07.17.13
174 Avenue de France
75013 Paris
France
Tel: (33) 1 5377 4000
Fax: (33) 1 5377 4296
www.sanofi.com
Top Selling Drugs*
Account for 62% of total pharma sales, up from 61% in 2011
Currency fluctuation giveth, and it taketh away. Last year, a strong Euro pushed Sanofi ahead of Merck for the #3 spot in our ranks. This year, an 8% drop in the value of the Euro makes Sanofi’s performance look worse than it was. Pharma revenues actually grew 5% last in constant exchange rates (CER), to nearly €30 billion. Still, we’re fickle taskmasters here at Contract Pharma, so Sanofi is officially the #4 company in our 2012 list.
Much of Sanofi’s growth came from the world’s best-selling diabetes drug, Lantus, which added €1 billion in revenues last year (+26% in CER). Sanofi caught a break in February 2013 when Novo Nordisk’s Lantus competitor, Tresiba, received a complete response letter from the FDA, in which the agency asked for an outcomes trial. That move could keep Tresiba out of the U.S. market for years, and Sanofi will be the prime beneficiary.
Lantus’ gains, along with revenues from the Genzyme acquisition, have helped offset the slower-than-expected generic erosion of Plavix. Sanofi received much lower royalties from BMS for Plavix and Avapro sales in the U.S., but Sanofi’s Plavix revenues were slightly up in Euros, from €2040 to €2066. Sanofi’s Plavix revenues dropped 6% in 4Q12 and 11% in 1Q13, while Sanofi’s Avapro/Aprovel sales dropped 34% and 21% in those quarters, respectively. Meanwhile, sales of cancer treatment Eloxatin cratered in 1Q13, falling 85% to $78 million. Without that drop, Sanofi’s top products would have had a flat quarter, instead of an 8% fall.
Along with the erosion of Plavix sales, Sanofi is also out $53 million, after France’s antitrust authority fined the company for disparaging Plavix generics. Teva complained that Sanofi engaged in a “strategy of denigration” against its generic entry in 2009. Sanofi projects that it will lose $1.1 billion in earnings (sales plus royalties from BMS) for Plavix in the first half of 2013.
We’ve covered Sanofi’s plans to move into the post-Plavix era previously: buy Genzyme, do heavy-duty internal/external R&D, grow in emerging markets, vaccines, generics and animal health, and, of course, make cost cuts. No major restructuring programs were announced in the past year, but the company did reveal its plans to consolidate its operations in its home country of France in September 2012. R&D operations in general were tabbed to grow or be maintained, while industrial vaccine operations would have to “improve [their] economic performance.” Sanofi hopes for 900 voluntary retirements by 2015 as part of “streamlin[ing] support functions to respond to the Group’s diversification and improve their efficiency.”
Shortly before press time, Reuters reported that Sanofi plans to drop 207 jobs in France, the net result of 376 layoffs and 169 new job openings on the R&D side. That news source said that union documents showed a net loss of 445 employees being at the Sanofi Pasteur vaccine unit (754 layoffs and 309 new roles), and another 243 jobs cut from its animal health and generic businesses. Saofi would not confirm those figures.
The fate of Sanofi’s research site in Toulouse has been up for debate, after Sanofi announced it would move anti-infectious research there to a site in Lyon. In May 2013, the company reported that it will look at spin-offs, local startups and “creation of a technological platform to provide services for Sanofi and other biotechnological or pharmaceutical companies” at the site.
In September 2012, Sanofi got FDA approval for Aubagio, the oral multiple sclerosis treatment that came over with the purchase of Genzyme. That treatment, caught between Novartis’ established Gilenya and Biogen Idec’s potential mega-hit Tecfidera, may not reach blockbuster status. Initially, the EMA voted that Aubagio doesn’t count as a New Active Substance, which would put the drug at risk of generic exposure as soon as 2016. Sanofi requested a review of that decision and, shortly before press time, the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) reversed that decision. The move gives Sanofi eight years of data exclusivity and two more years of market exclusivity from the date of approval.
The company is still waiting for approval for MS treatment Lemtrada, the future of which was a point of contention during negotiations to buy Genzyme. Analysts aren’t too high on Lemtrada’s prospects, arguing that newer MS drugs may overtake its benefits. CHMP recommended it for approval based on a pair of Phase III trials comparing it to Rebif.
