A one trick pony

A one trick pony

In a stunning turn of events Sanofi (NYSE:SNY) announced this morning they are withdrawing the New Drug Application (NDA) for their once-daily GLP-1 lixisenatide from the FDA. According to a company issued press release;

“Sanofi (EURONEXT: SAN and NYSE: SNY) announced today its decision to withdraw the lixisenatide New Drug Application (NDA) in the U.S., which included early interim results from the ongoing ELIXA cardiovascular (CV) outcomes study. The company plans to resubmit the NDA in 2015, after completion of the ELIXA CV study.

The decision to withdraw the lixisenatide application follows discussions with the U.S. Food and Drug Administration (FDA) regarding its proposed process for the review of interim data. Sanofi believes that potential public disclosure of early interim data, even with safeguards, could potentially compromise the integrity of the ongoing ELIXA study. Sanofi’s decision is not related to safety issues or deficiencies in the NDA.

The ELIXA study continues as planned and is fully enrolled. Complete results should be available in approximately 15 months. Therefore, Sanofi came to the conclusion that the most appropriate option is to support the FDA’s evaluation of lixisenatide based on the complete results of the ELIXA study rather than interim data.

The combination of lixisenatide and Lantus® (basal insulin), the investigational LixiLan fixed-ratio product, remains on schedule to enter into phase 3 in the first half of 2014.”

It’s overstating the obvious that this is just another failure in their diabetes franchise which for all practical purposes is now a one trick pony: Lantus.  A pony which is running a race which it cannot win for as we noted these past two days the insulin world is changing and a biosimilar version of the drug is on the way.

Looking ahead one has to wonder just what the company will do going forward in the diabetes space. At one time it appeared that the company was on the right track developing a multifaceted approach to diabetes management. An approach that included not just the drugs used by patients but also the devices combined with patient education. In other words they were developing a diabetes management system rather than selling individual pieces of the system.  Although unique this system based approach fits nicely into the future of healthcare where physicians will be incentivized to produce better patient outcomes. This system based approach also would lessen the company’s reliance on Lantus and if successful could have helped Sanofi achieve their stated goal; overtake Novo Nordisk (NYSE:NVO) as the most dominate global diabetes company.

Yet from the beginning this ambitious strategy began to unravel, as we have noted several times before Apidra their effort to gain share in the short-acting insulin market has been a dismal failure, next came their ill-fated attempt to enter the conventional blood glucose monitoring market and now comes yet another setback with their attempt to enter the GLP-1 market.

Now truth be told even if lixisenatide made it to market the drug was nothing special basically a Victoza copycat. Like so many others in the diabetes space Sanofi made a critical error by not buying Amylin and then they compounded this mistake by develop a me-too, copycat drug which would be the third entry into the market, not exactly a good position to be in no matter how good the drug might be.  The fact is Amylin would have been the perfect fit for Sanofi and given the company a real leg up on Novo. But once again the company couldn’t pull the trigger on a deal.

The question now is with basically nothing in late stage development and the Lantus patent expiration looming can the company remain relevant in diabetes. And while the company did note that the lixisenatide/Lantus combination product will move to phase 3 in the first half of 2014, this is hardly comforting given half of this combination is now tainted.

Diabetic Investor suspects today’s decision had as much to do with the company’s P&L as it did with what the studies showed. As we noted already the drug even if approved would have come to market well after Byetta, Victoza and Bydureon. Given it was a once daily injection it was already substandard when compared to the once weekly Bydureon which meant it would have to steal share from Victoza to have any chance at all to be commercially viable. This basically meant the drug would have to offer not just comparable results to Victoza but superior results.

Now since no one but Sanofi and the FDA knows what the CV data is, today’s decision tells us the data wasn’t good. Given the FDA’s fascination with cardiovascular data, thank you very much Dr. Nissen, and the increased attention given to these results Sanofi likely looked at the entire situation and decided better to cut their loses then double down and lose even more later. They figured they could still combine the drug with Lantus, which honestly has been their goal all along. As this is the next big diabetes drug category insulin/GLP-1 combo’s. Yet here too the company is already behind the eight ball as Novo also has a combo product in the pipeline a product where the GLP-1 component is not tainted.

So we ask again what’s next for Sanofi, will they ride the Lantus pony all the way to the glue factory or will they try and acquire their way back to diabetes relevance?  An interesting side story will be who if anyone pays the price for Sanofi’s many failures in diabetes. Keep in mind this is a company that spent a fortune to build their diabetes franchise and with the exception of Lantus they have nothing to show for their efforts.

Back in the day when Sanofi was embarking on this now ill-fated diabetes strategy Diabetic Investor said it would all come down to whether the company was able to execute. It’s rather obvious they did not which given their French roots means that heads should roll. Viva La France!