Novo Nordisk's Tresiba news a black cloud for Sanofi's new CEO

Incoming Sanofi CEO Olivier Brandicourt

The news was upbeat out of Novo Nordisk's Denmark headquarters Thursday. The insulin specialist will soon resubmit Tresiba to the FDA, earlier than once expected. The escalated timeline provided a substantial boost to Novo's shares, but the news adds pressure to Sanofi's ($SNY) new CEO since Tresiba targets Lantus, the French drugmaker's top seller.

In a two-sentence statement, Novo ($NVO) said it would submit the long acting diabetes drug to the FDA within the month, along with the interim analysis of the DEVOTE study. The drugmaker has been conducting further analysis of the drug's potential heart risks since the FDA in 2013 crushed Novo's expectations by asking for more safety data before considering the drug that it had pinned its future on.

"Given Novo's previous comments, this decision suggests the data as it stands does not suggest a raised cardiovascular risk," Sam Fazeli, an analyst with Bloomberg Intelligence, told Bloomberg. "This means a possible launch in the U.S. in 2016."

The drugmaker has snagged approvals for Tresiba, a long acting diabetes drug, in Europe, Mexico and Japan, but it is the U.S. market where its fortunes will be made. The news led a Goldman Sachs analyst to note the submission removes overhanging uncertainty about Novo and to raise his forecast for its shares. Its stock responded with a 14% surge--the biggest, single day jump in more than a decade, Bloomberg points out--before easing a few points.

The news comes just days ahead of Olivier Brandicourt taking over as CEO at Sanofi. The French drugmaker is in the midst of remaking its U.S. diabetes strategy, which ran into uncooperative payers looking for big discounts this year. Novo's news suggests a 2016 launch for Tresiba, leaving Brandicourt less time to regain traction in the U.S. for Sanofi's diabetes drugs and win converts to its own Lantus follow-up, Toujeo.

Toujeo won FDA approval last month and will launch in the U.S. Monday as Brandicourt comes onboard. Analysts have forecast Toujeo sales hitting €1.2 billion ($1.5 billion) by 2018, but that pales compared to the more than $7 billion that megablockbuster Lantus generated in 2014. Lantus is also facing a biosimilar from Eli Lilly ($LLY) and Boehringer Ingelheim. Their drug is expected to win approval and launch in 2016, when Tresiba is now expected to hit the market, meaning Lantus could be squeezed at both ends of the price spectrum by new competition.

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