Novo Nordisk Considers Move Towards Gene Therapy

(Bloomberg) -- Novo Nordisk A/S, the maker of diabetes drugs grappling with U.S. pricing pressure, said it’s considering entering the fast-growing gene therapy field through potential partnerships.

Novo will look at cutting-edge treatments that aim to fix genetic flaws, focusing on technology that could be deployed against multiple severe diseases, Chief Executive Officer Lars Fruergaard Jorgensen said in an interview Friday after the company released first-quarter earnings results.

“Gene therapy is an area that we could enter,” he said. “In the pharma industry, the more we can bring real breakthrough innovation, the better we’re seen as contributing to society, so I’m very positive toward curative treatments.”

Gene therapy and gene-editing technologies would represent a new frontier for Novo, the world’s biggest maker of insulin. The Danish drugmaker is already moving beyond its main business of diabetes, accelerating efforts to develop stem-cell therapies for Parkinson’s disease and expanding in areas including obesity and liver ailments.

Novo rose 0.6 percent in Copenhagen and has gained 9.5 percent in the past year.

The gene-therapy field is heating up with Biogen Inc. agreeing earlier this year to buy Nightstar Therapeutics Plc and Pfizer Inc. collaborating with Vivet Therapeutics. That followed Roche Holding AG’s $4.8 billion deal for Spark Therapeutics Inc. and Novartis AG’s purchase of AveXis Inc.

Novo is continuing to hunt for potential acquisitions and licensing deals to bolster its biopharma division, which includes hemophilia treatments, focusing on transactions of roughly a few billion dollars, he said. Gene therapy for hemophilia is a “relatively crowded” realm, he said.

A partnership Novo announced last month with Gilead Sciences Inc. to test drugs for a liver ailment, known as NASH, shows the company has sped up its pursuit of deals, Jorgensen said. The company may look more broadly at expansion opportunities in orphan diseases, he said.

Pricing Pressure

Novo needs new sources of growth as U.S pricing pressure has dragged on earnings. Sales of Ozempic, a weekly injection for patients with the most common form of the disease, edged past expectations in the first quarter, helping the company beat analysts’ profit estimates.

The results relieve some investor concerns after Novo flagged lower average prices this year because of weakness in the insulin market and U.S. legislation making pharma companies pay more of seniors’ prescription costs. Novo is developing an oral version of Ozempic that it expects to gain approval later this year and simplify patient use.

Novo also said Friday that in March it received a request from the Texas Attorney General’s Medicaid fraud control unit for information on the company’s practices to market and promote Ozempic, and that it’s cooperating in the investigation.

An oral version of Ozempic, like the initial product, will need to negotiate access after a potential approval later this year, so the “real mega-launch” probably won’t happen until 2020, Jorgensen said.

The company’s marketing efforts for injected Ozempic have included television advertisements touting the drug’s impact on patients’ blood sugar, weight and heart safety, with the 1970s Pilot song “Magic” playing in the background.

Net income in the first quarter was 10.4 billion kroner ($1.56 billion), beating the average estimate of 9.68 billion kroner. Revenue of 29.3 billion kroner also exceeded expectations, and Novo maintained its outlook for the year.

To contact the reporter on this story: James Paton in London at jpaton4@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Lauerman, Thomas Mulier

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