Disease Analysis: Type 2 Diabetes

Definition

Diabetes mellitus is a group of metabolic disorders which are characterized by hyperglycemia (elevated blood glucose levels) due to insufficient insulin secretion, which in type 2 diabetes occurs in the setting of insulin insensitivity.

Latest key takeaways

• The type 2 diabetes market is dynamic and complex. In the non-insulin segment, while older generic drugs are widely used, especially first-line metformin in the US and EU, the more novel branded drugs are used in a sizable minority of patients, generating over $30bn in sales in 2021. The DPP-IV inhibitors have historically been the most commonly used of these, due to their safety and tolerability, albeit with intermediate efficacy, but GLP-1 receptor agonists and SGLT-2 inhibitors have now overtaken them in usage in the important US market and have curtailed their growth ex-US. The increased usage of GLP-1 receptor agonists and SGLT-2 inhibitors has been spurred by recommendations starting in a 2018 ADA/EASD consensus report for patients with relevant co-morbidities due to benefits on major adverse cardiovascular events (MACE) and, for the SGLT-2 inhibitors in particular, heart failure (HF) and renal impairment, along with related label expansions. This is expected to continue to grow usage of these classes, though intense pricing competition, with increasing rebates in the US, is typical across the indication. Some drugs have been suggested as candidates for the new Medicare Part D price restrictions starting in 2026, but the impact of that is unclear given the high average rebates in place already. In any case, loss of exclusivity will start to take a toll on all of these classes over the next 10 years.
• The SGLT-2 inhibitors have started to bolster their growth with data and label additions for pivotal HF and chronic kidney disease (CKD) trials, including in non-diabetics. Jardiance had taken the lead in the segment, with a strong reduction in cardiovascular death in its diabetes cardiovascular outcomes trial (CVOT), after Invokana faltered due to concerns about an increased risk of amputations. However, Farxiga has been strongly gaining, with explosive growth outside the US in 2021 due to first-in-segment launches for heart failure with reduced ejection fraction (HFrEF) and CKD, along with a surge in emerging markets, with inclusion in China’s reimbursement drug list. In pivotal HF trials, Farxiga showed a benefit on CV death, whereas Jardiance, whose study included more severe patients, did not. This could bolster the view that outcomes differences are just due to differences in the studies and not the drugs. Jardiance has also been approved in heart failure with preserved ejection fraction (HFpEF), in patients both with and without diabetes, which is a co-morbidity with high unmet need, with Farxiga showing positive data and not far behind. Side effects, including an increased risk of genitourinary infections, and safety concerns have held the class back somewhat. Competition with Rybelsus (see below) and loss of patent protection, likely starting in 2025–26, will also have an impact, though Farxiga is being used in fixed-dose combinations (FDCs) with compounds that have novel mechanisms, to treat co-morbidities.
• Sales of the injectable GLP-1 receptor agonists have grown substantially with the addition of a more convenient weekly formulation, Eli Lilly’s Trulicity, which expanded usage of the segment rather than displacing Novo Nordisk’s daily Victoza, which was the first in the class to show a CV benefit. However, Novo Nordisk’s weekly Ozempic, launched in 2018, is more effective, and has helped the injectable franchise stay ahead in sales. It should also help to defend against loss of patent protection for Victoza in 2022–23 in major markets. The battle is continuing with higher doses of both drugs, new CV indications, and Eli Lilly’s GLP-1/GIP co-agonist Mounjaro, which will be important for the company as Trulicity will lose patent protection between 2027 (2028 with a pediatric extension) and 2030 in major markets. Phase III results for Mounjaro showed better glycemic control and weight loss than the 1.0mg dose of Ozempic, albeit with some tradeoff in side effects, and along with data in obesity, suggest the high doses may still have at least moderate advantages over Ozempic 2mg and the 2.4mg dose approved in obesity. However, Ozempic will have the advantage of a CV indication, pending Mounjaro CVOT results which are expected in 2024–25. Nevertheless, the latter is having a strong launch.
• Novo Nordisk is responding to the challenge of Mounjaro by combining Ozempic with an amylin analog (CagriSema), which in preliminary data looks like it may have at least comparable glycemic control and better weight loss than Mounjaro. It also has a combination of Ozempic with a GIP analog, though officials have said they believe CagriSema has a better profile. Eli Lilly moved its own amylin agonist and dual amylin and calcitonin receptor agonist (DACRA) into Phase I in 2022, which could be combined with Mounjaro. They are listed as being in development for obesity, but the company has noted before that it sees insulin sensitization preclinically (and also that DACRA could have a positive impact on bones). Given the strong commercial gains of GLP-1 agonists in diabetes, as well as inroads into the difficult obesity market, a number of other dual or triple agonists are also in development, those these are still early-stage.
• While the GLP-1 receptor agonists cause weight loss, their main side effect is nausea, and as injectables they tend to be used after oral drugs have failed. However, an oral formulation of Ozempic – Rybelsus – approved in 2019, appears to be the most effective branded oral drug, though uptake has been moderated by its lesser efficacy than Ozempic and the need to take the drug on an empty stomach. Interestingly, a Phase III study of an even higher dose of the drug started in early 2021. Small molecule oral GLP-1 agonists, such as Pfizer’s danuglipron and PF-07081532, as well as Eli Lilly’s LY3502970, have fewer restrictions on how to take them, with some early-stage results suggestive of encouraging efficacy, but more data are needed to gain a better understanding of their profiles.
• In Japan, DPP-IV inhibitors are used more commonly at first line, and guidelines are somewhat equivocal about the implications of the CV findings of the other classes for Japanese patients. Nevertheless, SGLT-2 inhibitors have grown substantially, with a lesser increase for GLP-1 receptor agonists, due to a strong preference for oral drugs.
