The Future of Sanofi's Insulin Empire

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Sanofi (NYSE: SNY) appeared at the American Diabetes Association meeting last month, touting data for the new insulin U300 and a combo therapy involving its approved drugs Lyxumia and Lantus. Could these new drugs keep Sanofi near the top of the diabetes market heap?

Lantus is Sanofi’s top-selling product, earning 5 billion euros (or about $6.5 billion at current exchange rates) in sales last year. But the drug’s patent will expire in 2015 and there’s competition in the pipes. The delay of Novo Nordisk’s (NYSE: NVO) competitor opened a window for Sanofi, but Eli Lilly’s (NYSE: LLY) candidate might cause some trouble.

Here’s a look at the contenders that could sustain Sanofi’s insulin empire.

U300: Lantus successor

Sanofi has provided a data sneak peek for U300, a long-acting insulin product meant to act as Lantus’ improved successor. This data comes from the first half of a quartet of late-stage trials reporting this year.

U300 showed non-inferiority to Lantus when it came to managing blood sugar. But the drug more importantly showed an improvement at reducing nocturnal hypoglycemia -- or nighttime low blood sugar -- which is harder to manage.

Sanofi plans to file for regulatory approval in the first half of 2014. But if U300 should somehow crash before launch, Sanofi has a backup plan.  

Lyxumia + Lantus = LixiLan

The GLP-1 agonist Lyxumia won approval in several regions including the European Union and Japan but is still awaiting FDA review. GLP-1s are typically prescribed in a combo therapy including insulin for type 2 diabetes. Sanofi has paired Lyxumia with Lantus in an injection-pen device called LixiLan, which the company hopes will win patients over with its dosage convenience.  

Sanofi plans to start late-stage LixiLan trials in the first half of 2014. The company stepped up production due to delays that struck a potential competitor from Novo Nordisk.

The competition

Novo-Nordisk’s long-acting Tresiba, also called degludec,received a complete response letter from the FDA in February that requests additional cardiovascular safety data. Novo said it wouldn’t have the data this year and analysts estimate that it’ll take two to three years to get the kind of evidence the FDA’s requesting. The delay opens up a nice market window for Sanofi.

But Eli Lilly’s LY2605541 is still moving through the pipes. Mid-stage results showed the drug controlling blood sugar levels at least equal to Lantus. But LY2605541 also helped patients lose weight whereas Lantus and most other insulin products cause a slight weight gain. That’s particularly important for type 2 diabetes patients who often already have weight issues.  

Eli Lilly split from diabetes partner Boehringer Ingelheim earlier this year for LY2605541’s development -- meaning Lilly will assume all responsibility for the development and commercialization. The company’s tentatively planning to release phase 3 results next year, which would allow for a marketing application by year’s end.  

Diabetes drug dependence   

Sanofi’s limping a bit from 2012 patent losses that included blockbuster blood thinner Plavix and blood pressure drug Avapro. Diabetes products remain Sanofi’s best-performing platform, maintaining a 16.7% sales growth last year.  A complete loss of Lantus -- without an equivalent successor -- would prove devastating for the company.

Novo Nordisk is a diabetes leader thanks to the fast-acting insulin NovoLog, which had 2012 sales of 15.693 million DKK (about $2.7 billion at current exchange rates). Then there’s the $1.6 billion GLP-1 agonist Victoza and the $1.8 billion long-acting insulin Levemir. Those figures don’t come close to Lantus’ heights unless added together. Tresiba’s complete response letter was a definite blow so Novo might sit back and hope Sanofi’s candidates also get flagged for more data.

Eli Lilly’s making a broad spectrum of bets on the diabetes market that include a move into Victoza’s GLP-1 territory. But Lilly’s facing a tough year as its $5 billion antidepressant Cymbalta heads for the patent cliff and its pipeline has featured some late-stage cancellations.

Foolish final thoughts

Sanofi needs to bolster Lantus before it’s too late. Novo Nordisk is out of the race in the American market for the near future. Eli Lilly’s pipeline insulin could provide Lantus some competition. But that will require strong late-stage results and making it past the FDA without issue. And a potential cardiovascular safety flagging remains the big, blinking caution sign for all of the diabetes drug candidates.  

Brandy Betz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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