Sanofi Investors Count Cost of Praluent Ruling
January 06 2017 - 8:41AM
Dow Jones News
By Denise Roland
A ruling by a U.S. judge to permanently block the sale of Sanofi
SA's new cholesterol-lowering drug could deal a blow to the French
drugmaker's ambitions for what it hoped would become a blockbuster
product.
Sanofi shares were down 2.8% at EUR76.07 ($80.63) Friday
afternoon in Paris.
The drug, called Praluent, was found late Thursday to infringe a
patent held by Amgen Inc. for the U.S. company's rival medicine
Repatha. Both drugs belong to a new, powerful class of
cholesterol-lowering medicines known as PCSK9s and were approved
within weeks of each other in 2015.
For Sanofi, the stakes are high: It is leaning heavily on
Praluent and a clutch of other recently launched drugs to offset a
sharp decline in sales from its best-selling insulin medication
Lantus. Analysts expect Praluent eventually will generate around $3
billion a year, though that revenue would be shared with Regeneron
Pharmaceuticals Inc., who co-developed the drug.
The French drugmaker said it would immediately appeal the
decision, a move that could delay any block from the U.S. market by
up to one year, according to Citi analyst Peter Verdult.
In a worst-case scenario for Sanofi, that appeal would be
unsuccessful and it would be forced to withdraw Praluent from the
market, but analysts have placed a higher likelihood on a ruling
that Sanofi must pay Amgen a royalty of 15% to 20% on sales of
Praluent.
Even so, Praluent hasn't lived up to its initial promise. Both
it and Repatha have struggled to gain momentum in the U.S. market,
in part because the PCSK9s have yet to prove that they are more
effective at reducing the risk of heart attack, stroke and other
serious cardiovascular problems than the much less costly
statins.
Sanofi is running a large clinical trial that it hopes will show
Praluent significantly lowers cardiovascular risk compared with
statins and drive higher demand for the drug. But should that trial
fail, it may not be financially worthwhile for Sanofi to consider a
high royalty payment to Amgen, according to Leerink analyst Seamus
Fernandez.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
January 06, 2017 08:26 ET (13:26 GMT)
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