When Pfizer asked us to assist in the shipping, warehousing, and tracking of a new ultra-rapid acting insulin, we knew this was more than just putting boxes on a shelf. The drug, which was currently in Phase II trials, would require tight integration between internal quality control and tracking systems, our facilities, and the eventual hospitals and pharmacies that would be the major buyers for this drug.

Services Provided

— IT and ERP Integration

— Warehousing

— Transport

— Logistics Consulting

Although Diabetic Investor has not spoken with anyone at Pfizer we suspect that like Diabetic Investor, Pfizer knows that it’s just a matter of time before generic insulin becomes a reality.  How soon this happens could well be determined by the current court battle between Sanofi (NYSE:SNY) and Lilly over Lilly’s generic version of Lantus. Lurking in the background is the impending patent expirations of the two most popular short-acting insulin’s Humalog from Lilly and Novolog from Novo Nordisk (NYSE:NVO). The question really isn’t whether generic insulin gets here but when it gets here. Given the nature of how payors are looking at diabetes it’s essential that Pfizer/Astra have insulin in their portfolio.

Looking ahead and this assumes Pfizer will successfully acquire Astra; the diabetes drug market could undergo yet another major transformation. With the addition of insulin there would two companies with comprehensive diabetes portfolios- Lilly and Pfizer/Astra. That leaves companies like Novo, Sanofi, Merck and Johnson and Johnson (NYSE:JNJ) on the outside looking in. Of the three Novo is in the best position to compete but competition would be limited to injectable therapy options- insulin and GLP-1’s. Unless Sanofi finds a replacement for Lantus it’s difficult see the company competing effectively. Merck won’t be hurt that badly as the Januvia franchise continues to perform well.

Looking at JNJ the company could well explore the possibility of hooking up once again with Novo. Years ago the two companies hooked up in the diabetes device sector and many speculated that JNJ might make a run for Novo. Today with the device sector under extreme pricing pressure this hook up would be driven by Novo’s need to add oral therapies to their portfolio and JNJ’s desire to maximize the success of Invokana. In a strange twist the fact that JNJ is the market leader in BGM and still owns insulin pump maker Animas could actually propel this hook up.

For years Diabetic Investor has predicted that in the future patients with diabetes would be prescribed a diabetes management system that included everything they needed to manage their diabetes, both drugs and devices. A Novo/JNJ collaboration would be a huge step in this direction now that JNJ has Invokana.

Another possibility would be for Novo to acquire JNJ’s diabetes portfolio. Given that JNJ has dramatically restructured their diabetes franchises such a deal becomes a distinct possibility.  As Diabetic Investor reported when the JNJ restructuring became public LifeScan, their BGM unit has basically ceased to exist, Animas their insulin pump franchise would be sold and Invokana which is part of Janssen would be JNJ’s growth engine in diabetes. As we noted previously JNJ isn’t just good at knowing when to enter markets but also very smart about when it’s time to exit markets. With Invokana doing well now just might be the time to sell and get out of diabetes completely.

When Pfizer asked us to assist in the shipping, warehousing, and tracking of a new ultra-rapid acting insulin, we knew this was more than just putting boxes on a shelf. The drug, which was currently in Phase II trials, would require tight integration between internal quality control and tracking systems, our facilities, and the eventual hospitals and pharmacies that would be the major buyers for this drug.

Given all the deal making that’s been going on in the pharmaceutical sector and the changing nature of the diabetes market Diabetic Investor suspects that no matter how the Pfizer/Astra situation plays out we haven’t seen the last deal.  The fact is even with the changing nature of reimbursement the diabetes market is too large to ignore for any major drug company. Everyone basically sees the same thing as diabetes continues to grow at epidemic rates globally and there still are plenty of opportunities for new therapies and devices. We don’t know who will acquire whom but one thing everyone can basically count on in this wacky world of diabetes anything can and usually does happen, no matter how crazy it may seem when it actually happens.

Although Diabetic Investor has not spoken with anyone at Pfizer we suspect that like Diabetic Investor, Pfizer knows that it’s just a matter of time before generic insulin becomes a reality.  How soon this happens could well be determined by the current court battle between Sanofi (NYSE:SNY) and Lilly over Lilly’s generic version of Lantus. Lurking in the background is the impending patent expirations of the two most popular short-acting insulin’s Humalog from Lilly and Novolog from Novo Nordisk (NYSE:NVO). The question really isn’t whether generic insulin gets here but when it gets here. Given the nature of how payors are looking at diabetes it’s essential that Pfizer/Astra have insulin in their portfolio.

Looking ahead and this assumes Pfizer will successfully acquire Astra; the diabetes drug market could undergo yet another major transformation. With the addition of insulin there would two companies with comprehensive diabetes portfolios- Lilly and Pfizer/Astra. That leaves companies like Novo, Sanofi, Merck and Johnson and Johnson (NYSE:JNJ) on the outside looking in. Of the three Novo is in the best position to compete but competition would be limited to injectable therapy options- insulin and GLP-1’s. Unless Sanofi finds a replacement for Lantus it’s difficult see the company competing effectively. Merck won’t be hurt that badly as the Januvia franchise continues to perform well.