Rearranging the deck chairs

Rearranging the deck chairs

Well it seems our wine drinking friends in France just aren’t having a good day. Sanofi (NYSE: SNY) CEO, our good friend Olivier Brandicourt announced several management changes today. Among these changes was news that Pascale Witz who was in charge of diabetes and cardiovascular products, will leave the company on June 1 as part of a management shake-up. A position she has only held since January.

According to story by Reuters a Sanofi spokeswoman stated in an email; “We felt it was the appropriate time to make changes to the leadership organization as we move into the next stage of executing our priorities.”

Now we must keep in mind that Sanofi is famous for many things and not just killing the goose that laid the golden eggs, or the inability to execute when it comes anything diabetes related that isn’t named Lantus. Yes, in true French tradition our wine drinking friends are also known for beheadings and let’s be honest here folks that exactly what this was.

Frankly Diabetic Investor isn’t shocked by this news but we are beginning to question just what Olivier expects a person to do in such a short period. Let’s be honest here Ms. Witz took over the Titanic AFTER it hit the iceberg. Seriously just what did Olivier expect her to do other than rearrange the deck chairs on this sinking franchise. Ms. Witz did not create the problem nor did she have much time to fix the many issues facing the franchises.

But what the heck nothing like a good beheading to motivate what’s left of the troops.

Yet, and we know this will sound shocking, the diabetes franchise suffered another major setback today. And believe us when we say this that’s a major accomplishment given the many setbacks suffered by this floundering franchise. According to several news reports the FDA is questioning the value of the company’s latest diabetes disaster, LixiLan. LixiLan is a combination of Lantus and Lyxumia in one injection. Just in case anyone isn’t familiar with Lyxumia that’s Sanofi’s attempt, a very poor one albeit, to enter the GLP-1 space. A product which was pulled from the FDA and then resubmitted only so LixiLan could gain approval.

A product which Sanofi thought was so important they used a voucher for an expedited review of the drug. A product which would compete directly with Xultophy, Novo Nordisk (NYSE: NVO) version of a long acting insulin GLP-1 combination. A product that the FDA isn’t thrilled with either but more on that later.

According to the FDA briefings documents for Wednesday’s panel meeting; “Inadequate dosing of the insulin in the studies could have biased the estimate of efficacy in favor of the combination product. This would further confound interpretability of a clinical superiority claim for the combination against the insulin comparator.” For those who don’t speak FDA allow us to translate; the agency is claiming the studies done for LixiLan were biased in favor of LixiLan, imagine that.

The agency also raised additional questions as to whether putting these two drugs together when using one would be just fine. But not content to stop there the agency also noted that patients already treated with either product alone could not easily transition to the combination product. Nor were they impressed with pen delivery system noting the poor design could create dosing errors.

Now to be fair the agency expressed reservations about Xultophy but nowhere near what they noted with LixiLan.

So here’s what we’re thinking. It was Ms. Witz who recommended that the company use this very valuable voucher for an expedited review on a product that even if approved would face immediate competition from a company that actually knows what they are doing in diabetes. That she knew this product even if approved would find a tough time being accepted by physicians. That she also knew that payors wouldn’t provide what the company needed most, favorable formulary placement and premium reimbursement. Basically Ms. Witz knew that LixiLan was a pipedream and would come nowhere close to helping the sinking diabetes franchise.

Therefore, in true Sanofi tradition it was off with her head. Listen when our good buddy Chairman of the Board Serge Weinberg said he wanted management held accountable he wasn’t kidding. The word is out, screw up at Sanofi and it doesn’t just cost a person their job but off to the guillotine they go.  And we thought the Chicago Mob was tough.

Folks it’s about time to get with the program, when it comes to diabetes Sanofi would screw up a wining Mega Millions ticket.