 2013, up from $231 in 2002, according to a recent analysis published in the Journal of the American Medical Association, though the costs can add up to thousands of dollars annually for those on high-deductible health plans.

Novo Nordisk believes it has reached the pinnacle of these efforts with Tresiba, which remains at a near-stable level in the blood for 40 hours, longer than the 24 hours offered by the previous generation.

Now, the company has its sights on new categories of insulin. Among them: one that selectively acts on the liver; one that can be taken as a tablet, not injected; and one that acts only when blood sugar is too high, eliminating the risk of dangerous dips in blood sugar that occur when there is too much insulin in the blood.

“Some of this is really complicated chemistry,” said Thomas Høeg-Jensen, a scientific director at Novo Nordisk who helped to design Tresiba and now leads efforts on glucose-sensitive insulin.

A team of about four scientists spent three to four years developing Tresiba, he said. By contrast, about 10 scientists have been working on glucose-sensitive insulin for four years. He estimated it would take another two years for the scientists to produce a version that could advance into human testing.

“The next steps will take innovation to an even higher level,” Dr. Thomsen said. “But that comes at a very high cost of research and development.”

The amount Novo Nordisk spends on diabetes R&D more than tripled in the last 10 years, to 10.5 billion Danish kroner ($1.6 billion) last year from 3.2 billion kroner in 2005.

Novo Nordisk’s push into more complex research has coincided with a resolve to stick with diabetes and closely related conditions such as obesity, rather than diversify into other disease areas.

The company’s near-exclusive focus on diabetes has helped to make it a top performer in terms of return on research dollars.

Novo Nordisk’s return on research investment, at 15%, is one of the highest in the industry, according to analysis by SSR LLC. By comparison, Novartis AG NVS -0.37 % and GlaxoSmithKline GSK 0.54 % PLC’s returns were 7% and 3% respectively.

Now that the company is venturing into more difficult territory, that narrow focus will be put to the test.

“The convenient explanation for [Novo’s high productivity] is that they just stuck to their knitting,” said Richard Evans, an analyst at SSR. But another is that the “degree of risk-taking in R&D was limited.”

Dr. Thomsen said Novo Nordisk’s research productivity is likely to decline as the company invests in projects that are more prone to fail. But he said Novo Nordisk can afford to take those risks because of the revenue-generating potential of its portfolio, including a treatment called Victoza that increases insulin secretion by the pancreas in Type-2 diabetes patients.

Novo Nordisk also faces competition from companies not historically linked with insulin. Merck MRK 0.81 % & Co. is leading the race to develop glucose-sensitive insulin, having just completed a safety study in humans.

“We are a stubborn company that does make decisions that seem risky to some,” Dr. Thomsen said. “But with the competence of the company, it seems logical to us.”

Our editors found this article on this site using Google and regenerated it for our readers.

Breaking News Headlines

Having left no will, Prince's wishes are taking a back seat to the law | Toronto Star
Having left no will, Prince's wishes are taking a back seat to the law | Toronto Star
A Series of Unfortunate Events is clever, smug and prescient | Toronto Star
A Series of Unfortunate Events is clever, smug and prescient | Toronto Star
US homebuilder confidence, sales outlook slip in January
US homebuilder confidence, sales outlook slip in January
6 Portland post-snow events for finally getting out of the house
6 Portland post-snow events for finally getting out of the house
FTC sues Qualcomm, alleges monopolistic licensing on mobile chips
FTC sues Qualcomm, alleges monopolistic licensing on mobile chips
Dinosaurs? Ride 'em, dig 'em and more in Secaucus this weekend
Dinosaurs? Ride 'em, dig 'em and more in Secaucus this weekend
‘Real Housewives Of Beverly Hills’ Star Lisa Rinna Vows To Stop Discussing Kim Richards’ Sobriety Amid Fallout
‘Real Housewives Of Beverly Hills’ Star Lisa Rinna Vows To Stop Discussing Kim Richards’ Sobriety Amid Fallout
Will Lady Gaga Be Anti-Trump At Super Bowl 2017 Halftime Show? NFL Denies Banning Singer From Talking Politics
Will Lady Gaga Be Anti-Trump At Super Bowl 2017 Halftime Show? NFL Denies Banning Singer From Talking Politics
Edward Snowden Not Pardoned By Obama: Why Chelsea Manning Got Clemency But Not NSA Whistleblower
Edward Snowden Not Pardoned By Obama: Why Chelsea Manning Got Clemency But Not NSA Whistleblower
Police: Fugitive wanted in officer's fatal shooting captured
Police: Fugitive wanted in officer's fatal shooting captured
Citigroup's earnings beat analysts' forecasts
Citigroup's earnings beat analysts' forecasts
US consumer prices up moderate 0.3 percent in December
US consumer prices up moderate 0.3 percent in December
NEWS ARCHIVES