Bell Potter Securities Report on Mesoblast 1 31-2012


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Mesoblast (MSB) - Headed to the sweet spot in diabetes care. Buy, Speculative. Current price $6.45. Target price $16.00 (Bell Potter Securities)

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Bell Potter Securities Report on Mesoblast 1 31-2012

  1. 1. 31 January 2012AnalystStuart Roberts 612 8224 2871Associate Analyst Mesoblast (MSB)Tanushree Jain 612 8224 2849Authorisation Headed to the sweet spot in diabetes careSteve Goldberg 612 8224 2809 Recommendation Diabetes represents strong new upside for Mesoblast Buy (unchanged) Mesoblast has initiated clinical work in Type II diabetes with the clearance of its IND by Price the FDA. This follows on from highly favourable data in non-human primates which was reported in November 2011 and January 2012. With diabetes so widespread and $6.45 growing, there is huge potential value for MPCs in this space. The current standard of Target (12 months) care for diabetes of insulin therapy and/or oral diabetes medication have together $16.00 (unchanged) created a global market worth ~US$34bn pa, serving 8% of the world’s adult Risk population. By contrast heart failure is probably only a US$6bn global market. We see Speculative success in diabetes as boosting confidence in other intravenous applications of MPCs on which Mesoblast is now working on, such as anti-inflammatory disorders. We have previously assumed no value from Mesoblast’s diabetes programme. We now apply aExpected Return conservative 5% probability of clinical trial success for diabetes under our base caseCapital growth 148% valuation and a 10% probability of success under our optimistic case valuation, whichDividend yield 0 equates to A$1.95 per share base case and A$4.84 optimistic case.Total expected return 148%Company Data & Ratios Investment view – strong news flow matches a strongEnterprise value A$1,580.3 pipeline m In view of the substantial opportunity of MSB’s cardiovascular and Bone MarrowMarket cap A$1,820.8 Transplant franchises and other pipeline opportunities in diabetes, eye diseases & m orthopedic becoming more substantial, we re-iterate our positive outlook on MSB. WeIssued capital 280.3m value Mesoblast at A$10.91 base case and A$21.60 optimistic case. Our target priceFree float 100% of A$16.00 sits at the mid-point of our DCF range. We expect significant news flowAvg. daily vol. (52wk) 0.74m over the next twelve months as assisting in the stock being re-rated to our target price12 month price range $5.05-$10.04 including a) initiation of the Phase II diabetes trial; b) initiation of a pivotal trial in heartGICS sector Healthcare Equipment and Services failure; c) completion of the Phase II spinal fusion trials; d) interim data from the EU Phase II trial in Acute Myocardial Infarction; e) receipt of a Special ProtocolDisclosure: Bell Potter Securities acted as leadmanager in a May 2010 capital raising and a Assessment by the FDA for the BMT Phase III Trial; f) Interim data from Phase IIDecember 2010 selldown of stock and receivedfees for that service. lumbar disc repair trial and g) potential licensing announcement for the diabetes program.Price Performance (1m) (3m) (12m)Price (A$) 7.34 9.65 5.89Absolute PriceAbsolute (%) -14.85 -35.23 6.11 Earnings ForecastRel market (%) -18.10 -36.30 17.55 Year end 30 June 2011a 2012f 2013f 2014f 2015f $12.00 Sales (A$m) 15 27 27 27 337 $10.00 EBITDA (A$m) -12 -23 -44 -62 208 $8.00 NPAT (reported) (A$m) 91 -23 -38 -58 170 NPAT (adjusted) (A$m) -9 -16 -38 -58 170 $6.00 EPS (adjusted) (cps) -3.9 -5.5 -13.1 -20.1 58.8 $4.00 EPS growth (%) N/A N/A N/A N/A -392% $2.00 PER (x) N/A N/A N/A N/A 11.0 EV/EBITDA (x) -133.1 -67.4 -35.7 -25.3 7.6 $0.00 Feb 10 Aug 10 Feb 11 Aug 11 Dividend (¢ps) 0.0 0.0 0.0 0.0 0.0 Yield (%) 0.0% 0.0% 0.0% 0.0% 0.0% MSB S&P 300 Rebased Franking (%) N/A N/A N/A N/A N/A ROE (%) -1.7% -3.1% -7.9% -13.4% 27.5%SOURCE: IRESS SOURCE: BELL POTTER SECURITIES ESTIMATESBELL POTTER SECURITIES LIMITED DISCLAIMER AND DISCLOSURESACN 25 006 390 7721 THIS REPORT MUST BE READ WITH THE DISCLAIMER Page 1AFSL 243480 AND DISCLOSURES ON PAGE 29 THAT FORM PART OF IT.
