Sanofi has been battling claims that it dragged its feet on multiple sclerosis (MS) drug candidate Lemtrada, acquired in its Genzyme buyout, to avoid follow-up payments to investors. But now, the drugmaker is forking over $315 million to resolve those claims.
Former Genzyme shareholders sued Sanofi in 2015 alleging the company dragged its feet on Lemtrada to avoid payouts tied to its development and approval. Set up as contingent value rights as part of its Genzyme buy, the payouts weren't supposed to figure into Sanofi's decision-making as it advanced the drug.
But that's just what management did, investors claimed. "Sanofi took those potential milestone payments into account in evaluating Lemtrada’s profitability, embarked on a slow path to FDA approval and departed from its own drug-commercialization patterns and those of others in the industry," the suit claimed.
Sanofi didn't admit wrongdoing under the settlement but will pay more than $315 million to resolve the claims. Originally, the former Genzyme shareholders said the delays cost them $708 million.
Sanofi picked up Genzyme in 2011 for $20 billion in one of biopharma’s most successful buyouts of the last decade. These days, Genzyme drugs are chipping in growth at the drugmaker as other areas of its business struggle.
Lemtrada won approval in November 2014 and is operating in an increasingly crowded MS field. Sales for the drug peaked in 2017 at €474 million ($528 million). Last year, the drug generated €402 million ($448 million).