Sanofi ($SNY) is in the process of cleaning house--and its anaphylaxis remedy, Auvi-Q, is next on the list of things to go.
As PDL BioPharma ($PDLI) CEO John McLaughlin said earlier this week on his company's fourth-quarter conference call, the French pharma giant and Kaleo--from whom it licensed Auvi-Q back in 2009--plan to kill their marketing deal later this year. When that happens, Kaleo will take back all commercial and manufacturing rights to the drug in the U.S. and Canada. Kaleo owes PDL about $145 million in loans that were backed by Auvi-Q royalties.
Auvi-Q--the first real competition to Mylan's ($MYL) giant EpiPen in years--ran into trouble last November, when an injector fault and hefty recall prompted Sanofi to pull the contender from the marketplace. The move gave already-dominant Mylan the opportunity for a market-share coup, with one analyst suggesting it was primed to capture a 95% piece of the pie.
That uphill marketplace slog isn't one Sanofi wants to deal with right now. The pharma giant is currently wading into a monster project of its own after new chief Olivier Brandicourt announced in November that it's looking for $1.6 billion in cost cuts to spur a turnaround.
And as the drugmaker homes in on its focus areas of diabetes/cardiovascular, vaccines, rare diseases and emerging markets--as well as those where it wants to build scale, such as multiple sclerosis and consumer health--it's casting off assets that don't fit the mold or aren't pulling their weight. In December, it said it was working on a trade with Boehringer Ingelheim that would send its animal health unit to Germany. And the following month, it pulled out of a marketing partnership with MannKind ($MNKD) over disappointing inhaled insulin prospect Afrezza.
Meanwhile, the Auvi-Q problem will now be Kaleo's to deal with--and it's one that McLaughlin is not yet sure the Richmond, VA-based company wants to take on. While he believes the drugmaker has the bandwidth to manufacture and market the treatment on its own, it's taking some time to "evaluate the timing and options for bringing Auvi-Q back to the market," he said.
- read the call transcript
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