Ladies and gentlemen, thank you for standing by and welcome to the investor call following the approval of Rybelsus in the U.S.A. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. I must advise you that today's call is being recorded, Monday the 23rd of September, 2019. I shall now hand over to your speaker for today, Karsten Munk Knudsen. Please go ahead.
Thank you. Welcome to this Novo Nordisk conference call regarding the regulatory approval of Rybelsus in the U.S. I'm Karsten Munk Knudsen, the CFO of Novo Nordisk. With me, I have our Chief Science Officer, Mads Krogsgaard Thomsen. Present are also our investor relations officers. Today's conference call and slides are available on our website, novonordisk.com. The conference call is scheduled to last 30 minutes. We will start with a brief presentation, followed by a Q&A session beginning in about 10 minutes. Please turn to slide two. As always, I need to advise you that this call will contain forward-looking statements. Such forward-looking statements are subject to risk and uncertainty that could cause actual results to differ materially from expectations. For further information on the risk factors, please see the earnings release and the slides prepared for this presentation.
With this, over to you, Mads, for an update on the approval of RYBELSUS.
Thank you, Karsten. Please turn to slide three. We're very pleased that the U.S. Food and Drug Administration on Friday granted marketing authorization for oral semaglutide with the brand name RYBELSUS. RYBELSUS is indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes. The clinical development program behind RYBELSUS, PIONEER, completed in November 2018 following the readout of the cardiovascular outcomes trial, PIONEER 6. The new drug application for RYBELSUS was submitted to the U.S. FDA on March 20, 2019 through application of a priority review voucher. The submission was based on the results from the PIONEER program, which included around 9,500 adults with type 2 diabetes. Six months after the submission to the FDA, we have now obtained U.S. approval. This means that we've been able to obtain approval of RYBELSUS only 10 months after the completion of the PIONEER program.
Furthermore, we've submitted two drug applications to the FDA for Rybelsus and Ozempic respectively for separate cardiovascular indications in adults with type 2 diabetes and established cardiovascular disease. The expected review completion is by first quarter of 2020. Please turn to slide four. Rybelsus is a glucagon-like peptide 1 receptor agonist indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes. Rybelsus is approved for use in 2 therapeutic dosages, seven milligrams and 14 milligrams tablets, respectively. The regulatory approval of Rybelsus is based on the results from the PIONEER program, where Rybelsus demonstrated clinically meaningful and statistically significant reductions in hemoglobin A1c compared with placebo and leading all anti-diabetic agents, sitagliptin and empagliflozin. In addition, Rybelsus demonstrated a weight loss of up to 4.4 kilograms.
Rybelsus showed a safe and well-tolerated profile across the PIONEER program, with the most common adverse events being mild to moderate nausea, which diminished over time, consistent with the results from other GLP-1 receptor agonist clinical trials. In the cardiovascular trial, PIONEER 6, there were 61 MACE events with Rybelsus, compared to 76 events with placebo, supporting a safe cardiovascular profile. As mentioned, the NDA for a separate cardiovascular indication has been submitted to the FDA, with expected regulatory feedback in the first quarter of next year. We're very excited that we can make the first oral GLP-1 receptor agonist available in the U.S. with a competitive label and thereby expanding the treatment options for adults living with type 2 diabetes. Novo Nordisk has a very strong legacy and long legacy of developing innovative injectable medicines for people living with diabetes.
With the approval of RYBELSUS, we're now able to bring our innovation into the market for all anti-diabetics. With that, over to you, Carsten.
Thank you, Mads. We have decided upon the list price for Rybelsus in the U.S. at a similar level as Ozempic. Following approval, market access negotiations with the Pharmacy Benefit Managers are initiated. Building upon the recent constructive dialogue between our medical staff and the medical staff at the PBMs to ensure understanding of the clinical profiles of Rybelsus. We expect to make Rybelsus available through an early launch in Q4 2019, targeting specialists, and a full launch in Q1 2020, targeting primary care physicians. The go-to-market strategy for Rybelsus will be based on the strike model, hence promotional activities will follow market access, and we'll be diligent in gradually switching more promotional activities to Rybelsus as we build market access, which is similar to what we did with the Ozempic launch in 2018.
