Better to get something than nothing at all

Better to get something than nothing at all

In a move that can only be described as stunning and telling Lilly (NYSE:LLY) and Sanofi (NYSE:SNY) have settled the patent litigation over Lilly’s biosimilar version of Lantus. According to a Lilly press release;

“Eli Lilly and Company (NYSE: LLY) has entered into a settlement agreement to resolve patent litigation with Sanofi regarding its insulin glargine product, Basaglar®. As a part of the agreement, Lilly and its alliance partner, Boehringer Ingelheim, will have the ability to launch Basaglar in the U.S. on December 15, 2016. Under the terms of the agreement, Sanofi has granted Lilly a royalty-bearing license so Lilly can manufacture and sell Basaglar in the Kwikpen® device globally. Further details regarding the settlement are confidential.

The U.S. Food and Drug Administration tentatively approved Basaglar in August 2014. With this resolution, Lilly plans to request final approval of Basaglar from the FDA.

“The settlement agreement ends the legal dispute between Lilly and Sanofi and provides us with certainty as it relates to our U.S. launch timing,” said Michael J. Harrington, senior vice president and general counsel for Lilly. “This enables us to focus our efforts on preparing to successfully market and launch Basaglar in the U.S. in December of 2016.”

To Diabetic Investor this signals that Sanofi read the tea leaves and realized that it was better to get something rather than nothing. That regardless of the outcomes of the lawsuit that their diabetes franchise was about to watch its golden goose become a dead duck.

We further believe this move sends another very important signal, which became brighter with the FDA’S approval of Tresiba this past Friday when it comes to diabetes and Sanofi the glory days are gone and likely never to return. That with Toujeo and Afrezza underperforming it’s just a matter of time before two things happen. First look for Olivier to institute major layoffs and second say goodbye to Afrezza and the MannKind (NASDAQ:MNKD) partnership. The harsh reality is that Sanofi can no longer afford to throw more time or money into Afrezza. That better to allocate time and resources towards Toujeo.

While we have no idea what Lilly is paying Sanofi this move also signals how serious and how committed they are to their diabetes strategy. It also could signal that the issues plaguing Peglispro are as serious as many believe and it’s unlikely this drug will make it through the regulatory process.

This series of events with Tresiba being approved Friday afternoon and now this settlement between Lilly and Sanofi further confirms what we’ve been saying for some time now. The more things change the more they stay the same. That when it comes to the diabetes drug market it’s a battle between well-established experienced heavyweights with long standing histories in diabetes. That Sanofi is getting ready to throw in the towel and AstraZeneca (NYSE:AZN) better get their act together in a hurry or risk seeing their diabetes franchise become the next Sanofi.

Yep this is a battle between Novo and Lilly – the more things change the more they stay the same.