Cancer Warning on Novo's Victoza Is Sanofi's Chance for Revenge

Last Updated Jan 26, 2010 10:25 AM EST

Some of the people cheering loudest at the FDA's approval of Novo Nordisk (NVO)'s new diabetes drug, Victoza, will be Sanofi-Aventis (SNY) sales reps, who promote a rival product, Lantus. Why? Because the Victoza approval comes with a "black box" cancer warning, giving Sanofi sales reps a chance to get their revenge for cancer rumors spread by their Novo rivals regarding Lantus last summer.

Back story: Last year, Novo rushed out a press release that urged people to avoid "unnecessary speculation" over whether Sanofi's Lantus carried "an increased risk of cancer," thus fueling unnecessary speculation over whether Lantus carried an increased risk of cancer. The speculation came after a doctor associated with a third competitor, the Amylin-Eli Lilly diabetes partnership, suggested to Credit Suisse analysts that an "earthquake" was coming on Lantus. Novo reps made hay out of the mess, making sure to chat with as many doctors as they could about cancer risks in Lantus-type drugs.

Now the FDA has saddled Novo with a cancer scare of its own. The black box on Victoza warns of thyroid cancer, and the FDA cited pancreatitis as another worry. There's a 4:1 imbalance of pancreatitis in Victoza users, although that amounts to only 7 out of 3,900 patients.

Over on CafePharma, the Novo reps seem dimly aware that the cancer thing might be a problem, and the Sanofites are gearing up to spread the word about the black box.

And finally: Although Novo's stock is up today, not everyone on Wall Street is on the bandwagon. Jefferies & Co. analyst Jeffrey Holford and his team yawned loudly at the approval. The cancer warnings, coupled with the lack of first-line use indication and an already crowded market for diabetes products makes Victoza overrated, they said:

... the market still looks for unrealistically high peak sales for Victoza given the boxed warning for cancer and once-daily injection profile.
... Consensus peak sales estimates for Victoza are still too high (>US$1bn) in our view based on the US Victoza approval and downstream pipeline of competing GLP-1 analogues with improved (once-weekly) dosing regimens. We see the boxed warning for cancer as being non-commercial given the number of alternative products in the market and expect adoption by US patients and physicians to be slower than expected.