Sanofi was among a slew of pharmas to announce sweeping recalls of heartburn med Zantac tied to a probable carcinogen scare. Now, that recall has taken a big bite out of Sanofi's bottom line.
Sanofi took a €169 million ($186 million) write-down (PDF) on Zantac (ranitidine) in the fourth quarter following its October global recall of the drug. The French drugmaker retrieve the products because tested lots had unacceptably high levels of a nitrosamine impurity called N-nitrosodimethylamine (NDMA), a suspected carcinogen.
The recall torpedoed Sanofi's consumer health division on the whole, with sales decreasing 12.8% on the quarter to €246 million ($270.6 million). The drugmaker also targeted its own divestment efforts as a drag on the division overall.
The ongoing Zantac recalls have not only affected Sanofi, the maker of the branded version of the drug, but also a range of generics makers that are having to weather the blow.
Those retreats followed generics giant Mylan's voluntary recall the week before of three lots of nizatidine capsules due to NDMA. It was the first time nizatidine, a drug used for short-term treatment for duodenal ulcers, had been found with traces of NDMA.
The FDA originally blew the whistle on the contaminated drugs last fall, leading a slew of drugmakers and retailers to pull the drug from shelves. The FDA has tried to ease some of the public concern, arguing in November that the amount of NDMA found in the Zantac lots it sampled were similar to that in "grilled or smoked meats."
Sanofi's Zantac woes come as new CEO Paul Hudson launches an aggressive rebranding effort at the drugmaker centered on blockbuster eczema med Dupixent.
In November, Hudson blasted Sanofi’s 2018, $11.6 billion Bioverativ buyout, asking who was “asleep at the wheel” during the dealmaking process. In the second quarter, Sanofi posted a whopping €1.19 billion ($1.31 billion) write-down on Bioverativ's hemophilia med Eloctate, citing increased competition for the drug.
Those losses prompted Hudson to refocus Sanofi as well toward cancer and rare diseases and away from what he called "me-too" meds, or drugs that are late to market and face stiff competition.