The Committee for Medicinal Products for Human Use (CHMP) of the
European Medicines Agency (EMA) recently issued a positive opinion
related to Sanofi 's ( SNY ) diabetes drug,
Lantus. The CHMP recommended the inclusion of safety and efficacy
data from the ORIGIN (Outcome Reduction with Initial Glargine
INtervention), a cardiovascular (CV) outcomes study, in Lantus'
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Data from the seven-year ORIGIN study revealed no difference
between Lantus and standard of care in terms of CV disease and
Lantus, which generated sales of €1.3 billion in the first quarter
of 2013, is one of the top-selling drugs at Sanofi. We believe data
from this study will encourage physicians to prescribe
Lantus is also available as a pre-filled insulin injection pen,
Lantus SoloSTAR. In the US, Lantus SoloSTAR accounts for 57% of
Although Sanofi holds a strong position in the diabetes market, we
note that the market is highly crowded with players like
Novo Nordisk ( NVO ), Eli
Lilly and Company ( LLY ) and
AstraZeneca ( AZN ).
Sanofi carries a Zacks Rank #3 (Hold). We remain concerned about
the generic erosion confronting most of Sanofi's key drugs
including Plavix, Avapro, Lovenox, Taxotere, Eloxatin and Xatral.
The genericization of Avapro and Plavix is expected to negatively
impact Sanofi's business net income by around €800 million in the
first half of 2013.
Sanofi is looking to combat headwinds by containing operating
costs. Additionally, new product launches should make significant
revenue contributions in the upcoming quarters.
Companies that currently look attractive include Novo Nordisk,
carrying a Zacks Rank #2 (Buy).