In Attempt to Bolster Sagging Diabetes Revenue, Sanofi Inks Deal with Hanmi Pharma Worth $4.2 Billion

November 5, 2015
By Mark Terry, Breaking News Staff

Paris-based Sanofi announced today that it has inked a licensing deal with Seoul, South Korea-based Hanmi Pharmaceutical, Co., Ltd. worth $4.2 billion to develop several diabetes treatments.

Sanofi picks up exclusive worldwide rights to develop and commercialize three drugs, efpeglenatide, a long-acting glucagon-like peptide-1 receptor agonist (GLP1-RA), a weekly insulin medication, and a fixed-dosed weekly GLP-1-RA/insulin drug combination. Together these are dubbed the Quantum Project that utilizes Hanmi’s proprietary Long Acting Protein / Peptide Discovery Platform LAPSCOVERY technology.

The deal involves an upfront payment to Hanmi of €400 million. The Korean company is eligible for up to €3.5 billion in various development, registration and sales milestones, as well as double-digit royalties on net sales.

“The agreement to develop these three investigational diabetes medicines confirms Sanofi’s long-term commitment to people with this disease,” said Pascale Witz, executive vice president of Sanofi, in an statement. Under the company’s new organizational structure, Witz will lead Sanofi’s Global Diabetes and Cardiovascular Care Business Unit. “We now have the opportunity to expand our existing portfolio by including medicines that are administered weekly as well as daily, which could extend our reach in basal insulin and expand our GLP-1-RA and GLP-RA/insulin combination prospects.”

Sanofi’s diabetes business has been struggling recently. In October, the company reduced its sales forecast for diabetes drugs in the next three years. This was largely, though probably not exclusively, related to a slump in its best-selling Lantus sales. Bloomberg reported that Sanofi’s diabetes sales will likely drop from 4 to 8 percent through 2018. Lantus lost patent protection earlier this year and faced generic competition in Europe from Eli Lilly and Company

The diabetic drug market is facing a great deal of pressure lately. Enrique Conterno, head of Lilly’s diabetes segment, told Bloomberg in October that there was “a slowdown when it comes to the overall diabetes market.”

Just yesterday, Danbury, Conn.-based Biodel Inc. announced that it was cutting 30 percent of its workforce while launching and re-launching clinical trials for its long-acting diabetes treatments. The company’s 3-157 study will evaluate the company’s BIOD-531-based regimens control blood sugar levels, as well as evaluate the efficacy of a co-treatment with Victoza, a Novo Nordisk GLP-1 analog.

Biodel is also relaunching a Phase IIb 3-250 study of BIOD-531 compared to Eli Lilly’s Humalog Mix 75/25, after a partial hold by the U.S. Food and Drug Administration (FDA) was lifted.

Sanofi has also been battling slow sales of its inhaled insulin product, Afrezza, with MannKind Corporation . The drug was approved in the U.S. in early 2014, but hasn’t taken off as expected. This appears to be related to how insurers are classifying the medication, which is currently listed as Tier 3, which requires higher co-pays and some restrictions. Sanofi is believed to be working with regulators on having it listed as Tier 2, which is usually the classification for preferred brand name prescription drugs.

Despite those challenges, Sanofi also recently announced a partnership with Google /Alphabet’s Life Sciences on diabetes monitoring and treatment, which would likely only further strengthen the company’s hold on the diabetes market. The company plans to announce it’s five-year plan tomorrow. Only last week Sanofi indicated it expected its diabetes market revenues will keep dropping until 2018 due to increasing competition.

This new investment deal with Hanmi focuses on long-acting treatments, which, according to Reuters, is an area in which Eli Lilly and Novo Nordisk are very active. It’s also the area that Biodel is working in. Michael Novod, an analyst with Nordea, told Reuters that this deal was “very bad news” for Denmark’s Zealand Pharma. Zealand has a license agreement with Sanofi to globally develop and commercialize Lyxumia, a once-daily prandial GLP-1 agonist for Type 2 diabetes. That deal was inked in 2003 and amended in 2010. Sanofi submitted a New Drug Application for Lyxumia to the U.S. FDA in late July 2014. Under that deal, Sanofi pays for development and commercial costs and Zealand is eligible for up to $275 million in milestone payments, as well as low double-digit royalties.

Of the new deal, Gwan Sun Lee, chief executive officer and president of Hanmi, said in a statement, “We are pleased that Sanofi with its long heritage and as a proven leader with a solid track of success in diabetes, has recognized the value of Hanmi’s Quantum Project. We are confident that we have found the right partner and are excited for the potential this license agreement with Sanofi will bring to the development of Hanmi’s Quantum Project and possibilities this could offer to people with diabetes.”

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