  2. 2. Mesoblast (MSB) 31 January 2012Mesoblast – Headed for the sweet spot indiabetes care Mesoblast is initiating a Phase II Trial in Type II Diabetes. Mesoblast has announcedMesoblast’s diabetestrial will report that it has received FDA approval to run a Phase II trial in Type II diabetics evaluating theresults later this year effect of a single injection of MSB’s MPC. The trial is essentially a dose finding safety study 1 with the potential for an efficacy readout , randomising 60 patients with ‘poorly controlled Type II diabetes’ (ie HbA1c over 7% and patients on metformin but not yet insulin dependent) to either placebo (15 patients) or any of the three escalating doses (0.3, 1, or 2 million cells - 45 patients). The trial subjects will be evaluated at the 12-week mark. Type II diabetes would be the first indication moving into human clinical trials from MSB’s intravenous (IV) product franchise. We expect data late in 2012. Why MSB’s diabetes application is poised for success. In our view MSB’s MPC technology has a strong potential to upstage the current ‘standard of care’ for Type II diabetes and also be effective in treating associated co-morbidities. Our belief stems from work done in non-human primates that generated strong efficacy signals (see the next section for details) and demonstrated the cardioprotective nature of MPCs. We expect that in later stage clinical work Mesoblast will focus on late-stage patients with renal failure where current treatment options are limited and the principal competition in a healthcare economics sense is costly renal dialysis therapy (typical cost US$70,000 pa). Diabetes represents strong new upside for Mesoblast. The current standard of care for diabetes are insulin therapy and oral diabetes medication, which together have created a global market worth ~US$34bn pa, serving 8% of the world’s adult population. We apply a conservative 5% probability of clinical trial success for diabetes under our base case valuation and a 10% probability of success under our optimistic case valuation. We value diabetes opportunity for MSB at A$1.95 under our base case and A$4.84 under our optimistic case. We also see success in diabetes as boosting confidence in other intravenous applications of MPCs on which Mesoblast is now working on, such as anti- inflammatory disorders. Big and Specialty Pharma companies are facing a huge patent cliff over the next 6 years with key diabetes drugs including Amylin’s Byetta, Merck’s Januvia and Novo Nordisk’s Victoza losing patent exclusivity. Consequently, we expect to see licensing interest from the pharma companies as MSB moves with its diabetes offering into Phase II trials and given the high costs involved in a Phase III diabetes trial, a strong likelihood of MSB establishing a partnership prior to Phase III. We Re-iterate our Buy Recommendation and $16 Price Target (Risk Speculative). In view of the substantial opportunity of MSB’s cardiovascular and Bone Marrow Transplant franchises and other pipeline opportunities in diabetes, eye diseases and orthopaedic becoming more substantial, we re-iterate are positive outlook on MSB. We value Mesoblast at A$10.91 base case and A$21.60 optimistic case. Our target price of A$16.00 sits at the mid-point of our DCF range. We expect significant news flow over the next twelve months assisting in the stock being re-rated to our target price including a) Initiation of the Phase II diabetes trial; b) Initiation of a pivotal trial in heart failure; c) completion of the Phase II spinal fusion trials; d) interim data from the EU Phase II trial in Acute Myocardial Infarction; e) receipt of a Special Protocol Assessment by the FDA for the BMT Phase III Trial; f) Interim data from Phase II lumbar disc repair trial and g) potential licensing announcement for the diabetes program.1 That is, the primary endpoints will be those associated with safety and tolerability, although secondary endpoints like fasting blood glucose and C-reactive peptide will also be measured.Note that the trial will evaluate a single injection of MPCs, which reflects conservatism on Mesoblast’s part. As MSB noted in presenting its heart failure data in mid-November, MSB’s cellsgenerate a weak immune response in some recipients. In the heart failure trial there was a donor specific antibody response in 6 of the treated patients, or 13% of that group, but four losttheir antibodies in less than one month. There was no effect on therapeutic outcomes from the antibodies, and no clinical-signs or symptoms related to such antibodies. We understand that inrepeat dosing work in non-human primates there had been no immune response issues observed in terms of its impact on therapeutic effectiveness. We conclude from all this that immuneresponse is not an issue with MPCs. Page 2
