Lilly bets quality over quantity will pay off in diabetes battle

Eli Lilly and Co. is counting on the quality of a diversified product portfolio over boosting its sales forces to grab a bigger slice of the $22 billion U.S. diabetes market, a difference in strategy to some of its rivals.

“I don’t think the market is responsive today to putting more and more sales people focused on brands,” Enrique Conterno, president of Lilly Diabetes, said. “We start with the patient and think of all the therapies we could have for him” instead of “trying to force a brand” on both diabetics and physicians, he said.

Earlier this year, Novo Nordisk A/S, the world’s biggest maker of insulin, redirected its U.S. sales force to boost promotion of the diabetes drug Victoza. Soon after, revenue slowed for competing treatments from Merck & Co. and Bristol-Myers Squibb Co., forcing them to increase sales efforts for their own medicines.

Lilly’s strategy may be paying off. Bagsvaerd, Denmark-based Novo Nordisk recently lost a contract to the Indianapolis-based drugmaker to provide diabetes treatments, including insulin and Victoza, to Express Scripts Holding Co., the largest U.S. processor of prescription drug claims.

Lilly plans only “very limited expansion, wherever we may need it,” to its diabetes sales forces as the company prepares to introduce as many as four new therapies by 2016, Conterno said by telephone last week.

Strategy validated

“The environment is playing out in such a way that I think validates our strategy,” said the 47-year-old executive, who is in Barcelona this week to attend the European Association for the Study of Diabetes conference.

Increased obesity and sedentary lifestyles around the world are kindling a surge in diabetes. The market will probably grow to more than $58 billion in 2018 from $35 billion in 2012, according to Standard & Poor’s. In the U.S., diabetes affected almost 26 million people in 2010, of which 1.9 million were adults newly diagnosed, according to the U.S. Centers for Disease Control and Prevention.

Diabetics fail to produce insulin or their body doesn’t use the hormone properly to convert blood sugar into energy, leaving blood-sugar levels too high without treatment.

Alternative treatments

Lilly, the maker of Humalog insulin and Tradjenta tablets, may soon have a number of alternative treatments to offer physicians. In addition to two new insulins, the company’s pipeline includes an experimental GLP-1 agonist and an SGLT-2 inhibitor, treatments that belong to the two main new classes of diabetes drugs. Many of the products are developed with Germany’s Boehringer Ingelheim GmbH, part of a deal struck in 2011.

Lilly plans to start selling empagliflozin, its SGLT-2 inhibitor, and dulaglutide, its once-weekly experimental GLP-1 agonist, in the U.S. and Europe next year, Conterno said. The company will probably introduce empagliflozin in the first half of 2014, and dulaglutide later in the year, he said.

In July, Lilly submitted an experimental bio-similar version of Sanofi’s blockbuster Lantus insulin for European authorization. The treatment’s patent is due to expire in 2015. The company “is on track” to submit the same product for approval in the U.S. later this year, Conterno said.

“We don’t intend to infringe any patents that may be out there,” he said, in reference to Lantus, which last year garnered almost $6.7 billion in sales. Lilly plans to introduce its own version as soon as the patent expires, he said.

Mystery unveiled

Later this year or in early 2014, the company expects to publish initial data from a late-stage trial on LY2605541, another experimental long-acting insulin, Conterno said. Earlier-stage results showed the product was effective but linked to an increase in liver enzymes, a potential sign of liver damage.

“The mystery on this product will be soon unveiled,” the Peruvian-born executive said. Lilly aims to file LY2605541 for approval as early as next year, he added.

In the months to come, Lilly’s diabetes teams will be busy “making sure we get it right with each one of these medicines coming to market,” he said. “It is not that we are going for quantity. Each one of those products within this comprehensive portfolio has significant merit. Our focus now has to be on execution.”

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