One of Sanofi’s biggest drug approvals was for a product with a limited patient base. In January 2013, the FDA approved Kynamro, a cholesterol treatment co-developed with Isis, to help reduce bad cholesterol in patients with homozygous familial hypercholesterolemia (HoFH). There are only a few hundred people in America with HoFH, but what’s significant is that Kynamro is the it uses antisense, a gene silencing technique that’s been long promised to transform drug development. Only one antisense drug has been approved before this one, and Kynamro stands a chance at becoming the first commercially successful one.
Sanofi also made news with the approval of Zaltrap, a colorectal cancer treatment. However, it wasn’t the sort of news the company wanted. Several months after the August 2012 approval, doctors at Memorial Sloan-Kettering Cancer Center lambasted the drug’s pricing, contending that it was twice as high as that of Avastin, while not appreciably better when adjusted for dosage size. Within a week, Sanofi offered an effective 50% discount on Zaltrap in the U.S.
Sanofi’s partner on Zaltrap is Regeneron, a 25-year-old pharma firm (and the newest addition to our Top 10 Biopharma ranks, thanks to the sales of Eylea in 2012). The companies are also collaborating on dupilumab, a biologic treatment for asthma (and other indications) that may revolutionize treatment of that illness, as well as other programs. In February 2013, Sanofi informed Regeneron of plans to raise its equity stake in the company; it currently holds 17% of shares and but has an agreement in place not to acquire more than 30%.
In June 2013, the FDA approved the sBLA for Sanofi’s four-strain influenza vaccine, Fluzone Quadrivalent, in people age six months and older. The new vaccine will include two A strains and two B strains to protect against variations in flu seasons.
Not all the R&D results have been positive. Also in June 2013, Sanofi threw in the towel on a pair of Phase III candidates, iniparib for non-small cell lung cancer, and otamixaban, an anticoagulant. Sanofi said it would take a $285 million charge to write down iniparib, but didn’t mention costs related to otamixaban.
For now, Sanofi’s pharma fortunes are tied to Lantus and its successor, Lyxumia, which was approved in Japan shortly before press time. If the latter doesn’t suffer the same fate as Novo Nordisk’s Tresiba, Sanofi may gain some much needed breathing room as it passes by its patent cliff.
Acquisition News
Target: Genfar
Price: Not disclosed; Genfar had sales of $133 million in 2011
Announced: October 2012
What they said: “With this acquisition, Sanofi has a unique opportunity to strengthen its presence in Latin America through a large portfolio of affordable pharmaceuticals in a broad range of markets in the Andean countries and Central America.”
Lowe Down
So now that Genzyme’s pretty well digested, and now that the nasty patent expirations have hit, what is the Sanofi we see before us? The biggest company on the French stock exchange is still going around telling investors that they’re undervaluing their drug portfolio. That’s even with the Regneron PCSK9 inhibitor in Phase III, putting Sanofi in good position to be first to market in what could a crowded space (it’s been a while since there was a big new mechanism in atherosclerosis). They’re still talking about looking around for deals, but then again, so is everyone else, so deals are correspondingly harder to come by and more expensive.
You can tell that they’re trying to make the most of what they have already: the company’s doing such an aggressive job with the pricing of its current drugs that the European health systems are starting to push back. All this seems to point to a quiet period at the company for the next year or two, while they tend to their own pipeline, cultivate the Genzyme stuff (and the biologic/vaccine portfolio in general), and perhaps do a small acquisition here or there. Genzyme was enough of a meal for any python of this size.
Outsourcing News
In Reverse-Outsourcing News, Sanofi will serve as the CMO for Transgene’s immunotherapy products. The work is expected to begin in 1Q15 at Sanofi/Genzyme’s Polyclonals site in Lyon, France. Sanofi will produce clinical and commercial batches and Transgene will be a preferred customer of the commercial manufacturing platform for 15 years. The companies will invest a combined $13 million in a manufacturing suite at the Lyon site.
In March 2013, Sanofi also signed a pact to produce API for a biologic for DBV Technologies. The company will provide scale-up, process validation, and commercial scale supply of Viaskin, a therapeutic protein delivery system.