  3. 3. Mesoblast (MSB) 31 January 2012Animal data points to solid clinicalprospects in Type II diabetes Today’s announcement follows on from favourable animal data in Type II diabetes which Mesoblast announced on 10 November, and follow-up data announced on 12 January: • The company’s investigators took 17 non-human primates with dietary-induced Type II diabetes, gave them a single dose of MPCs (0.1, 0.3, 1 or 2 million cells), and then 2 measured the effect on glucose metabolism over a twelve week period . Three of the 17 monkeys were used as controls; • The change from baseline in fasting blood glucose for the treated subjects versus placebo for each dose level was statistically significant at two, four, six and eight weeks (p<0.001), with the control group showing no significant changes in their high levels of fasting blood glucose; • At the highest doses of 1 million and 2 million cells, the change in fasting blood glucose at eight weeks from baseline was statistically significant (p<0.05) at eight weeks and 3 remained so at 12 weeks . • There was a correlation between fasting blood glucose and C-Reactive Protein (CRP), a marker of inflammation that is frequently used as an indicator of cardiovascular health. Also, there was a demonstrated dose response for CRP, with the higher doses seeing a statistically significant drop in CRP as opposed to the lower doses (p<0.05) We see six reasons why this data is important for the prospects of MPCs as a therapy for Type II diabetes: 1) The data was from a good animal model. Old world non-human primates have proved 4 viable animal models for studying Type II diabetes for many years . We understand Mesoblast’s data were generated using a colony of outbred cynomolgus monkeys, that is, ‘long-tailed macaques’ or ‘crab-eating macaques’ native to Southeast Asia (Macaca fascicularis). For this monkey there is a particularly robust body of science on its 5 usefulness as a diabetes model , since the monkey gets the same kind of diabetes as 6 humans when fed a high-sugar, high-fat diet , making it an ideal setting in which to study diabetes therapies. Also, the complete gene sequence of the monkey has 7 recently become available thanks to Roche researchers . 2) The statistical significance of the data was impressive. Obviously a greater number ofThe 2011 non-humanprimate study results control subjects would be desirable in order to show statistical significance in terms ofhad high statistical treatment versus control. However the low p values versus baseline suggest that thesignificance effect on fasting plasma glucose and CRP was real, particularly since the number of test subjects was so small. 3) The favourable effect at twelve weeks was important. Cynomolgus monkeys have a life 8 span of around 30 years in captivity , so, roughly speaking, twelve weeks worth of data in this monkey can be considered the equivalent of around 32 weeks in a human. Given that diabetes drugs are considered effective in people if they can reduce HbA1c below 7% at the 24-26 week point, we think the statistically significant effect at eight weeks on fasting blood glucose is highly relevant to any upcoming human trials.2 The eight-week data were presented in November 2011.3 Reported January 2012.4 See ILAR J. 2006;47(3):259-71 and ILAR J. 2006;47(3):186-98.5 See, for example, J Med Primatol. 1988;17(6):319-32; Lab Anim Sci. 1993 Feb;43(1):73-7; Vet Pathol. 1996 Sep;33(5):479-85; and Toxicol Pathol. 2001 Jan-Feb;29(1):142-8.6 See J Med Primatol. 2011 Oct;40(5):335-417 See Genome Res. 2011 Oct;21(10):1746-56. Epub 2011 Aug 23.8 Source: Wisconsin National Primate Research Center, University of Wisconsin-Madison. Page 3
