Has Sanofi found religion?

Has Sanofi found religion?

This morning Sanofi (NYSE:SNY) announced third quarter results and not surprisingly the Lantus gravy train continues to roll along with sales up 21.2% worldwide and an impressive 30.4% here in the US. While some of this increase can be attributed to higher prices the fact is Lantus continues its impressive run and not surprisingly Sanofi will ride this thoroughbred until it can run no more. The fact is Lantus is the Secretariat of diabetes drugs.

As always when it comes to diabetes and Sanofi the company really doesn’t have all that much. Although sales of their short-acting insulin Apidra improved somewhat during the quarter the fact is sales had nowhere to go other than up. Perhaps more telling was a line from the company’s press release regarding Lyxumia® their once-daily GLP-1 which is approved in Europe but who’s NDA has been withdrawn from the FDA. According to the press release; “In Germany the GBA (Gemeinsamer Bundesausschuss) saw no additional benefit over the GBA-selected comparator therapies, due to factors including lack of study data versus these comparators. Sanofi disagrees with the decision of the GBA and is evaluating its options.”

Now Diabetic Investor hates to beat a dead horse here but the GBA basically stated what we’ve been stating all along Lyxumia is me-too, copycat late to market therapy which offers no performance advantage over twice-daily Byetta, once-daily Victoza or once-weekly Bydureon.  This decision by the GBA should also send a clear to message to Sanofi as the Lantus patent is getting set to expire, as Lilly (NYSE:LLY) has a Lantus copycat on the way and there will surely be a biosimilar Lantus coming to market. The fact is Sanofi will be in a world of hurt as governments across the globe and payors here in the US will seek their revenge on the company when these Lantus replacements arrive. As Diabetic Investor has noted previously for years Sanofi has pushing through price increases as Lantus was the only game in town a situation that will change dramatically in the next year or so and believe us when we say this but payback will be a bitch.

Perhaps this is why the company actually has a biosimilar insulin program in Phase I development. At the very end of the press release is a review of the company’s pipeline and there it is for everyone to see. Yes we know Phase I is very early stage and that this effort may amount to nothing. We also fully acknowledge that it is possible we missed this program in previous releases. Yet the mere existence of this program is somewhat shocking as the company has been trying to convince the investment community that Lantus sales will be hardly impacted by its patent expiration and that we won’t see a biosimilar anytime soon.

As we have noted many times when it comes to Sanofi and diabetes it all Lantus all the time and that’s it. Apidra even with its somewhat improved results this quarter isn’t even close to the massive sales numbers of its competitors. Given they have withdrawn the NDA for Lyxumia its fair to classify this effort as another failure in diabetes. Add in the iBGStar disaster, the indecision on whether or not to buy Bayer’s diabetes device and it’s not a pretty picture. Given this situation it actually makes sense for the company to have their own insulin biosimilar program, as the old saying goes if you can’t beat’em join’em.