The European Medicines Agency's drug-review committee has recommended approval for Sanofi's ($SNY) new multiple sclerosis treatment Aubagio. But the EMA says it doesn't deserve "new active substance" status, because it's a revamped version of a much older drug. And that means Sanofi's monopoly would be severely limited.
Not good for Sanofi, to be sure, Reuters reports. But the NAS refusal may actually hurt its competitors even more.
As Tim Anderson of Sanford Bernstein writes in an investor note, an early debut for Aubagio generics--perhaps as soon as three years from now--would not only dig into Sanofi's sales. The cheap drug copies could roil the European market for other MS drugs, too.
After all, Sanofi will be trying to promote its Aubagio pill as a convenient, effective alternative to injectable MS drugs like Teva's ($TEVA) Copaxone and Biogen Idec's ($BIIB) Avonex and Tysabri. Cheap versions of Aubagio could make that argument more compelling.
Sanofi figures that most of its Aubagio sales will come from the U.S., Anderson says. The company has said that Aubagio has already been prescribed by 80% of MS specialists, and it's only been on the U.S. market for 6 months. Still, Sanofi plans to ask the EMA to reconsider its NAS decision.