75013 Paris
France
Tel: (33) 1 5377 4000
Fax: (33) 1 5377 4296
www.sanofi.com
Headcount | 111,974 | |
Year Established | 2004 | |
Pharma Revenues | $38,259 | -3% |
Total Revenues | $44,928 | -3% |
Net Income | $6,603 | -20% |
R&D Budget | $6,328 | -6% |
Top Selling Drugs*
Drug | Indication | $ | (+/- %) |
Lantus | diabetes | $6,377 | 17% |
Lovenox | thrombosis | $2,434 | -17% |
Plavix | heart attack, stroke | $2,656 | -6% |
Polio/Pertussis/Hib | vaccines | $1,522 | 2% |
Aprovel | hypertension | $1,480 | -18% |
Eloxatin | colorectal cancer | $1,229 | -18% |
Influenza vaccines
|
influenza | $1,136 | -1% |
Renagel | hyperphosphatembosis | $839 | 45% |
Menactra | meningitis vaccine | $836 | 18% |
Cerezyme | Gaucher disease | $814 | 33% |
Taxotere | cancer | $724 | -44% |
Allegra | allergic rhinitis | $711 | -12% |
Ambien | insomnia | $639 | -6% |
Adacel | adult booster vaccines | $638 | -2% |
Myozyme | Pompe disease | $594 | 3% |
Amaryl | diabetes | $541 | -11% |
Depakine | epilepsy | $527 |
-2%
|
Currency fluctuation giveth, and it taketh away. Last year, a strong Euro pushed Sanofi ahead of Merck for the #3 spot in our ranks. This year, an 8% drop in the value of the Euro makes Sanofi’s performance look worse than it was. Pharma revenues actually grew 5% last in constant exchange rates (CER), to nearly €30 billion. Still, we’re fickle taskmasters here at Contract Pharma, so Sanofi is officially the #4 company in our 2012 list.
Much of Sanofi’s growth came from the world’s best-selling diabetes drug, Lantus, which added €1 billion in revenues last year (+26% in CER). Sanofi caught a break in February 2013 when Novo Nordisk’s Lantus competitor, Tresiba, received a complete response letter from the FDA, in which the agency asked for an outcomes trial. That move could keep Tresiba out of the U.S. market for years, and Sanofi will be the prime beneficiary.
Lantus’ gains, along with revenues from the Genzyme acquisition, have helped offset the slower-than-expected generic erosion of Plavix. Sanofi received much lower royalties from BMS for Plavix and Avapro sales in the U.S., but Sanofi’s Plavix revenues were slightly up in Euros, from €2040 to €2066. Sanofi’s Plavix revenues dropped 6% in 4Q12 and 11% in 1Q13, while Sanofi’s Avapro/Aprovel sales dropped 34% and 21% in those quarters, respectively. Meanwhile, sales of cancer treatment Eloxatin cratered in 1Q13, falling 85% to $78 million. Without that drop, Sanofi’s top products would have had a flat quarter, instead of an 8% fall.
Along with the erosion of Plavix sales, Sanofi is also out $53 million, after France’s antitrust authority fined the company for disparaging Plavix generics. Teva complained that Sanofi engaged in a “strategy of denigration” against its generic entry in 2009. Sanofi projects that it will lose $1.1 billion in earnings (sales plus royalties from BMS) for Plavix in the first half of 2013.
We’ve covered Sanofi’s plans to move into the post-Plavix era previously: buy Genzyme, do heavy-duty internal/external R&D, grow in emerging markets, vaccines, generics and animal health, and, of course, make cost cuts. No major restructuring programs were announced in the past year, but the company did reveal its plans to consolidate its operations in its home country of France in September 2012. R&D operations in general were tabbed to grow or be maintained, while industrial vaccine operations would have to “improve [their] economic performance.” Sanofi hopes for 900 voluntary retirements by 2015 as part of “streamlin[ing] support functions to respond to the Group’s diversification and improve their efficiency.”
Shortly before press time, Reuters reported that Sanofi plans to drop 207 jobs in France, the net result of 376 layoffs and 169 new job openings on the R&D side. That news source said that union documents showed a net loss of 445 employees being at the Sanofi Pasteur vaccine unit (754 layoffs and 309 new roles), and another 243 jobs cut from its animal health and generic businesses. Saofi would not confirm those figures.
The fate of Sanofi’s research site in Toulouse has been up for debate, after Sanofi announced it would move anti-infectious research there to a site in Lyon. In May 2013, the company reported that it will look at spin-offs, local startups and “creation of a technological platform to provide services for Sanofi and other biotechnological or pharmaceutical companies” at the site.
In September 2012, Sanofi got FDA approval for Aubagio, the oral multiple sclerosis treatment that came over with the purchase of Genzyme. That treatment, caught between Novartis’ established Gilenya and Biogen Idec’s potential mega-hit Tecfidera, may not reach blockbuster status. Initially, the EMA voted that Aubagio doesn’t count as a New Active Substance, which would put the drug at risk of generic exposure as soon as 2016. Sanofi requested a review of that decision and, shortly before press time, the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) reversed that decision. The move gives Sanofi eight years of data exclusivity and two more years of market exclusivity from the date of approval.
