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Quarter-End Insights

Makings of a Wide Moat in Diabetes Care

Novel products will allow drug firms to achieve price premiums on diabetes drugs in the U.S. and at least retain level pricing internationally.

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  • If we were to assign the diabetes therapeutic area a moat, it would be wide, as we think barriers to biosimilar competition are high, pipeline productivity is strong, and unmet patient need remains high.
  • Next-generation insulins and novel oral therapies continue to offer safer and more effective ways of both controlling blood sugar and also lowering the risk of hypoglycemia and cardiovascular complications.
  • We expect sales of branded diabetes products to increase to $58 billion in 2018 from $33 billion in 2013, a 12% compound annual growth rate, and we think undervalued Sanofi (SNY) is well-positioned to benefit from the demographic trends supporting the diabetes growth.

 

Damien Conover does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.