  4. 4. Mesoblast (MSB) 31 January 2012 4) The drop in fasting blood glucose at the high dose could be a proxy for glycemic control. At eight weeks the 2 million cell dose group had dropped fasting blood glucose 9 by 44 mg/dl , to 110 mg/dl (assuming the controls in Mesoblast’s trial at 154 mg/dl represents an adequate baseline). That this was favourable is suggested by fasting 10 blood glucose of 100-125 being considered only ‘pre-diabetes’ in humans . Now compare the performance of MPCs in the current study to the diabetes drug Byetta, where a 10 mcg twice-daily injection of Byetta as a monotherapy at 24 weeks was only 11 able to bring fasting blood glucose down by 19 mg/dl, from 155 mg/dl to 136 mg/dl . This, drop however, was good enough to reduce HbA1c levels in Byetta’s patients from 7.8% to 6.9%, thereby restoring glycemic control. This suggests the potential for MPCs to be seriously competitive with existing diabetes drugs. 5) MPCs are cardioprotective. As the data released to date on MPCs in heart failure would suggest, MPCs have a favourable cardiovascular profile. Mesoblast has now demonstrated this through the data on C-Reactive Protein (CRP). CRP is often used in evaluating heart disease risk because the white blood cells associated with inflammation invade artery walls and release damaging chemicals, leading to plaque 12 13 formation . In this study CRP came down from levels >3 mg/L , generally considered 14 ‘high risk’ , to the low point of the range considered ‘medium risk’ (1.0–3.0 mg/L) and 15 remained so throughout the entire 12 week study period . We think the CRP data provides good confirmatory evidence not only of the ability of MPCs to turn down an 16 inflammatory response but also of the favourable cardiovascular profile of stem cells as a potential diabetes therapy. This is important given how cardiovascular issues knocked down GSK’s former blockbuster diabetes drug Avandia over the 2007-2010 period. 6) The non-human primate data builds on mouse data which Mesoblast generated twoMPCs may be able torebuild damaged years ago. In December 2009 Mesoblast reported the results of a study of MPCs in a 17pancreatic tissue mouse model of diabetes . A 35-subject experiment saw single-dose injections of MPCs boost pancreatic islet cells two-fold in the treated mice compared to the controls 18 (p=0.0012), with the ratio of beta-to-alpha islet cells 29% higher (p=0.005) , blood glucose levels down 35% (p=0.012) and blood insulin levels up 34% (p=0.04). This indicated that MPCs could potentially regenerate pancreatic islet beta cells in Type II diabetics. Mesoblast hasn’t reported data on pancreatic histology with regard to the non-human primate study because the monkeys hadn’t been sacrificed at the time the data was generated, however there is the potential, given the other data that is available, for regeneration to have happened. A diabetes application for MPCs would potentially dwarf all the others. As we note below, there is currently a US$34bn global market for insulin and diabetes drugs, growing strongly thanks to high and rising diabetes prevalence. MPCs, if successful in humans as a diabetes therapy, would have certain key advantages that would make it a contender for leadership of this market.9 Milligrams per decilitre. A decilitre is one-tenth of a litre.10 Source: American Diabetes Association. Healthy blood glucose is under 100.11 This was for 10 mcg twice-daily Byetta as a monotherapy at 24 weeks (source: Eli Lilly, Byetta prescribing information, Table 5).12 Data from the Physicians Health Study of 18,000 apparently healthy doctors found that elevated levels of CRP were associated with a threefold increase in the risk of heart attack (seeCirculation. 2002 Jun 4;105(22):2595-9). Meanwhile in the ~28,000 apparently healthy women in the Harvard Womens Health Study, CRP was more accurate than cholesterol levels inpredicting heart problems (see N Engl J Med. 2002 Nov 14;347(20):1557-65). In recent years CRP has come to be regarded as diagnostic of Metabolic Syndrome (see Circulation.2003;107:391-397).13 Milligrams per litre.14 See Circulation. 2003 Jan 28;107(3):499-511.15 At 0.3, 1 or 2 million MPC/kg.16 We noted in our 27 September 2011 comprehensive update note on Mesoblast (see page 47 of that note) that Mesenchymal Stem Cells had demonstrated ability in terms ofimmunomodulation, and we assume that MPCs are similarly well placed.17 Presumably mice in which the pancreas had been partially destroyed by the chemotherapy drug streptozotocin. See Lab Anim (NY). 2009 Feb;38(2):55-60.18 Islet cells are so-called because when looking at the cells through a microscope, they look like islands floating in the pancreas. Beta cells are the islet cells that actually produce the insulinwhich lowers blood glucose. Alpha cells produce glucagon, which increases blood glucose. A higher ratio of beta cells to alpha cells means less blood glucose. Page 4
