Sanofi SA said late Wednesday it got a green light from U.S.
regulators to sell its new insulin product Toujeo, a crucial launch
for the French drug maker as it struggles to keep a firm grip on
the all-important diabetes market.
Sanofi is counting on Toujeo to help offset sales it will lose
when its top-selling drug, the insulin Lantus, loses U.S. patent
protection, which is expected later this year.
Encouraging doctors to switch patients to Toujeo and ensuring
that the new insulin is paid for by health insurers will be one of
the first major challenges for the French drug maker's new chief
executive, Olivier Brandicourt.
Mr. Brandicourt, a 59-year-old drug industry veteran who led
Bayer AG's health-care business after holding senior roles at
Pfizer Inc., is scheduled to take over in April, nearly six months
after the board abruptly ousted Christopher Viehbacher, citing his
lack of communication and management style.
Sanofi's diabetes portfolio will be a major focus for Dr.
Brandicourt, as the company grapples with growing competition and
pricing pressure in the U.S., Europe, and other markets.
Diabetes is one of the world's biggest drug markets, generating
more than $38 billion in yearly sales, according to EvaluatePharma.
In 2013, Sanofi had No. 2 in market share, behind Novo Nordisk A/S,
in large part due to sales of Lantus, the world's top-selling
diabetes drug.
But the market's size and growth also makes it among the
industry's most competitive. Companies including Eli Lilly &
Co. and Merck & Co. have been racing to sell low-price versions
of Lantus. Earlier this month, Sanofi said that sales at its
diabetes division, which accounts for about 20% of its EUR33.7
billion in total annual revenue, would be flat this year.
David Kliff, publisher of the Diabetic Investor newsletter,
warned that Sanofi could encounter resistance from health insurers
and drug-benefit managers who don't see the company's newer insulin
as being clinically different enough from cheaper insulins to
warrant a higher price.
"Sanofi is saying physicians will automatically switch Lantus
patients to Toujeo nothing could be further from the truth. Payers
are not going to allow that," Mr. Kliff said. Doctors might also
balk because the differences aren't big, as well as because Toujeo
is dosed differently than Lantus, Mr. Kliff said.
Pierre Chancel, senior vice president for diabetes at Sanofi,
said the company would do everything to ensure that patients"
access isn't an issue. "We will push for Toujeo," said Mr.
Chancel.
Toujeo is a long-acting insulin taken once daily. It was
approved for use by people with Type 1 and Type 2 diabetes. Sanofi
said it expects Toujeo to be available in the U.S. at the beginning
of the second quarter.
Credit Suisse estimates that Toujeo sales could reach about $2
billion annually by 2018. That won't be close to the revenues that
have been generated by Lantus, however.
Mr. Brandicourt's experience at Pfizer includes protecting a big
product. While heading the U.S. firm's primary-care business, Mr.
Brandicourt was given credit for helping keep sales strong for the
cholesterol drug Lipitor. The drug was once both Pfizer's and the
world's top selling medicine, notching more than $81 billion in
sales from its launch in 1997 until losing U.S. patent protection
in 2011.
After becoming an executive in 2012, Mr. Brandicourt also led
Pfizer's push to expand sales in emerging economies, a key market
for Sanofi. The move was important for the company as it sought new
revenues to replace aging drugs.
But some of his bets failed. While heading the primary-care
drugs business, he sought to expand Pfizer's portfolio of pain
drugs by buying King Pharmaceuticals in 2011 for $3.6 billion. But
Remoxy, a crown jewel of the King deal, didn't win FDA approval.
Pfizer last year returned all rights to partner Pain Therapeutics
Inc.
He was also in charge of the launch of Exubera, an inhaled
insulin that Pfizer had high hopes could be an alternative to
injections. The product failed to take off, and Pfizer said in 2007
it would take a $2.8 billion in charge to stop marketing the
medicine.
At Sanofi, Mr. Brandicourt will get another chance at succeeding
with inhaled insulin. Sanofi is joining with MannKind Corp. on
sales of Afrezza. The inhaled insulin received FDA approval last
June and was launched in the U.S. early this month.
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and
Noémie Bisserbe at noemie.bisserbe@wsj.com
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