Sanofi's fight for Toujeo market share won't be easy, analysts say

Incoming Sanofi CEO Olivier Brandicourt

Sanofi ($SNY) has its second diabetes approval in as many months: Toujeo, its long-acting follow-up to the megablockbuster Lantus. It's a big moment for the French drugmaker and its diabetes franchise, which needs the new drugs to perform, and quickly, to cushion the blow from forthcoming Lantus biosimilars.

Analysts see Toujeo sales hitting €1.2 billion ($1.5 billion) by 2018, but Sanofi no doubt has bigger ambitions; Lantus brought in more than $7 billion in 2014. That means a fight for market share, with Lantus and Novo Nordisk's ($NVO) Levimir, which has been gaining on Lantus in recent quarters. At first--the Lantus biosimilar from Eli Lilly ($LLY) and Boehringer Ingelheim will likely make its debut next year.

Toujeo carries less risk of a blood sugar drop, compared with Lantus, particularly at night, clinical data showed. The company tells Bloomberg that its will price Toujeo roughly the same as Lantus, to encourage switching to the new formula.

But success is not guaranteed. The official FDA label apparently doesn't give Toujeo the edge over Lantus that Sanofi had been hoping for. It doesn't include the data on night-time hypoglycemia, for one thing. It also notes that patients may need higher doses of Toujeo than Lantus to achieve the same level of blood sugar control, Reuters notes.

So, Sanofi may find it tough to portray Toujeo as clearly superior to Lantus; as Bernstein analyst Tim Anderson says, the drug's label likely will be viewed as "more undifferentiated" than previously expected. He doesn't expect many Lantus patients to switch to Toujeo.

"Existing users of Lantus probably stay on Lantus for the most part, meaning the primary battle ground will be with "new patient starts" and this is only a smaller bucket of patients that grows over time," Anderson said in a Wednesday note. Sanofi says 1 million potential patients join the basal insulin market each year.

Novo's Levemir will be in there scrapping for new patients, too. The Danish drugmaker has been doing some aggressive negotiating with U.S. payers, and intensive marketing, to gain share for Levimir. And it has worked; the drug has racked up several percentage points in share over the past few quarters.

Lantus remains the by-far-bigger drug in the basal insulin market, though, and so the biggest threat to Toujeo is likely Lilly and Boehringer's Lantus biosim. The companies may be willing to offer some big discounts to grab a piece of the basal insulin pie.

So, Sanofi may need to do the same with Toujeo. Though its list price might be basically the same as Lantus', rebates and other offers can change that substantially. With little differentiation to help it support its case for Toujeo with payers, dealmaking could make the difference in gaining favorable spots on formularies. Anderson says Toujeo's effective price may need to be more than 15% lower than Lantus to get traction with payers.

Toujeo will launch in April, Sanofi says, which happens to be the month when Sanofi's new CEO, Olivier Brandicourt, will take up his post. He may have some ideas about how to protect the company's insulin glargine franchise, whether Lantus or Toujeo; as The Wall Street Journal points out, he was credited with keeping Pfizer's ($PFE) Lipitor sales up as the statin drug faced generic versions of competing brands. The launch will also be a test for Sanofi's revamped U.S. diabetes business, which has new management.

- see the Sanofi release
- get more from Bloomberg
- see the Reuters story
- read the WSJ piece

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