Novo makes another early-stage diabetes bet with Ziylo buy

Intensifying pricing pressure in diabetes has not put Novo Nordisk off going after new technologies. The group’s latest acquisition, the UK company Ziylo, could lead to the development of insulin that "switches off" when blood glucose levels are too low.

This would get around a big problem with current insulins: namely, the risk of hypoglycaemia. Still, it could be at least 10 years until it hits the market – the project is currently at the research stage and should go into phase I in around three years, Ziylo’s chief executive, Harry Destecroix, tells Vantage.

"It would effectively be hypo-free insulin – one of the key reasons that diabetics have high sugar levels is because they’re scared of hypos."

He adds that this could broaden the market for insulin into type 2 diabetics who are currently borderline candidates for this therapy. "One of the reasons they don’t go onto insulin is because there’s a risk that they could overdo it. This would make insulin safer."

Novo needs all the help it can get right now. Its second-quarter earnings featured a slower than expected launch for the group’s current big hope, the once-weekly injectable GLP-1 agonist Ozempic – and a warning about another drop in US prices next year (Novo needs weightier launches to fill Victoza’s shoes, August 8, 2018).

Investing in cutting-edge technologies seems like the right way to go if the Danish group wants to keep charging a premium. As well as glucose-sensitive insulin Novo is also working on stem cell-based therapies, another area that has seen a lot of interest but not much progress so far.

The two projects have distinct target audiences: the stem cell technology is intended eventually to become a cure for type 1 diabetes, while the technology covered by the Ziylo deal would mainly be aimed at type 2 patients, though it might also be useful in others such as those with type 1 disease, Marcus Schindler, Novo’s senior vice-president of global drug discovery, tells Vantage.

No more monitoring?

Mr Schindler adds that by providing better glucose control, glucose-sensitive insulin could also reduce or even eliminate the need for glucose monitoring.

Mr Destecroix is not so sure about this. "It’d be wonderful if it worked that well, but I think there’s always going to be a market place for accurate, long-lasting glucose sensors." This attitude is probably to be expected given that his company is developing such a sensor.

As part of the latest deal Ziylo’s employees, including its chief exec, are moving to a new vehicle, Carbometrics – which, as well as working with Novo on the glucose-sensitive insulin project, has exclusive rights to develop molecules discovered by Ziylo for diagnostic uses.

Both applications harness the glucose-binding properties of the synthetic small molecules, which Mr Destecroix describes as "artificial receptors for glucose", but in a slightly different way. For diagnostic purposes, they would bind to and measure the amount of glucose present, but as part of the glucose-sensitive insulin they would work more like a switch.

"When you’ve added this switch onto insulin, you can modulate its activity – if glucose levels drop, the insulin would deactivate," Mr Destecroix explains. The companies have not yet disclosed the exact molecular mechanism of action.

Novo has chosen this rather complicated deal structure because glucose monitoring is not its core business, Mr Schindler says. This leaves Carbometrics open to collaborate with a glucose monitoring specialist – the likes of Abbott and Dexcom spring to mind.

But for now Carbometrics’ first priority will be developing the glucose switches and supplying these to Novo. The Danish company, meanwhile, will provide the insulin and work on linking the two molecules together.

"We now own the IP and know-how," says Novo’s Mr Schindler. "But we’ll continue to collaborate with the new company, because it contains the scientists we’d like to work with for the foreseeable future to turn [glucose-sensitive insulin] into a reality."

More selective

Creating this kind of therapy has not been possible in the past because it has been difficult to find a molecule selective enough for glucose, particularly in blood, where thousands of other substances are also present.

According to Mr Destecroix the glucose-binding molecule developed by Ziylo, which originated from work done by Professor Anthony Davis at the University of Bristol, "binds glucose phenomenally well, but it only bind to glucose, with unprecedented selectivity".

Still, Novo is not the only company working on this problem, and Mr Schindler notes that the glucose-sensitive insulin space has become "quite competitive"; notably, the non-profit organisation the JDRF recently teamed up with the private biotech company Gubra to develop a glucose-responsive insulin for type 1 diabetes.

"That’s one of the reasons we decided on an acquisition of this technology, to hopefully put us in a leading position," he adds. The companies are not giving financial details of the deal, except to say it could be worth over $800m in total.

Mr Schindler describes the Ziylo technology as "the best we could find", but suggests that work will continue on other glucose-sensitive insulin candidates. "There are lots of ways to design such a molecule. I think it would be somewhat naive to close our eyes to the rest of the scientific community."

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