Blurred Vision

Blurred Vision

The wait is over and we know now the vision Olivier Brandicourt has for Sanofi (NYSE:SNY), a vision which seems not a path to the future but a return to past mistakes. Listening to the webcast and reviewing the slide presentation Diabetic Investor came away believing that when it comes to diabetes Sanofi is trying to reinvent themselves and become what Lilly (NYSE:LLY) is today. The problem is Lilly has a long and distinguished history in diabetes, while Sanofi will go down as a one hit wonder.

Accompanying today’s presentation was news that the company announced a deal with Lexicon Pharmaceuticals (NASDAQ:LXRX) who has …wait for it … an SGLT2.  No that’s not a misprint Sanofi once again is developing a me-too copycat late to market drug. Just as we noted yesterday when they announced their deal with Hanmi, Olivier is proving that he’s just as talented as his beheaded predecessor at making bad deals in the diabetes space. Even worse the company is trying to convince everyone that LixiLan, another me-too copycat late to market drug, will be a growth driver when this product will come to market well behind other GLP-1/Insulin combination products. This is the same tone they took when Toujeo was under development desperately trying to convince everyone that it was superior to Lantus.

As the company is finding out payors and physicians the people who truly count don’t see Toujeo as superior to Lantus. Hence the reason Sanofi was forced to discount Toujeo as payors just weren’t willing to provide the drug with favorable formulary position. As we have noted in the past physicians are very comfortable with Lantus and like everyone else don’t see Toujeo as a major improvement.

Yet the company remains committed to Toujeo and LixiLan. Something that cannot be said for Afrezza. As once again the Afrezza name was seen just one slide and no the company did not even bother to mention the drug. The message is very clear Afrezza is not part of the company’s long term plan making it even more likely that come January 1, 2016 the company will terminate their partnership with MannKind (NASDAQ:MNKD).

When it comes to diabetes the reality for Sanofi is this once powerhouse franchise has lost its power and is being relegated to also-ran status. The once grand plans to forever change diabetes fell victim to lack of execution. The fact is the company will go down as a one hit wonder, with Lantus being the only success in diabetes. We will not bother to list the many failures in diabetes as they are well documented. Nor is it necessary to restate the many mistakes made by management, mistakes which are now costing the rank and file their jobs.

Frankly we expected more from Olivier but then again other than making a big and bold move what else could he do. No disrespect to Olivier but cutting costs and refocusing the organization can hardly be considered innovative or ground breaking. Yet we aren’t surprised as we continue to believe that our good buddy Serge isn’t allowing his handpicked puppet to do what needs to be done. Serge is no mode to be bold and continues to be more concerned with pleasing the French then doing what’s best for Sanofi stakeholders.

It’s laughable that Serge noted that management needed to be held accountable when it’s the rank and file who will be getting axed. It’s laughable that the company hasn’t learned from the past that they continue to make the same mistakes. The harsh reality here is that Olivier followed the standard reorganization playbook. The reality is Serge and his fellow board members went home rather than going big.

Sorry Olivier but from our perspective when it comes to your diabetes franchise it’s nothing but a blurred vision.