  5. 5. Mesoblast (MSB) 31 January 20128% of the world’s adult population hasdiabetes The International Diabetes Federation has recently released a new estimate of 366 million 19 adults living with diabetes globally , which would represent around 8% of the adult population aged 20-79. Figure 1 – High income countries with significant diabetes Figure 2 – Diabetes patient populations grew strongly between populations 2007 and 2010 but the worst is yet to come Current 600 Diabetics Diabetics adult Growth rate Country now (million) 2030 (million) prevalence 2011-2030 (pa) 500 United States 23.7 29.6 10.9% 1.1% Japan 10.7 10.2 11.2% -0.3% 400 Million patients Germany 5.0 5.6 8.0% 0.5% Low income Italy 3.6 4.2 7.8% 0.9% 300 Middle income France 3.2 3.9 7.3% 0.9% High income Korea, South 3.2 4.3 8.8% 1.5% 200 United Kingdom 3.1 3.6 6.8% 0.9% 100 Spain 2.8 3.9 8.1% 1.6% Saudi Arabia 2.8 5.5 16.2% 3.5% 0 Canada 2.7 3.7 10.8% 1.5% 2007 2011 2030SOURCE: INTERNATIONAL DIABETES FEDERATION, BELL POTTER SECURITIES SOURCE: INTERNATIONAL DIABETES FEDERATION, CIA WORLD FACTBOOK, BELL POTTER SECURITIES Global diabetes prevalence has been rising rapidly 20At least 8% of the Type II Diabetes has been described as a ‘public health emergency in slow motion’ asworld’s adult the increase in Western-style diet and lack of exercise drives increased prevalence globallypopulation had year after year. International Diabetes Federation data from the last five editions of thatdiabetes in 2011 21 organisation’s Diabetes Atlas suggests that prevalence among adults aged 20-79 has increased from 4.6% in 2000 to 8.3% in 2011. Patient numbers over that time may have grown 8.2% pa, from 166 million to 366 million, with the current figure from IDF and recent 22 similar estimates published in The Lancet taking account of new data suggesting that 23 prevalence has previously been underestimated . 24 • The emergence of diabetes has been most noticeable in high income countries where, using IDF data, we estimate that prevalence has risen from 8.6% to 9.5% of 20- 79 year olds in just four years, from 2007 to 2011. • The world’s largest diabetes populations are those of India and China, with,There are over 150 25million diabetics in respectively, 61.3 million (8.3% of the adult population) and 90.0 million (9.3%)India and China estimated to be diabetics. We expect that rapidly rising incomes in these countries willalone ensure higher levels of medical expenditure directed to diabetes in the near future. • The problem is expected to get worse. The IDF has projected a 2.2% pa increase in diabetes patients numbers over the two decades to 2030, which would increase global prevalence by around 1.6% of the population aged 20-79, to 9.9%. This kind of growth19 See Diabetes "massive challenge" as cases hit 366 million by Ben Hirschler, Reuters, 13/9/2011.20 See Increase in diabetes: ‘A public health emergency in slow motion’ by Kim Janssen, Chicago Sun-Times, 16/9/2011.21 See See Lancet. 2011 Jul 9;378(9786):99.23 The 5th Edition of the Diabetes Atlas, which contains these new estimates, has recently been published online.24 That is, GDP per capita greater than US$20,000. Between 2007 and 2010 the prevalence of diabetes in middle-income countries (GDP per capita $10,000-20,000) rose from 7.5% to10.1% of 20-79 year olds, while over the same period low income countries increased prevalence from 5.0% to 7.6% of 20-79 year olds.25 Formerly IDF had estimated 43.2 million patients or 4.5% of the adult population, with numbers derived in part from Diabetologia 2003; 46: 1190-8. In March 2010 the IDF suggested that itsfigures probably underestimated diabetes in China by half. Page 5
  6. 6. Mesoblast (MSB) 31 January 2012 will see the number of diabetics in high and middle income countries rise by two to three times population growth.Figure 3 – India and China’s diabetes prevalence has been Figure 4 – 8% of adults in EU member countries are diabeticgrowing strongly 14% 10% Prevalence of diabetes in 20-79 year-olds 12% 9% Estimated percentage of population 8% 10% aged 20-79 with diabetes 7% 8% 6% 6% 5% India 4% China 4% 3% 2% 2% 0% Cyprus Slovenia Belgium Sweden Latvia Bulgaria Lithuania Greece Slovakia Portugal France Luxembourg Poland Austria Finland Spain Germany Denmark Hungary Czech Republic Netherlands Ireland United Kingdom Malta Romania Estonia Italy 1% 0% 2000 2003 2007 2011SOURCE: IDF SOURCE: IDF There have been two major beneficiaries of this increased need – the insulin suppliers, and the producers of pills that help boost pancreatic output of insulin. Together they have created the world’s fourth largest drug class, worth US$34bn pa, and growing 15% pa in local currency terms.Figure 5 – The global market for anti-diabetes medications is now Figure 6 – The anti-diabetes drug class has been growing 15% paworth US$34bn in local currency terms and 13% in US dollar terms 40 RoW spending 14.0% 40 US spending 13.5% 35 USDbn global sales of anti-diabetes agents 35 13.0% 30 Local currency sales growth 30 (RHS) 12.5% USDbn in sales 25 25 12.0% 20 Pills 20 11.5% 15 Insulin 11.0% 15 10 10.5% 10 5 10.0% 5 0 9.5% 2006 2007 2008 2009 2010 0 9.0% 2006 2007 2008 2009 2010SOURCE: IMS HEALTH, BELL POTTER SECURITIES SOURCE: IMS HEALTH Page 6
