September 23, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Paris-based Sanofi recently lost out in a bid to acquire Medivation to Pfizer . Part of the rationale behind Sanofi’s hostile takeover bid was to expand into the oncology market, because Sanofi’s domination in the diabetes market is weakening. Now Sanofi has had taken another blow when UnitedHealth (UNH) dropped Sanofi’s Lantus from its list of covered drugs for 2017.
UnitedHealth updated its coverage, and asked for client feedback by September 28. In a trend towards steering its clients towards lower-priced drugs, the insurer indicated it wouldn’t cover Lantus, but Basaglar, a similar insulin product sold by Eli Lilly would be listed as Tier 1, which would give its customers lower out-of-pocket costs. Novo Nordisk ’s Levemir was moved from Tier 1 to Tier 2.
CVS Health (CVS) also dropped Lantus last month, replacing it with Basaglar.
Analysts at Jefferies, according to Reuters, indicated that the UnitedHealth exclusion would have less of a sales impact on Sanofi than the CVS decision. CVS’s plan covers about 19 million people, whereas UnitedHealth’s covers about 15 million people.
“We are disappointed with the decision,” a Sanofi spokeswoman told Reuters. “For Sanofi, it is a pity not to leave doctors a choice. We have anticipated this kind of decision but we are holding discussions with other organizations in the Untied States to have them keep Lantus on their lists.”
In addition to Sanofi, UnitedHealth is also dropping Amgen ’s Neupogen, a white blood cell-booster, and replacing it with Novartis ’s biosimilar, Zarxio.
Nick Turner, an analyst with Mirabaud, notes that the Lantus exclusion was “significant bad news because it implies there will be a continuation of the pricing war within the diabetes sector in general and particularly with the insulin.”
Another problem Sanofi is facing is that its LixiLan Lantus-plus lixisenatide insulin combination therapy is being delayed for approval by the U.S. Food and Drug Administration (FDA). TheStreet writes, “Jefferies analysts noted that they expected the UnitedHealth exclusion, alongside a delay to U.S. approval for Sanofi’s LixiLan Lantus-plus-lixisenatide insulin combo, to push the diabetes revenue decline ‘towards the more bearish end of guidance.’ But they said patent infringement action confirmed by Sanofi this week against a subsidiary of Merck could at least delay the launch of a second ‘biosimilar,’ or generic, version of Lantus to early 2019.”
Lantus is Sanofi’s biggest seller, and accounts for about 20 percent of its $41.6 billion in total sales last year.
Since Olivier Brandicourt took over Sanofi after Chris Viehbacher’s ouster in 2014, his strategy has focused on boosting the company’s sagging diabetes market, pushing into other markets such as oncology, and slashing $1.63 billion in costs over five years.
After the Medivation deal fell apart, there were rumors that Sanofi might take a look at Novato, California-based BioMarin Pharmaceutical , not for its failed Duchenne Muscular Dystrophy (DMD) programs, but for its focus on rare genetic diseases. BioMarin has five products on the market, Vimizim for Morquio A Syndrome (MPS IVA), Kuvan for PKU, Nagalzyme for MPS VI, Aldurazyme for MPS I, and Firdapse for LEMS. It also has several products in the pipeline for achondroplasia, CLN2 disease, Hemophilia A and Sanfilippo Syndrome.
There have also been rumors that Sanofi might look at Vertex Pharmaceuticals , which markets Kalydeco and Orkambi for cystic fibrosis (CF) and has nine pipeline candidates in CF and cancer, or Alexion Pharmaceuticals , which focuses on rare diseases.
So it’s possible that the bad news with UnitedHealth may spur Sanofi to try shopping again.
