Pharmaceutical companies keep making drugs targeting the glucagon-like peptide (GLP-1) receptor easier for diabetics to take.

The first GLP-1 drug approved in 2005, Amylin Pharmaceuticals' and Eli Lilly's (NYSE:LLY) Byetta, had to be injected twice a day. Novo Nordisk (NYSE:NVO) made a big jump five years later with Victoza, which had to be injected only once a day. Amylin and Eli Lilly followed in 2012 with Bydureon, a once-weekly version of the active ingredient in Byetta. Since then, Novo Nordisk (Ozempic) and GlaxoSmithKline (NYSE:GSK) (Tanzeum) have come out with once-weekly versions and Eli Lilly also added a second once-weekly offering, Trulicity, to its medicine cabinet.

Going from 730 injections per year to 365 injections to 52 has done wonders for sales of the GLP-1 class. Eli Lilly racked up $1.9 billion in sales of Trulicity in the first half of this year. Novo Nordisk registered about $2.2 billion in sales of its GLP-1 drugs over that time frame. Extrapolate that out, and the class is set to bring in over $8 billion this year.

Doctors hands using a blood glucose monitor on a patient near medication on a table.

Image source: Getty Images.

No needles

Last week, the Food and Drug Administration approved Novo Nordisk's Rybelsus, which has the same active ingredient as Ozempic, but in a tablet that's swallowed.

A once-daily pill would have a clear advantage over a daily injection. Most people will avoid injecting themselves if given the option.

But the advantage over a once-weekly injection isn't quite as clear. Patients taking Trulicity or Ozempic may decide that only having to think about their diabetes medication once a week is easier than daily, even if the difference comes with the prick of a needle.

Rybelsus also has fasting restrictions and has to be taken first thing in the morning followed by at least a 30-minute fast from all food, drinks, and other medications.

Even with those restrictions, a substantial number of diabetics will likely try Rybelsus because they don't have their blood sugar levels under control but have avoided GLP-1 drugs and insulin because they fear needles.

Fringe benefits

In addition to cannibalizing sales of injected GLP-1 drugs, Rybelsus will likely take sales from other oral diabetes drug classes, such as SGLT1/2 and DPP-4 inhibitors. The launch trajectory for Rybelsus may ultimately come down to doctors' feelings on extrapolating the data from Ozempic to Rybelsus.

A huge benefit of GLP-1 drugs is that patients lose weight while on them. In fact, the active ingredient in Victoza is sold as a weight loss drug at a higher dose under the brand name Saxenda.

Rybelsus' FDA label notes that patients taking the drug in clinical trials lost more weight than those on placebo, Victoza, and Merck's (NYSE:MRK) DDP-4 inhibitor Januvia. In a head-to-head trial with Eli Lilly and Boehringer Ingelheim's SGLT2 inhibitor Jardiance, the weight loss was pretty similar; Rybelsus won, but only by 0.1 kg.

GLP-1 drugs also appear to reduce the frequency of cardiovascular outcomes: heart attacks, strokes, and the like. Results from an outcomes trial are on the Rybelsus' FDA label, but the study was small with just 61 events for Rybelsus and 76 events for placebo over the median of 16 months that patients were followed.

The cardiovascular data for Ozempic is more substantial, with the patients having been followed for two years, generating 108 and 146 events for Ozempic and placebo, respectively. While Ozempic and Rybelsus have the same active ingredient, it remains to be seen whether doctors will extrapolate the Ozempic data to Rybelsus.

Opportunity, but for how long

As the maker of the only oral GLP-1 drug, Novo Nordisk has a great opportunity to expand its market share, but investors should keep an eye on the rearview mirror for Pfizer (NYSE:PFE), which is developing PF-06882961. As you might expect since Pfizer is still using the code name, the drug is in early development, but chief science officer Mikael Dolsten characterized the phase 1b data as "very encouraging" and the company has already started a phase 2 study.

Phase 3 development for diabetes drugs takes awhile, so Novo Nordisk probably has a four- to five-year headstart at this point. Nevertheless, investors should keep an eye on PF-06882961 because it isn't likely to have fasting restrictions, making it a threat to Rybelsus if Pfizer can get it to market.