New Era Beckons for Zealand as Lyxumia Gains Approval
By Cormac Sheridan
Shares in Zealand Pharmaceuticals A/S hit an all-time high Monday on news that it will shortly start logging double-digit percentage royalty payments from its partner Sanofi SA, following formal European Union approval of the once-daily glucagon-like peptide 1 (GLP-1) agonist Lyxumia (lixisenatide, AVE0010) in Type II diabetes.
"It marks the beginning of a new era. How many European biotechnology companies have commercial products?" Zealand CEO David Solomon told BioWorld International. "This puts us on a path to sustainable and durable profitability."
Commercialization of the drug is solely in Paris-based Sanofi's hands.
It has not disclosed the level of reimbursement it will seek, but the drug will be priced at a discount to the market leader Victoza (liraglutide), which is sold by Copenhagen, Denmark-based Novo Nordisk A/S.
"We will launch Lyxumia in the EU at prices that will be competitive vs. existing GLP-1 receptor agonists, to ensure rapid and broad access in all EU markets. Additional information will be provided at the time of individual country launches," Phil McNamara, spokesman for Sanofi's global diabetes division, told BioWorld International.
Victoza racked up DKK9.5 billion (US$1.7 billion) in sales in 2012, $491 million of which it reported in the fourth quarter. Bristol-Myers Squibb Co. and AstraZeneca plc reported a combined $225 million in fourth quarter sales for their shared GLP-1 franchise, based on twice-daily Byetta (exenatide) and its extended-release counterpart Bydureon.
According to some analysts, that discount could be as much as 25 percent in some markets. Given the size of the market on offer, however, Sanofi and Zealand still have blockbuster ambitions for the product. Its immediate target is the 1 million patients on Lantus – Sanofi's basal insulin analogue – who are overweight but who still have glycosylated hemoglobin levels (HbA1c) above 8.
Data from a Phase III trial of a combination pen device, LixiLan, which delivers a fixed dose of the two drugs, are due around midyear, although doctors are free to prescribe the two drugs together as it is. "Almost 30 percent of GLP-1 agonists are used in patients on basal insulin," Solomon said.
At present, according to Novo Nordisk's recently published 2012 annual report, some 700,000 diabetic patients are on GLP-1 agonists. The drug class helps to reduce blood sugar levels, while also combating the weight gain associated with taking insulin. Sanofi will also push Lyxumia as a superior option to Victoza for lowering blood glucose immediately after ingesting a meal.
The deal with Sanofi still has $215 million milestones attached, although $40 million is for a depot formulation of Lyxumia, which is not actively being pursued at present. For now, Victoza's once-daily dosing regime is the dominant paradigm. U.S. approval of Lyxumia could happen by late this year, or early next year. An announcement that the FDA has accepted a Sanofi NDA for review is thought to be imminent.
Zealand has already reported a net profit for the past two years, owing to the timing of various up-front and milestone payments. A steady flow of revenue will soon put its finances on a firmer footing, although the company is not targeting any particular date for a permanent move into the black. Maximizing value-creating opportunities is its overarching focus, and that will determine its cash usage, Solomon said.
Zealand's main focus is as a pipeline supplier to big pharma. It has ongoing drug development collaborations with Boehringer Ingelheim GmbH, of Ingelheim, Germany, and Helsinn Healthcare SA, of Lugano, Switzerland.
The company is currently mulling its options for danegaptide (ZP-1609), a gap junction modifier in development for prevention of ischemia reperfusion injury. The drug was originally licensed by Wyeth in 2003, but Pfizer Inc., of New York, handed back all rights following its takeover of Zealand's erstwhile partner. It has completed three Phase I trials.
It has no major ambitions to build a commercial infrastructure, unlike many of its regional counterparts, which often retain Nordic rights when partnering their drug candidates. "We have that possibility, but I wouldn't say it's a cornerstone of our strategy," Solomon said. "Our goal is not to build out sales and marketing, just as it's not to pay people to mow the lawn."
Zealand's stock (COPENHAGEN:ZEAL) peaked at DKK105 during trading Monday before closing at DKK103, a gain of 7.3 percent.
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