The direct-to-consumer advertising is prohibited in the first six months. Expect DTC to be initiated when a solid market access has been obtained. We already now have ample production capacity available to produce Rybelsus at our Danish facilities to support launch and first years of demand. Our Clayton facility is on track to be gradually ramped up during 2021. In short, market access negotiations will be initiated. We prepare for an early specialist launch of Rybelsus in the U.S. during Q4 2019. We have been preparing for this moment for a long time and look forward to bringing a new and innovative oral antidiabetic drug to the market. We are now ready for the Q&A, where I kindly ask all participants to limit themselves to one question. Operator, we are now ready to take the first question.
Thank you very much. Just as a reminder, it is star one for any questions. Thank you. First is from Wimal Kapadia from Bernstein. Please go ahead.
Thank you very much for taking my question. Wimal Kapadia from Bernstein. Karsten, you've mentioned that the list price of RYBELSUS is similar to Ozempic. I guess could you just give us a little bit of context versus the other GLP-1s. Is the product going to be dilutive at the rebate level within your GLP-1 franchise or would you say relatively neutral? Thank you very much.
Thanks for that question there, Wimal. At this point, the list price is similar to the GLP-1s in the marketplace when we look at a monthly script. On a monthly script basis, list price is equal. In terms of comparison with other GLP-1s in the market vis-a-vis list price, that is simply too early to comment on because we are only starting negotiations as we speak. Next question please.
Okay. Next question is from Trung Huynh from Credit Suisse. Please go ahead.
Morning, guys. It is Trung from Credit Suisse. Congratulations on the approval. My question is, what level of coverage do you expect on launch and then after one year? Thanks very much.
Good morning, Trung. I think my response is similar to Wimal's question. We're starting our market access negotiations as we speak, of course we'll be actively discussing with all the payers. How that pans out in terms of how fast and how much access, that is of course a function of whether we're able to get a contract in place with the payers. You can look at benchmarks, that's not necessarily how we'll be faring with Ozempic because it takes two to find a solution.
If I could be cheeky and just ask you what Ozempic's level was after a year.
I'd rather do it this way. Now almost two years from launch, Ozempic is at 90% plus. As you know, we've invited for a Capital Markets Day in November, we'll be able to provide more flavor in terms of the launch penetration and market access status both in the Capital Markets Day in November, but also in connection with our full year results in February.
Thank you.
Okay, our next question is from Michael Novod from Nordea Markets. Please go ahead.
Thanks a lot. Yes, Michael Novod from Nordea in Copenhagen. Just to follow on to that question in terms of maybe you can tie in payer feedback vis-a-vis also the ICER review and your own cost-effective analysis. Is the payer feedback sort of in the same tune as we'll see the ICER review? Can your own cost-effective analysis, can they stack up against the ICER review as well?
I'll hand over to Mads to comment on the ICER review, and then I can provide a brief comment on the payer feedback.
Yeah. We've done our own health economics outcome research using the standard core model technology and so on, and that actually shows, not surprisingly bearing the PIONEER 4 data in mind, that we have a cost-effective product from a cost effectiveness perspective driven in particular by the high A1C lowering that exceeded that of Victoza after one year's treatment. The price we are setting forward is consistent with our own health economics outcome research, and actually according to the medical dialogue we have had with the payers ahead of the approval, it seems like they also think this is an interesting profile.
Do bear in mind that the negotiations with the U.S. payers, there are multiple factors going into that. ICER is only one element of that. Next question, please.
Of course. The next question is from Carsten Løngaa from SEB. Please go ahead.
Thank you very much. I just had a question sort of on how you perceive this launch, because when both Victoza and Ozempic were launched, it was full steam ahead because you also had some very aggressive competitors in the market at that point in time that were taking a share away from Novo Nordisk. Right now it's maybe a little bit of a different situation where you have Ozempic doing extremely well, and you don't have another competing tablet in the market that could take your oral GLP-1 patients away from you. Ozempic is of course a much more profitable product for you. How do you consider this launch and what do you benchmark it up against? Do you benchmark it up against a combined market share in the SGLT2 plus GLP-1 segment, or how do you do it?
