(Adds detail, shares, CEO comment)
By Toni Clarke and Jacob Gronholt-Pedersen
WASHINGTON/COPENHAGEN, Oct 19 (Reuters) - Denmark's Novo Nordisk will take aim at Eli Lilly in the growing diabetes market after an advisory panel to the U.S. Food and Drug Administration (FDA) gave the green light to its semaglutide drug.
Shares in Novo Nordisk rose almost 3 percent in early trading on Thursday, after the panel late on Wednesday concluded semaglutide is effective, reasonably safe and should be approved by the FDA.
The panel voted 16-0 with one abstention in favor of the drug being approved. It would compete with others in a class known as glucagon-like peptide-1 (GLP-1) analogs, which imitate an intestinal hormone that stimulates the production of insulin.
The FDA, due to decide on the drug by Dec. 5, typically follows the recommendations of its advisors.
"This should pave the way for a timely approval," Chief Scientific Officer Mads Krogsgaard Thomsen said in an interview.
Novo Nordisk expects semaglutide, administered through a once-weekly injection, will take market share from Eli Lilly's once-weekly Trulicity, which in turn has been taking share from Novo Nordisk's once-daily Victoza.
"When you have the best (drug), if you cannot win market share, you should do be doing something other than supplying medicine to people," said Thomsen.
Novo will also target some 95 percent of the around 30 million diabetics in the United States who currently don't use GLP-1 drugs, he said.
Novo plans to price semaglutide, which has yet to get a brand name, in a similar range as existing GLP-1 drugs, possibly with a small premium, Thomsen said, adding Novo Nordisk is also developing an oral form of semaglutide that it aims to launch in 2020.
Analysts on average expect annual semaglutide sales to reach $3.17 billion by 2023, with sales of Trulicity, which was approved in the United States in late-2014, rising to $3.71 in 2023, according to Thomson Reuters data.
"We believe semaglutide will be a formidable competitor for Lilly's Trulicity," Alex Arfaei, an analyst at BMO Capital Markets, said in a research note.
Panelists discussed data showing semaglutide was associated with an initial worsening of diabetic retinopathy, a condition caused by damage to blood vessels in the retina due to high blood sugar levels. The damage can cause progressive deterioration in vision, potentially leading to blindness.
But they found that the benefit of reducing blood sugar overall offset this risk, which the company argues is transient. Thomsen said most panel members supported Novo's ambition that the drug's label will to carry a standard warning, similar to insulins, regarding diabetic retinopathy. The FDA will decide on the final label.
The drug has also been shown to reduce cardiovascular risks, although it was unclear whether the FDA will include that in the label.
Most panel members pointed to the need of a larger post-approval study of the drug, a study that will be initiated next year, Thomsen said, without giving further details on the scope of the study. (Reporting by Toni Clarke; Additional reporting by Stine Jacobson in Denmark; Editing by Richard Chang and David Holmes)