Guess we have to

Not sure why but since our chardonnay guzzling friends are still technically in the diabetes business, we should cover their earnings which were announced this morning and which for diabetes flat out sucked. Here are the highlights (well actually the lowlights is more appropriate) from the press release;

“In the second quarter, Lantus® sales were €758 million, down 16.2%. In the U.S., Lantus® sales decreased 33.7% to €284 million, mainly reflecting lower average net price and the increased contribution to the coverage gap related to Medicare Part D. In Europe, second-quarter Lantus® sales were €146 million, down 16.1% due to biosimilar glargine competition and patients switching to Toujeo®.”

The news isn’t much better for the company’s other diabetes products but why torture the poor bastards, have they not suffered enough. We have reached that point where Sanofi and diabetes once together like peanut and jelly are now more like an estranged couple slowly separating and ending a once happy marriage. These two don’t belong together anymore they just haven’t officially ended the relationship.

Just to prove they haven’t lost their reverse Midas touch and are absolutely the worst partner in diabetes the company last Friday cut ties with Lexicon. This move should shock no one for even had Zynquista made it through the FDA there really wasn’t much of a market for this drug. The only winner here would have been Lexicon who unfortunately is paying a heavy price for the separation with shares down over 70% so far today.

It’s time to start thinking about whether or not the company will take any steps to get something for this once mighty franchise or will they simply let it die a slow and very painful death. The franchise even in its wounded state does have value and in the right hands with the realistic strategy could be a force in diabetes. It’s not like any company can just make insulin on a massive scale.

Since AstraZeneca, the most natural fit for Sanofi’s insulin franchise seems content on screwing up their own diabetes franchise the buyer would either be a non-traditional pharma player or private-equity. Unencumbered with the Sanofi panache for doing the wrong thing at the wrong time and then doing it in the worst possible way the new owners could turn the franchise into an insulin delivery company. An insulin delivery company which would own the most recognized name in insulin, Lantus and have a biosimilar short-acting insulin Admelog which they can price cheap plus if the new owners get the Verily partnership, they would also have the makings of a Tyler.

This new company could excuse the expression take the low road when it comes to insulin delivery by offering value priced insulin delivery systems. This would give Lilly and Novo Nordisk fits while turning the entire insulin market into a free for all. Insulin is already a commodity and given the increasing political pressure on insulin companies this move would reap tons of free PR.

Now does Sanofi know this or have the mental capacity to appreciate the possibilities? Do they understand that as badly as they have managed this franchise someone else could come along and pay them billions of dollars to take this franchise off their hands? Or are they so arrogant and blind that they think they can fix the franchise and transform it into what it needs to be? Please take a moment before you answer these question and remember this Sanofi, we are talking about here a company that could screw up a winning Powerball ticket.