Sanofi ($SNY) was handed a double win today when European regulators recommended both its cancer treatment Zaltrap and its diabetes drug Lyxumia for sale in the EU. The Zaltrap win comes a week after Sanofi put the drug on fire sale prices in the U.S. because some high-powered doctors here said they wouldn't use it because it was too pricey.
The European Medicines Agency (EMA) issued its recommendations today. The summary of its thinking on Lyxumia was not yet available, but as Reuters points out, the Type 2 diabetes drug is in a class of treatment designed to make patients release insulin when their blood sugar gets too high. It is also one of a number of drugs the French drugmaker hopes will kick up its revenue as it suffers from patent loses on drugs like its blockbuster blood thinner Plavix.
The market is potentially huge for these kinds of drugs. The market for all diabetes treatments has been forecast to hit $54 billion by 2020. But lots of companies are angling for their share of this growing market and the space for these kinds of drugs is already filling up. Lyxumia faces competition from Bristol-Myers Squibb's ($BMY) Byetta as well as Victoza from Novo Nordisk ($NVO), the Danish insulin maker.
Zaltrap, which Sanofi developed with partner Regeneron ($REGN), was approved in combination with chemotherapy for adults with metastatic colorectal cancer (MCRC) that is resistant to or has progressed after an oxaliplatin-containing regimen, the agency said. The EMA says it recommended Zaltrap because it improves the survival rates of patients and delays the progression of the disease.
A week ago, Sanofi effectively dropped the price of the colorectal cancer drug by half only three months after the FDA had approved it for the same indication. The price of Zaltrap, which the company says costs about $9,600 per month for a typical patient, was dissed last month by three doctors at Memorial Sloan-Kettering Cancer Center who said the hospital would not use Zaltrap if its price remained that high. Other available drugs are just as effective, they said, so why provide the far more expensive Zaltrap? Roche's ($RHHBY) Avastin already leads the market and the EMA today recommended its continued use beyond first progression in patients with advanced colorectal cancer.
Sanofi disagreed but said it would work with providers on cost-reduction programs because "we recognize that there was some market resistance to the perceived relative price of Zaltrap in the U.S., especially in light of low awareness of Zaltrap in the U.S. market." Analysts have forecast Zaltrap to max out at $300 million to $400 million, given competition from Avastin, which dominates the market, and Bristol-Myers' Erbitux.