Corks pop at Sanofi as FDA nixes Novo's Lantus challenger

Sanofi's ($SNY) Lantus will remain the heavyweight champion awhile longer. The FDA sent Novo Nordisk ($NVO) back to the training room with its long-acting insulin Tresiba, leaving Lantus unchallenged in its class. So, Sanofi can keep on scoring double-digit sales growth for its diabetes business, at least in the U.S.

The French drugmaker's stock surged on the news; after all, Lantus is the company's biggest-selling drug by far. It brought in almost €5 billion last year ($6.7 billion), up 20% in constant currency. The company had been girding for a match-up against Tresiba, which has shown a bit of an edge over Lantus in some studies. The Novo drug's efficacy data wasn't enough, however, to outweigh FDA worries about cardiovascular risks.

With Tresiba out of the picture at least until 2015--if not 2018, as Sanford Bernstein's Tim Anderson suggests--Sanofi has time to not only grow Lantus itself, but to amp up its Lantus franchise with new products. The company has a higher-concentration formula now in late-stage trials; it would be a once-a-day injection, compared with two-a-day with the current formula. Even before the Tresiba news hit today, Leerink Swann's Seamus Fernandez had upped his forecast for Lantus sales--both dosages included--to €6.6 billion ($8.83 billion) in 2020, €880 million higher than previous estimates.

It's also working on a combination injector-pen partnering Lantus with Sanofi's new diabetes drug Lyxumia, recently approved in Europe. One version of that injector that allows more flexible dosing just hit a snag, so the extra time could help there.

Speaking of Europe, Lantus will have to face Novo's Tresiba in that market. The drug won approval from EU regulators recently, and the Danish company says its plans for roll-out across the continent remain unchanged. "There will be no impact on the pricing. There will be no impact on our plans ... neither in Europe nor in Japan," Novo CEO Lars Sørensen said in announcing the FDA setback.

Europe isn't the biggest market for Lantus, however. Sales in Western Europe amounted to €778 million ($1.04 billion) last year, while the drug brought in €793 million ($1.06 billion) in emerging markets. Tresiba will be launched market-by-market in the EU as pricing and reimbursement negotiations allow, Novo says. 

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