Earlier this month, Novo Nordisk announced it was laying off 400 staffers in Denmark and China. Today, Reuters reports that the Danish company plans to lay off about 250 people in the United States. It also indicated it planned to hire an unidentified number of people for new positions.
About half of Novo Nordisk’s annual revenue comes from the U.S. market. However, as a diabetes specialist, Novo Nordisk is battling significant pricing pressure in the U.S. A company spokesman told Reuters that in 2019, the company will pay higher rebates to Medicare, which is a factor in the layoffs.
About 100 of the U.S. cuts will be back-office jobs at the company’s U.S. headquarters in Princeton, New Jersey. The other 150 will be diabetes treatment support positions.
When Novo Nordisk reported it was cutting 400 jobs in Denmark and China, it also indicated it planned to invest about 115 million pounds over a 10-year period in a new research-and-development facility in Oxford, UK, that will create up to 100 research jobs.
“This is not a cost-cutting exercise,” said Mads Krogsgaard Thomsen, Novo Nordisk’s chief science officer, reported Street Insider on September 18. “Our analysis shows that we have a surplus of manual labor and are lacking competencies in the digital sphere, informatics, data science, artificial intelligence and automations.”
As part of that change, the company will create four “biotech-like units” in Denmark, the U.S. and the UK in order to focus on innovative areas like stem cell research. It will also increase investments in automation and digital capabilities, such as machine learning and artificial intelligence (AI).
Earlier this summer, Danish publication Borsen reported that the company was considering a cost-cutting plan that would eliminate up to 3,000 jobs. In 2016, the company cut 1,000 jobs.
Yesterday, competitor Eli Lilly signed a licensing deal with Tokyo’s Chugai Pharmaceutical Co. for OWL833, Chugai’s oral non-peptidic GLP-1 receptor agonist. This is a Phase I-ready drug being evaluated for type 2 diabetes. Chugai is a subsidiary of Roche.
The GLP-1 receptor agonists are a relatively new class of diabetes drugs. GLP-1 analogs stimulate the pancreas to produce insulin, and also reduce appetite. Novo Nordisk’s Victoza and Eli Lilly’s Trulicity dominate the market for GLP-1 receptor agonists.
But the competition in the market also is focused on developing GLP-1 agonists that can be taken orally instead of via injection. They are also trying to decrease possible side effects.
Lilly’s Trulicity and Novo Nordisk’s Victoza are both injected drugs. Lilly’s acquisition of OWL833 is partly to develop an oral formulation of a GLP-1 agonist. Novo Nordisk has been focused on developing a once-daily oral version of Ozempic (semaglutide), which is currently marketed in a subcutaneous injectable formulation. Several times throughout the year it has reported positive results from about ten PIONEER clinical trials of the drug. It expects to submit the drug to regulators in 2019.
In the clinic, Ozempic has had better results than Trulicity. In a comparison trial over 40 weeks in type 2 diabetes patients, people on Ozempic lost more weight and had bigger decreases in HbA1c than those on Trulicity.
Another GLP-1 analog on the market is Sanofi’s Exenetide, which only underlines how competitive the diabetes market is.
In February, BioPharmaDive wrote, “Novo Nordisk and Eli Lilly & Co.’s glucagon-like peptide-1 (GLP-1) are vying for space in the diabetes field. Lilly’s Trulicity (dulaglutide) has been on the U.S. market since September 2014, and its sales have grown from $248.7 million in 2015 to $2 billion in 2017. In November 2017, Novo’s Victoza (iliraglutide) had a 50 percent share of the GLP-1 market, with 2017 sales of DKK23.173 million ($3.83 billion).”
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