Novo Nordisk stops small molecule drug development

In the future, all of the Danish company's research and development (R&D) resources will be focused on large-molecule biopharmaceutical medicines while small molecule drug development programmes for the oral treatment of diabetes will be discontinued.

The global market for biopharmaceuticals was estimated to be $50bn (38.7bn) in 2005 and with growth rates almost double that of the pharmaceutical market in general, it is easy to see why Novo Nordisk sees its future in protein therapies.

Since the formation of its parent companies in the 1920s, Novo Nordisk has always been more interested in large molecule drug development, especially in diabetes care where it makes the majority of its sales.

The company also develops drugs to treat bleeding disorders and for hormone replacement therapy.

"Our core competencies lie within therapeutic proteins, and it is within this area that we can make the greatest difference in terms of patient outcomes and company growth," said Mads Krogsgaard Thomsen, chief science officer of Novo Nordisk.

"Therefore, it is a logical move to focus all our research and development efforts on this area."

Oral antidiabetic products that are already marketed, including Prandin (repaglinide) (or Novonorm outside the US), will be retained, though they only count for 5 per cent of Novo's total sales.

The company also sell several HRT products such as Activelle (estradiol/norethindrone) and Vagifem (oestradiol).

Existing preclinical and clinical small-molecule projects such as NN9101 - a glucokinase activator in Phase I tests - are expected to be out-licensed although a company spokesperson refused to comment on who Novo might be in negotiations with.

They did confirm to DrugResearcher.com that the company will "continue to do the necessary life cycle management" on these products.

The decision will directly impact approximately 180 employees, around half of whom should be offered new positions within the company.

The spokesperson confirmed that the people most likely to be kept on were lab technicians and those involved in administration.

"It will be much harder to keep researchers who are very specialised in small molecule development."

Novo Nordisk is keen to point out that the move is "in no way a cost cutting exercise and nothing to do with short-term competitive pressures.

It is a long-term strategic decision."

"R&D budgets were significantly higher than the year before in 2006 and will be significantly higher again in 2007."

"The move makes sense to us and will help focus R&D efforts in areas which are closer to Novo's competencies," said an analyst from Dresdner Kleinwort in a research note.

"However, since this essentially means dropping a product from the clinical pipeline, short-term reaction is likely to be negative."