Yeah. Thank you, Carsten. In terms of our launch approach, I think you're pointing to a relevant fact that Ozempic is doing very well in the market as you all see in the market data. Segment growth of 30% plus and Ozempic continuing to penetrate in the market showing the quality of that product, which means that we are in a power position in terms of launching RYBELSUS all in the markets. We had good experience with the strike model when we launched Ozempic. We don't want to have physicians write a script and then patients go to the pharmacy, and then there's no reimbursement. We will be pursuing the strike model overall in our go-to-market approach. I think we have some commercial synergies and benefits in terms of go-to-market, because the target audience of Ozempic is very similar to the target audience of RYBELSUS.
In that sense, we have good flexibility in terms of when and how fast to turn on RYBELSUS without eroding Ozempic business. Secondly, in terms of your benchmark, then benchmark-wise, there is no single perfect benchmark to map out how we're doing on RYBELSUS compared to history. You can do all the product benchmarks between the most recent orals in form of the SGLT2s, and you can also look at the GLP-1 injectable benchmarks. There is no one single perfect benchmark to hold RYBELSUS up against. One coming from Mads.
Yes. It is just to say that even though the unaided awareness of Rybelsus is already quite high among U.S. physicians, of course, you will always do the thing that you start out in a limited manner with the specialist, the endos, because they will then start educating the primary care practitioners, which is an important element ahead of going into the strike model, of course.
Okay. Thank you.
Good. Next question, please.
The next question is from Keyur Parekh from Goldman Sachs. Please go ahead.
Keyur, are you on mute or something?
Can you hear me guys now?
Yeah, now we can. Good morning.
Okay. Morning. Sorry. Let me just repeat. It's Keyur Parekh from Goldman. Carsten, Mads, if you can just help us understand based on feedback you've had, either from the endo doctors or the payers, how we should think about the commercial positioning for this asset. Do you want us to think of this as a product patients go on post failing metformin, a product kind of patient goes on once they decide to go onto a GLP-1, move in from a SGLT2 into GLP-1, use this as opposed to using Victoza? Do you want to position this as a product for existing GLP-1 users, but more from a convenience perspective? Thank you.
Good. Thank you, Keyur. Mads, if you start out with the label and what that enables us to do.
Yeah. Keyur, basically, the PIONEER program does represent a cradle to grave approach, where we've started with the treatment-naive patients in PIONEER 1, and ended up in PIONEER 5 and 8 with patients with complications such as renal impairment or being on insulin therapy. In principle, it lends itself to usage among basically any kind of garden variety type 2 diabetes patient. With that being said, one of the biggest problems in U.S. healthcare is that patients are really, as you know from the newest NHANES data, not achieving better glycemic outcomes than they were 10 years ago. We believe that one of the reasons is that patients too often start as a second-line therapy post metformin failure with drugs that simply do not enable them to maintain effective glucose control for more than a year or so.
We think that the optimal positioning in a primary manner is actually at Metformin failure, allowing patients to have, in my view, probably years of excellent treatment thereafter. It does not negate the notion that people will be able to use the product basically in any part of the treatment cascade post Metformin.
Yeah. Adding on to that, do remember that 70% of diabetes scripts in the U.S. marketplace today is for orals. Our commercial positioning is focused on positioning RYBELSUS as the preferred oral antidiabetic medication. Hence, the impact on Ozempic will of course be there to some extent, but I think the market segments enables plenty of space for RYBELSUS. Good. Next question, please.
Thank you. The next question is from Sachin Jain from Bank of America. Please go ahead.
Hi. Just a question versus positioning versus SGLT2s, given the recent heart failure data. What % of diabetics do you estimate have heart failure? What's your QALYs versus SGLT2s in that subset? Just noting the ICER analysis deemed positioning versus SGLT2 as uncertain. Thank you.
Good. Mads-
Yeah
Will you take that one?