• In the basal insulin segment, with the advent of biosimilars/follow-on copies to segment leader Sanofi’s Lantus, such as Eli Lilly’s Basaglar, Sanofi and Novo Nordisk have introduced next-generation, longer-acting products Toujeo and Tresiba, respectively. Yet, due to continued pricing pressures, especially in the US, these have not prevented overall sales declines, which have been particularly harsh for Sanofi’s basal insulin franchises, with a 40% drop in combined worldwide sales over the past five years despite some stability ex-US. In relation, Sanofi has stopped investing in diabetes research. Prescriptions of Lantus and Toujeo have not declined as rapidly over the past few years in the US, but the introduction of another follow-on, Semglee (Viatris/Biocon), in 2020 is introducing further pressures, particularly as it was designated as an interchangeable biosimilar in July 2021, with later adoption as a preferred brand by a major pharmacy benefit manager (PBM). For broad coverage, Viatris took a dual-product approach for the interchangeable version, with a higher-priced branded Semglee and a lower-priced unbranded version. In response to these biosimilars/follow-ons, Sanofi has launched its own unbranded biologic of Lantus.
• Novo Nordisk’s earlier basal analog, Levemir, was not as popular as Lantus, as it is not as long-lasting and so requires twice-daily dosing in more patients. However, its successor product, Tresiba, has an even longer-acting duration than Toujeo, allowing a broader flexible dosing window, where it can be administered at different times each day. While both Toujeo and Tresiba have shown some evidence for a hypoglycemia benefit over Lantus, the data have been somewhat stronger for Tresiba, which also showed a reduction in severe hypoglycemia in a large outcomes study in type 2 diabetes, but head-to-head PK/PD and longer-term hypoglycemia studies have either shown equivalence or an advantage for the particular sponsor’s drug. While Tresiba has helped to increase combined usage of the Novo Nordisk franchises, it has come at the expense of increasing rebates in the US, so in the past five years, despite combined sales growth ex-US, worldwide sales have declined by slightly over 20%.
• Initial Phase III results for Novo Nordisk’s insulin icodec, the most advanced weekly insulin in development, suggest it could be a useful alternative to daily basal insulin in type 2 diabetes, at least for some patients. Rates of severe or clinically significant hypoglycemia have been numerically double or more in some, though not all, trials of type 2 patients, though neither high on an absolute level nor statistically significant, and in the details released so far the increase has been due to clinically significant hypoglycemia, not severe. It is unclear how much of the increase may be due to slightly better glycemic control achieved in those studies, but in any case, there is still a question whether hypoglycemia may be a more problematic issue for some patients, especially outside of the clinical trial setting. In type 1 diabetes, the drug clearly led to a pronounced increase in hypoglycemia, including rates of severe hypoglycemia, though the latter was reportedly due to a single patient with multiple events. For Eli Lilly’s competing LY3209590, Phase II results in type 2 insulin-naïve diabetics have also shown an increase in such hypoglycemia, with a slight imbalance in patients with severe hypoglycemia in a study of insulin-experienced patients. Weekly insulins could be especially useful in fixed-ratio combinations (FRCs) with weekly GLP-1 receptor agonists, though daily versions of these have not been popular.
• Fast-acting/bolus insulins for mealtime administration are not as routinely used in type 2 diabetes as they are in type 1, and dynamics are somewhat different, due to more exclusive contracting in the US, with the inclusion of mixes, which has made it more difficult for biosimilar/follow-on copies to gain a foothold, though they still contribute to pricing pressure. It has also been more difficult to differentiate next-generation, faster-acting products, though initial ones can be injected up to 20 minutes after the start of a meal rather than just around the start. In response to the introduction of Sanofi’s Admelog, a biosimilar/follow-on copy to Eli Lilly’s Humalog, which along with Novo Nordisk’s NovoLog leads the segment, both Eli Lilly and Novo Nordisk launched their own “authorized follow-ons/generics” with 50% lower list prices in 2019/20, in order to increase competitiveness in plans where patients can end up having to pay a portion of a drug’s gross cost. Net price decreases have driven appreciable US sales declines for NovoLog and Humalog, leading to moderate declines worldwide. Admelog has not been able to penetrate the US market much, but Viatris/Biocon and possibly Sanofi (the status of its candidate is unclear) are pursuing US approvals as interchangeable insulins for their biosimilars of NovoLog, so it will be interesting to see whether that makes a difference. The more recent ultra-rapid-acting formulations have relatively marginal benefits over their predecessors, and Novo Nordisk’s Fiasp only has moderate sales, though it is still early in its ramp. Eli Lilly’s Lyumjev launched in mid-2020 in major markets, though its data are somewhat weaker than Fiasp’s, and expectations are limited.
• In the US, starting in 2023, new Medicare regulations will limit cost-sharing for insulins to no more than $35, while patients could also enroll in plans with that limit even earlier through the Part D Senior Savings Model.
• For the insulins space in general, while companies are looking into glucose-sensitive insulins with a lower risk of hypoglycemia, it is still uncertain how promising these will be.
• Improving insulin sensitivity is a mechanistic unmet need, but pipeline candidates so far have not appeared very compelling, though Twymeeg has shown intermediate efficacy in Japanese patients.
• Given limited budgets for many patients, there could be indirect competition with novel dyslipidemia drugs.
• The overall likelihood of approval of a Phase I type 2 diabetes asset is 6.8%, and the average probability a drug advances from Phase III is 67.1%. Type 2 diabetes drugs, on average, take 9.1 years from Phase I to approval, compared to 10.0 years in the overall endocrine space.