  7. 7. Mesoblast (MSB) 31 January 2012Insulin is now a ~US$14bn business 26The global insulin Around 27% of American diabetics currently use insulin as part of their therapy , whilemarket is growing possibly close to half of all diabetics become insulin-dependent within six years of 277% pa in volume diagnosis . Since diabetes is a chronic disease, this means many years of insulin usage 28terms by patients . With patient numbers increasing so rapidly the global market for insulin, now worth around US$14-15bn pa, is increasing at a 7% pa rate in volume terms and 17% pa in value terms: • The last five years has seen the rise of long-acting and ultra-short acting insulin 29 analogues, which improve the effectiveness of insulin therapy by providing adequate 30 basal and bolus insulin . We think these insulins are the main reason deaths from 31 diabetes are going down in the US and elsewhere . The cost for this, however, has been 7-8% pa inflation in the price of insulin as the mix has shifted; • We believe that the percentage of diabetics on insulin has increased by perhaps 2% of the patient population over the last five years, driven in part by a trend towards earlier 32 initiation of insulin treatment . The insulin market is completely dominated by three giant players: • America’s Eli Lilly, whose Humalog short-acting insulin enjoyed US$2bn in 2010 sales; • The French company Sanofi-Aventis best known for Lantus long acting insulin, which 33 th 34 did US$4.6bn in 2010 sales and was the world’s 15 most prescribed drug in 2010 . 35 • Denmark’s Novo-Nordisk , whose lead products are Levemir (a long acting insulin, US$1.2bn in global sales in 2010) and NovoRapid / Novolog (ultra-short acting insulin 36 products with US$2.2bn in global sales in 2010) . Figure 7 – Less people are dying from diabetes thanks to better Figure 8 – The insulin market has been growing at 17% pa as insulin products patients switch to longer-acting products 76,000 16 75,000 14 Worldwide sales (USDbn) US deaths from diabetes 74,000 12 10 Short acting, intemediate 73,000 and mixed 72,000 8 Ultra-short acting 71,000 6 Long-acting 70,000 4 69,000 2 68,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2010SOURCE: CDC SOURCE: NOVO NORDISK, SANOFI-AVENTIS, ELI LILLY26 Source: CDC, 2008 estimates. Remarkably, around 16% of American diabetics take no medications at all.27 This was a finding of the United Kingdom Prospective Diabetes Study, where 44% of subjects on the class of diabetes drug called sulphonylureas had failed within six years. See DiabetMed. 1998 Apr;15(4):297-303..28 Generally Type II diabetics have the same life expectancy as the general population - see PLoS One. 2009 Aug 28;4(8):e6817. In the US average age at diagnosis is around 46 – see AnnFam Med. 2005 Jan-Feb;3(1):60-3 - and US life expectancy is around 78. This potentially means up to three decades of insulin usage.29 See Arch Intern Med. 2008;168(19):2088-2094.30 Basal insulin being the base levels required to keep blood glucose stable between meals and overnight, and bolus insulin being the extra insulin needed to cope with sudden glucose intakeat mealtimes. In the last fifteen years the insulin market has segmented, with the short-acting insulins like Humalog (insulin lispro) emerging to provide the bolus solution, and two long-actinginsulins - insulin detemir (Levemir) and insulin glargine (Lantus) – leading the basal insulin space.31 In recent years diabetes has slipped to No 7, from No 6 previously, in the list of America’s most common causes of death.32 See Cleve Clin J Med. 2004 May;71(5):385-6, 391-2, 394 passim.33 It also sells Apidra, its ultra short acting insulin product that enjoyed US$200m in 2010 sales.34 Source: IMS Health.35 Bagsværd, Denmark, OMX: NOVO B, The company is currently seeking US approval for Deglugec, a long acting insulin that would compete with Lantus. Page 7