It is actually good news for Novo Nordisk that Sanofi last week signed two billion dollar deals in the diabetes sector while also announcing a new strategy heralding renewed focus on, among other things, diabetes, notes analyst Søren Løntoft Hansen of Sydbank.

His assessment comes in the wake of Sanofi’s deal with Korea’s Hanmi, which could be worth USD 4.18 billion (DKK 29 billion), and the potentially USD 1.38 billion (DKK 9.6 billion) deal with US-based Lexicon - moves that were followed up by CEO Olivier Brandicourt’s announcement of a new strategy.

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“This first of all shows that Sanofi is dedicated to diabetes. After the company’s third quarter interim report, which contained lower expectations for growth in the next three years, there may have been some concerns in the market that Sanofi would reduce its focus on diabetes, and in this way lower prices significantly on the company’s insulin products,” Søren Løntoft Hansen tells ShippingWatch.

Putting all fears to rest

This would also impact the pricing of other insulin products, such as Novo’s Tresiba and Xultophy. There could be some concerns that this would happen.

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“But with the latest agreements, Sanofi sends a clear signal that it is dedicated to developing its diabetes portfolio and sees a significant potential in the diabetes sector. As such, this puts all fears about a downgraded diabetes focus and price reductions to rest - there should be no concerns that Sanofi will tro to wring out the last drops of Lantus and ship it off at lower prices,” he says, adding:

“I see the deal for Hanmi’s products as part of the efforts to both have a product in the once a day segment - with Lyxumia - as well as a product in the once a week segment. It’s of course clear that the long-lasting product segment will gain more ground than is the case  in the GLP-1 market today. There’s no doubt about that.”

New in the market

Finally, there is the deal with Lexicon, which has as its focal point the US-based company’s drug candidate sotagliflozin, a double-inhibitor of SGLT-1 and SGLT-2. The drug is currently being studied in two pivotal phase-3 studies for treating type-1 diabetes, and this is a new area for Novo’s rival.

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The company’s entry could be spurred by Eli Lilly and Boehringer Ingelheim, which in September created a big stir with their SGLT-2 diabetes drug Jardiance. In a comprehensive study, the companies were able to document that Jardiance, as the first diabetes drug ever, turned out to also protect against cardiovascular death.

“As for as I know, Sanofi’s plans to enter the SLGT-2 market is news. The company is hoping that this portfolio expansion will open the door to the tablet market. This could be a consequence of the fact that the SLGT-2 inhibitors have conquered massive market shares in tablet treatments. In terms of volumes as well as higher pricing, they’ve soared into the market - it’s happened really fast. It could also be because Sanofi is hoping for some kind of class effect following the strong Jardiance data.”