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Sanofi's Diabetes Portfolio Update - Analyst Blog

Posted
10/2/2013 3:28:00 PM
By: Zacks.com
Referenced Stocks:AZN;LLY;NVO;SNY

Sanofi 's ( SNY ) diabetes segment has been performing well spearheaded by its lead product Lantus. Lantus sales are on the rise. The diabetes segment was further boosted by the EU approval of Lyxumia (lixisenatide) in Feb 2013.

The EC approved Lyxumia in combination with oral glucose-lowering medicinal products and/or basal insulin when these, in combination with lifestyle management, did not provide adequate glycemic control. In the second quarter of 2013, the drug generated sales of approximately €1 million.

In September, Sanofi announced its decision to withdraw the new drug application (NDA) for lixisenatide in the U.S. Sanofi was looking to get the drug approved for type II diabetes. The NDA included early interim data from the ongoing ELIXA cardiovascular (CV) outcomes study.

The company believes that potential public disclosure will hamper the integrity of the ELIXA CV study, which is expected to complete in the next 15 months. Sanofi intends to resubmit the NDA for lixisenatide in 2015, following the completion of the ELIXA CV study.

A sub-analysis of the GetGoal-L study revealed that Lyxumia in combination with basal insulin with or without metformin showed impressive efficacy. These effects were more pronounced in patients with relatively well-controlled baseline fasting plasma glucose levels.

Sanofi had in-licensed lixisenatide from Zealand Pharma.

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 Co. ( LLY ) and AstraZeneca ( AZN ).

Sanofi carries a Zacks Rank #4 (Sell). We are concerned about generic erosion confronting most of Sanofi's key drugs. Additionally pipeline failures (oncology candidate -- iniparib and anticoagulant -- otamixaban) have put immense pressure on Sanofi's pipeline.

Not all large-cap pharma companies are performing as badly as Sanofi. Novo Nordisk is well placed with a Zacks Rank #2 (Buy).



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