Yeah. Yes. If you look at atherosclerotic cardiovascular disease and heart failure respectively, atherosclerosis is prominent among a quarter to a third or even more of people with type 2 diabetes. Looking into heart failure, the estimates are increasing. They used to be down around 10%. There are now estimates that up to 20% or slightly above 20% have heart failure. It's equally split between heart failure with reduced ejection fraction, where the SGLT2 inhibitors have shown good activity according to the DAPA-HF and so on. HFpEF, the heart failure with preserved ejection fraction, where none of the products, including our own, have shown a benefit so far. We might actually anticipate that semaglutide could have a benefit on heart failure with preserved ejection fraction. That's something that we will be potentially looking into.
I think in terms of the prevalence of these diseases, first of all, there's complementarity between SGLT2 inhibitors and GLP-1 receptor agonists in that some patients actually have both atherosclerosis and heart failure. Second of all, there's no reason to believe that there would not, due to the mechanisms of action, be also complementarity vis-à-vis their activity in terms of heart patients. Overall, we actually see it as a benefit that there are products that have these activities. In terms of the quality-adjusted life years, the QALYs, we cannot reveal in detail QALYs for each subsegment because the way you get a QALY, that is a composite of long-term A1c comorbidity-related outcomes, such as microvascular disease, in particular driven by the kidney failure element. The heart aspects, the atherosclerosis-preventing effects of semaglutide also kick economically into the QALY model.
As you know, in the U.S., the QALY acceptance levels are typically relatively high for these chronic diseases.
Thank you.
Okay. Thank you, Sachin. Next question, please.
Next question is from Peter Verdult from Citi. Please go ahead.
Morning, Peter Verdult, Citi. Mads or Carsten, at a time where U.S. pricing is coming under spotlight, if you're successful with effectively putting pressure on payers' budgets. Look, just is there anything you can talk to in terms of characterizing the discussions that you've had with payers leading up to the approval of Ozempic? I'd be interested in anything you're willing to say there. Then just a quick clarification on the ongoing clinical trials, SOUL, FOCUS, and FLOW. Are any of those trials recruiting quicker or faster than expected? Thank you.
Good. If I start off with the U.S. budgetary constraints and payer feedback, it has been medical interactions, as I said before, with the payers in the U.S., and there's been very positive feedback from the payers in terms of the clinical profile of Rybelsus. That has been very positive dialogues. In terms of the budgetary constraints, it's important to get back to the totality of the diabetes care market in the U.S. Even though that GLP-1s are a growing segment, as you see in the market data, in totality, if you take all segments, include insulins, DPP-4s, SGLT2s, and take all the major players, in net company reported sales are actually slightly down in the first 6 months of this year.
That doesn't necessarily define government interaction and policy decisions in Washington, but the hard facts are that the costs are going down in the first half of this year in diabetes care. Then to add to the patient recruitment. Patient recruitment, first of all, we should remind ourselves that when it comes to all of the outcome trials, of which there are four ongoing right now, then the only one that is with the RYBELSUS, that is the SOUL trial, whereas SELECT, FOCUS, and FLOW, et cetera, are ongoing with the injectable version of the semaglutide. Recruitment is actually on track or in some cases slightly ahead of schedule.
Even though, for instance, the FLOW trial is a trial that demands that you have certain degrees of renal impairment at entry, there are so many patients to select from, and our global trial allocation units knows exactly which investigator sites have which incidence rates of renal impairment, et cetera. We have gone to the right countries, the right investigator sites, and I think we are equipped to recruit, in total, around 40,000 patients in these trials.
Thank you.
Thanks, Mads and Peter. Next question, please.
Your next question is from Richard Vosser from J.P. Morgan. Please go ahead.
Hi. Thanks for taking my question. Just thinking about the 52-week data that you referenced up front and also was presented, how can you bring that forward to patients and doctors, given that it wasn't on the label? Maybe just a quick one on the discussions on the CV label for Ozempic and oral semaglutide. Could you just give us an update how those are going? Thanks.
