Tick Tock Tick Tock

Tick Tock Tick Tock

At the height of the cold war there something called the Doomsday Clock; the purpose of the clock was to tell everyone how close we were to a nuclear holocaust. The closer the clock was set to Midnight the closer we were to nuclear conflict. Thankfully the Doomsday Clock has never struck midnight but they may not be the case for Sanofi (NYSE:SNY) and their lone profitable diabetes product, Lantus.

Take a look at a statement made from a Lilly (NYSE:LLY) issued press release:

“Eli Lilly and Company’s (NYSE: LLY) basal insulin peglispro (BIL) demonstrated a statistically significant lower hemoglobin A1c (HbA1c) compared with insulin glargine (Lantus®) at 26 weeks and 52 weeks, respectively, in the IMAGINE-1 and IMAGINE-3 Phase III clinical trials in patients with type 1 diabetes. Patients in these trials were also taking mealtime insulin. Notably, patients in IMAGINE-1 continued treatment beyond 26 weeks, and the HbA1c superiority for BIL was maintained at 52 and 78 weeks.

The Phase III trials needed for submission are now complete. The trials, in both type 1 and type 2 diabetes, showed consistent superiority of HbA1c for BIL against comparators. Lilly is on track to file a submission with regulators by the end of the first quarter in 2015.”

Now we’re pretty sure that Sanofi will have some data for their Lantus replacement, Toujeo® as the European Association for the Study of Diabetes (EASD) annual conference is set to begin September 15. Yes Sanofi will show how Toujeo is … wait for it … better than Lantus. That patients using Toujeo experience fewer hypoglycemic events.  What won’t be said is that while fewer hypoglycemic events are nice, there is no way payors will pay a premium for Toujeo especially when … wait for it… there is a generic version of Lantus on the horizon.

All along Sanofi has tried to convince everyone that a generic threat to their prized product, Lantus, wasn’t as easy as everyone thought it would be. That it wasn’t so easy not just to come up with a generic but then to manufacture and market this generic.  The implication was that physicians and regulators would be very skeptical of any generic version of Lantus from some no-name company. They felt that even if some no-name company could navigate the regulatory process, manufacture it and find a partner to market it payors wouldn’t be comfortable endorsing a generic from some no-name company.

Well we hate to break the news to our good friends in France but Lilly is not exactly a no-name company.  Lilly has a long and very distinguished history in the diabetes space and while the company has had missteps in this space they are back and back in a big way. With each passing data set and today’s was a perfect example of this, it’s becoming obvious that Lilly’s generic version of Lantus is just as good, if not better than Lantus.

Basically what Lilly is doing is taking away any obstacle a payor or physician might have.  Even our wine drinking friends in Paris have to acknowledge that payors, physicians and patients are very comfortable with diabetes products from Lilly.

The harsh reality is that when it comes to Lantus the Doomsday Clock is clicking ever closer to midnight. That Sanofi has squandered an opportunity to become a true leader in diabetes and soon will be regulated to the sidelines. Toujeo, even if gets here, isn’t the answer and neither is Afrezza. Try as they might to convince everyone of the potential of these two products the fact is you can put lipstick on a pig but it’s still a pig. The harsh reality it’s Sanofi that’s about to get slaughtered.