The company is still waiting for approval for MS treatment Lemtrada, the future of which was a point of contention during negotiations to buy Genzyme. Analysts aren’t too high on Lemtrada’s prospects, arguing that newer MS drugs may overtake its benefits. CHMP recommended it for approval based on a pair of Phase III trials comparing it to Rebif.
One of Sanofi’s biggest drug approvals was for a product with a limited patient base. In January 2013, the FDA approved Kynamro, a cholesterol treatment co-developed with Isis, to help reduce bad cholesterol in patients with homozygous familial hypercholesterolemia (HoFH). There are only a few hundred people in America with HoFH, but what’s significant is that Kynamro is the it uses antisense, a gene silencing technique that’s been long promised to transform drug development. Only one antisense drug has been approved before this one, and Kynamro stands a chance at becoming the first commercially successful one.
Sanofi also made news with the approval of Zaltrap, a colorectal cancer treatment. However, it wasn’t the sort of news the company wanted. Several months after the August 2012 approval, doctors at Memorial Sloan-Kettering Cancer Center lambasted the drug’s pricing, contending that it was twice as high as that of Avastin, while not appreciably better when adjusted for dosage size. Within a week, Sanofi offered an effective 50% discount on Zaltrap in the U.S.
Sanofi’s partner on Zaltrap is Regeneron, a 25-year-old pharma firm (and the newest addition to our Top 10 Biopharma ranks, thanks to the sales of Eylea in 2012). The companies are also collaborating on dupilumab, a biologic treatment for asthma (and other indications) that may revolutionize treatment of that illness, as well as other programs. In February 2013, Sanofi informed Regeneron of plans to raise its equity stake in the company; it currently holds 17% of shares and but has an agreement in place not to acquire more than 30%.
In June 2013, the FDA approved the sBLA for Sanofi’s four-strain influenza vaccine, Fluzone Quadrivalent, in people age six months and older. The new vaccine will include two A strains and two B strains to protect against variations in flu seasons.
Not all the R&D results have been positive. Also in June 2013, Sanofi threw in the towel on a pair of Phase III candidates, iniparib for non-small cell lung cancer, and otamixaban, an anticoagulant. Sanofi said it would take a $285 million charge to write down iniparib, but didn’t mention costs related to otamixaban.
For now, Sanofi’s pharma fortunes are tied to Lantus and its successor, Lyxumia, which was approved in Japan shortly before press time. If the latter doesn’t suffer the same fate as Novo Nordisk’s Tresiba, Sanofi may gain some much needed breathing room as it passes by its patent cliff.
Acquisition News
Target: Genfar
Price: Not disclosed; Genfar had sales of $133 million in 2011
Announced: October 2012
What they said: “With this acquisition, Sanofi has a unique opportunity to strengthen its presence in Latin America through a large portfolio of affordable pharmaceuticals in a broad range of markets in the Andean countries and Central America.”
—Heraldo Marchezini, senior vice president of Latin America, Sanofi
Lowe Down
So now that Genzyme’s pretty well digested, and now that the nasty patent expirations have hit, what is the Sanofi we see before us? The biggest company on the French stock exchange is still going around telling investors that they’re undervaluing their drug portfolio. That’s even with the Regneron PCSK9 inhibitor in Phase III, putting Sanofi in good position to be first to market in what could a crowded space (it’s been a while since there was a big new mechanism in atherosclerosis). They’re still talking about looking around for deals, but then again, so is everyone else, so deals are correspondingly harder to come by and more expensive.
You can tell that they’re trying to make the most of what they have already: the company’s doing such an aggressive job with the pricing of its current drugs that the European health systems are starting to push back. All this seems to point to a quiet period at the company for the next year or two, while they tend to their own pipeline, cultivate the Genzyme stuff (and the biologic/vaccine portfolio in general), and perhaps do a small acquisition here or there. Genzyme was enough of a meal for any python of this size.
—Derek Lowe
Outsourcing News
In Reverse-Outsourcing News, Sanofi will serve as the CMO for Transgene’s immunotherapy products. The work is expected to begin in 1Q15 at Sanofi/Genzyme’s Polyclonals site in Lyon, France. Sanofi will produce clinical and commercial batches and Transgene will be a preferred customer of the commercial manufacturing platform for 15 years. The companies will invest a combined $13 million in a manufacturing suite at the Lyon site.
In March 2013, Sanofi also signed a pact to produce API for a biologic for DBV Technologies. The company will provide scale-up, process validation, and commercial scale supply of Viaskin, a therapeutic protein delivery system.