The label, as you've seen, covers the 26-week data as defined by the FDA and primary endpoints. That does neglect the fact that we have performed a 52-week trial. We have the data, and we have data published in highly recognized peer-reviewed journals. As you've seen with some of our previous products, for instance, with Ozempic, where we are promoting SUSTAIN 7, which is not formally on the FDA label, then within the rules in the U.S. and kind of the legal framework, we are able to use data that has been published in peer-reviewed journals. Exactly how and what we're going to use, you'll see at a later point.
When it comes to the cardiovascular indication that you asked about, the review is ongoing. We are in a constructive dialogue with the agency, and the action date, as you can imagine, based on 10-month review period, should be late January next year.
Thanks.
Good. Next question, please.
Yeah, from the line of Simon Baker from Redburn. Please go ahead.
Thanks so much. Quick question on doses. Could you just confirm that the price is flat across the three, seven and 14 milligram doses? Secondly, what are your expectations of the steady-state split between seven and 14 milligrams once the product has been launched and established? Thanks so much.
The first one is quick. Yes, that's confirmed. It's flat pricing. Over to you, Mads, in terms of steady state.
To address just that issue, even though I have no evidence about how it will be in a real-world situation, we did do a pragmatic study called PIONEER 7. In PIONEER 7, it was actually not a very intensively monitored trial because we deliberately set out to have a more real-world like situation where there were less frequent visits with the physician, and there was dosing flexibility in such a way where either if inadequate control was witnessed and/or if side effects like GI tolerability issues prevailed, then the patient in her or his dialogue with the physician at the next consultancy, would be able to go up or down in dose.
In that trial, the split ended up 10% on 3 milligrams, which I remind all of us is not a therapeutic dose as defined in the label, 30% on the 7 milligram and the remaining 60% on the 14 milligram, giving a blended average of 9 point something milligram.
Great. Thanks so much.
Thank you, Mads. Next question, please.
Yep, from the line of Richard Parkes from Deutsche Bank. Please go ahead.
Hi. Thanks for taking my questions. Richard Parkes from Deutsche Bank. You've obviously outlined that you've had positive discussions with payers in advance of the launch. Can you discuss payer's position specifically on the oral administration? I think we've seen in the past that sometimes payers aren't necessarily willing to pay just for convenience benefit. I'm just wondering, is that something that they're willing to pay for in itself versus other GLP-1s? Given that an oral is likely to have increased budget impact for them, is that something they're going to be looking for an increased rebate for? Thanks very much.
Thanks for that question, Richard. At this point, we've had clinical discussions with the payers between the medical staff on both sides. Hence your question regarding what to pay for also etc. has not been part of that. I think we'll see you at the Capital Markets Day in November, and then we can have more discussions about the status on reimbursement at that point in time.
Thank you.
Let's take one last final question.
Yep. It comes from the line of Martin Parkhøi from the Danske Bank. Please go ahead.
Yes, Martin Parkhøi, Danske Bank. Just a question on the strike model, because when you did the strike model on Ozempic which also then it also meant a significant less marketing effort on Victoza. Can you just explain it because it's a little bit different this time. How much extra marketing will you actually add? I don't guess that you will completely remove marketing on Ozempic when you have the access that you hope to get on RYBELSUS.
In terms of RYBELSUS and the positioning in the portfolio and the strike model. Just remind you on the strike model. We have a couple of 100 districts in the U.S. and the strike model defines that when we've reached a certain threshold for market access in the specific districts, we switch on our promotional efforts in terms of sales reps. We switch that on in order not to be able to fill a script. That's the model. As I said before, the core plan for RYBELSUS will be very similar to the one for Ozempic. We are out there with the physicians already to a very large extent. Of course, we also have a mirror of insulin reps where we can put into play in terms of RYBELSUS.
In the mix between Ozempic and insulins, we believe there's a space for RYBELSUS also. At this point, we don't foresee significant changes to our U.S. sales rep footprint. With that, thanks for your interest in Novo Nordisk and the interest in RYBELSUS. We're very bullish on making this a success and turning this into a strong commercial execution, and we look forward to see you all in November at our Capital Markets Day. With that, have a fantastic Monday and see you soon. Thanks.
Thank you very much, sir. Ladies and gentlemen, that does conclude the call for today. Thank you all for your participation. You may now disconnect your lines.