Sales of Novo Nordisk's (NYSE:NVO) Victoza exited March at a blistering $2.8 billion annual pace, and with its sales rate still growing by double digits, the drug's peak potential is anyone's guess. Why is Victoza so widely used, and what is it about the treatment that could lead to it becoming used by even more patients in the future? Find out in this clip of The Motley Fool's Industry Focus: Healthcare's podcast.
A transcript follows the video.
This podcast was recorded on Jun. 15, 2016.
KristineHarjes: That suggests that a mechanism for treating this could be to directly reduce your levels of glucagon. In fact, that is exactly what a classic drug [type] called GLP-1 agonists does. These are drugs like Novo Nordisk's Victoza. These are surprisingly very effective, despite there being lots of other ways to go about tackling this disease. Is this the best way? How do these work? What should we look for in these drugs?
Gaby Lapera: I can speak to how they work. GLP-1, if you want to look it up on the Internet, it's GLP-1. It stands for glucagon-like peptide-1 because there's also a 2. Glucagon-like peptide-1 is a hormone that's actually naturally secreted by your body, by your gut. When food hits your gut, your body starts secreting GLP-1. The GLP-1 basically preps your body for receiving a big rush of sugar. That way, it can start releasing insulin from the pancreas earlier. Now, this exogenous -- "exogenous" means a medication or a hormone that comes outside the body, not one that your body naturally produces -- this exogenous GLP-1, which is the drugs that Kristine is talking about, works in the exact same way.
It's really interesting, because GLP-1 has been shown to, obviously, start the pancreas secreting insulin, but it also looks like it increases insulin sensitivity in the alpha cells of the pancreas, which are the ones that are responsible for producing glucagon. That means the pancreas is more sensitive to changes in blood sugar levels. It also increases sensitivity in the beta cells. Not only that -- this is really wild and I don't know if they've proven this in humans yet -- but it looks like GLP-1 increases the mass of the beta cells in the pancreas, which are the ones responsible for producing insulin. That means that they get bigger and that means they are ... It also increases the expression of insulin. More insulin is being produced. The post-translational modification -- so, turning it into insulin -- is also increased, and the secretion of insulin is also increased. GLP-1 is working through all these different methods. Then on top of that ... This is so cool. It's amazing!
Harjes: I love your enthusiasm, by the way.
Lapera: Good. GLP-1 also looks like it decreases glucagon in the body, which makes sense. Not only that -- this the most mind-blowing part of GLP-1 -- is it also has effects on the brain. It looks like it also decreases hunger. This is huge for people with type 2 diabetes.
Harjes: That's something we haven't talked about yet, is the relationship between obesity and diabetes, which is absolutely a factor here.
Lapera: They are definitely co-morbidities.
Harjes: Bringing it back around to these GLP-1 agonists. Todd, can you help us understand here what the market looks like for these drugs?
Campbell: Absolutely. The market for medicine in treating diabetes is big. You're talking about massive patient population. Historically speaking, diet and exercise are your first weapons against the disease. Then you get moved on to some tablets. Metformin is commonly used. Then you can be prescribed a number of other things including injectable insulins. Insulin itself, for example, is a $17 billion a year market. Just in selling injectable insulin, you're talking about $17 billion.
As we said previously, the GLP-1 drugs are incredibly interesting because they may have a lot of benefits on outcomes. That's so important in treating this disease. If you're able to reduce the number of cardiovascular events, then you're saving people's lives. GLP-1 drugs may be able to do that. Of the GLP-1 drugs that are on the market, the granddaddy or the one that jumps out is Victoza, which is Novo Nordisk's GLP-1 drug.
I think from an investor's standpoint, looking at the different players that are involved in treating diabetes is important. Novo Nordisk is probably the largest, we'll call it "purest" play. They do have some other drugs in hemophilia. For the most part, the vast majority of the revenue comes from diabetes drugs like Victoza, like NovoLog, other injectable insulins that they sell. Eli Lilly has got drugs out there that treat diabetes. Johnson & Johnson sells a drug called Invokana, that's a billion dollar drug. For investors looking to have exposure to diabetes treatment, Novo Nordisk would be the one that I think that they should spend the most of their time researching.