Novo obesity drug could launch in U.S. end 2014

COPENHAGEN Fri May 24, 2013 6:50am EDT

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COPENHAGEN (Reuters) - Danish drug maker Novo Nordisk said it could launch obesity treatment liraglutide in the United States by the end of next year and rejected some analysts' doubts over the medicine's commercial potential.

The world's biggest insulin producer is hoping the treatment for severe obesity will help to at least partly offset the delay to its next generation insulin treatment Tresiba after U.S. regulators asked for more tests.

Novo said on Thursday a final stage clinical trial showed patients treated with 3 mg of liraglutide - which is already on sale as a treatment for type-2 diabetes under the brand name Victoza - had an average 8 percent weight loss.

But some analysts on Friday questioned whether the results were strong enough to secure the drug's success.

"The modest efficacy supports our hypothesis that the drug is unlikely to be a significant commercial success," Deutsche Bank analysts said, adding they were also concerned by the high price of the injectable drug.

Liraglutide is expected to cost around $25 per day as a treatment for obesity and could be a lifelong treatment. That compares with about $5 per day for rival Belviq, made by Arena Pharmaceuticals, and Qsymia from Vivus.

Novo Chief Scientific Officer Mads Thomsen told Reuters the higher price was justified because liraglutide was a better product than competitors.

He said the treatment was likely to be launched in the United States - the world's biggest drugs market - at the end of next year or the start of 2015.

Analysts who believe the drug will be a success estimate it could achieve peak annual sales of around $4 billion.

Sydbank's Soren Hansen said the key issue was whether liraglutide would qualify for reimbursement, which is when authorities help patients to pay for the cost of a drug.

"The study shows some good effects ... but whether that is enough to justify reimbursements, I am not sure," he said.

At 1000 GMT, Novo Nordisk shares were up 0.8 percent at 976.5 Danish crowns, compared with a 0.1 percent rise in the STOXX Europe 600 healthcare index.

(Reporting by Mette Fraende and Shida Chayesteh; Editing by William Hardy and Mark Potter)

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