An FDA advisory panel recently recommended the approval of Sanofi's multiple sclerosis drug, Lemtrada. However, that approval came among some mixed and contradictory opinions about the drug and the efficacy of Sanofi's trials.
On Nov. 13, the FDA panel voted 12-6
that Sanofi had provided enough evidence of Lemtrada's efficacy in
patients with relapsed MS, but at the same time voted 11-6 that the
company's trials had not been conducted thoroughly enough to properly
assess the drug. After those seemingly contradictory opinions, the panel
voted 14-0 that the drug should still be approved in December, despite
its potential to cause cancer and other problems.
what does all this mean for the future of Lemtrada, one of the main
drugs that Sanofi acquired in its $20.1 billion takeover of Genzyme in
Will it still stand a chance in a crowded market split
between Novartis' (NYSE: NVS ) Gilenya, Biogen Idec's (NASDAQ: BIIB )
Tecfidera, Teva Pharmaceutical's (NYSE: TEVA ) Copaxone, and Sanofi's
The importance of Genzyme
previous article, I pointed out that Sanofi has two primary areas of
strength -- its diabetes business and Genzyme, which focuses on
treatments for rare diseases and multiple sclerosis.
quarter, the diabetes segment -- which accounts for 20% of its top line
-- reported 20% year-over-year growth. Sales at Genzyme, which accounts
for 6% of the top line, climbed 21%.
reports the first four drugs together as Genzyme's "rare disease
segment," whereas Aubagio is categorized by itself in the MS category.
Lemtrada, which was approved in the EU in September, will be Sanofi's
second approved MS treatment.
Sales of Aubagio and
Lemtrada will become more important over the next year, since both
Cerezyme and Fabrazyme, which together account for half of Genzyme's
revenue, face rising pressure from Shire's competing treatments for
Gaucher disease and Fabry's disease.
analysts polled by Thomson Reuters, Lemtrada could generate annual peak
sales of $752 million by 2018 -- making it the second most important
drug in Genzyme's portfolio after Cerezyme.
The current market for MS treatments
Patients with MS are accustomed to some very bad side effect profiles from current treatments.
are currently three approved oral treatments on the market, Novartis'
Gilenya, Sanofi's Aubagio, and Biogen's Tecfidera. Gilenya can cause
potentially fatal heart problems and Aubagio can cause liver problems,
among other side effects.
Tecfidera currently has the
mildest side effect profile, which has made it Wall Street's favorite,
with peak sales estimates of $3.3 billion by 2017. Tecfidera is also
considered a replacement for Biogen's Tysabri, an infused treatment
which can cause liver damage as well as a rare brain infection. It could
also replace Biogen's Avonex, a widely used first-line injectable MS
All of these treatments have adversely
affected sales of Teva's Copaxone, an injectable MS treatment which
accounts for more than a fifth of its revenue. In addition, Copaxone
will face generic competition soon, further fragmenting the market for
We can see that demand for older
treatments like Copaxone, Avonex, and Tysabri has flattened out, and
that demand for newer orally administered treatments like Gilenya is
soaring. We can also see the massive threat that Tecfidera poses,
reporting $286 million in sales in its second full quarter on the market
-- a 49% jump from the previous quarter.
Will Lemtrada be able to squeeze into this crowded market?
so many treatments on the market, where does that leave Sanofi's
Lemtrada? One major disadvantage Lemtrada has is its safety profile. The
FDA stated that the treatment had "serious and potentially fatal safety
issues", including a higher risk of cancer as well as autoimmune and
Lemtrada is also given to patients in
annual infused doses -- a far less frequent dosage than that of other
infused treatments like Tysabri, which is given to patients every four
weeks. Some analysts are hailing Lemtrada's annual infusions as a step
toward a long-term "cure" for MS, but skeptics believe that the
significant risks may outweigh the benefits.
approved, Lemtrada will be given to patients with relapsed MS as a
second-or third-line treatment. Patients with relapsed MS now have ten
different treatment options available -- including Tecfidera, Tysabri,
Copaxone, and Aubagio.
The Foolish takeaway
increased selection of MS treatments is good news for the estimated
250,000 to 350,000 people diagnosed with debilitating neurological
disease. Increased competition should spur innovation and lower prices.
Yet as a result, the MS market is looking increasingly like the diabetes
market -- a crowded place which will only reward the most revolutionary
treatments, like Biogen's Tecfidera.
FDA panel opinion on Lemtrada was a positive development for Sanofi,
since it needs to keep Genzyme's portfolio well-balanced to deal with
competitive threats from Shire.