Sanofi 2018: Weathering patent erosion
Executives continue to have faith in Sanofi’s strategic plans to get the company to new heights despite continued impact from patent expirations.
54, Rue La Boetie
75008 Paris, France
Telephone: +33 (0)1 53 77 40 00
|Product||2017 Sales||2016 Sales|
All figures are in millions of dollars, except EPS, and were
translated using the Federal Reserve Board’s average rate
of exchange in 2017: EUR 1.1301 = $1.00
|1H 2018||1H 2017|
All figures are in millions of dollars,
except EPS, and were translated using
the Federal Reserve Board’s average rate
of exchange in 2017: EUR 1.1301 = $1.00
“Over the last three years, our company has profoundly transformed itself,” says CEO Olivier Brandicourt. According to Brandicourt, Sanofi’s profile today is unique in the industry. And the company plans to become one of the world’s top three innovative, global and diversified human healthcare companies by 2025.
“By embracing transformative technologies and focusing on our areas of excellence, we will continue to earn the respect and trust of patients and health-care professionals,” Brandicourt says.
Even with societal challenges such as a growing and aging population, wealth disparity, and climate change, digitalization and technological breakthrough are bringing tremendous opportunities.
“In this context, there is a growing expectation that companies deliver not only financial performance, but also that they demonstrate their positive contribution to society,” Brandicourt says.
Sanofi is continuing efforts to transform itself during 2018. The company has acquired two companies, Ablynx and Bioverativ, is planning to divest the Zentica generics unit, and in September announced a plan to refocus two global business units
Sanofi is making the changes to provide greater focus on operations in mature markets and across emerging markets. The company is creating a new Primary Care global business unit that combines the product portfolios of Sanofi’s existing Diabetes and Cardiovascular (DCV) GBU with Established Products, which are currently part of the General Medicines & Emerging Markets (GEM) GBU. The new Primary Care unit will focus exclusively on mature markets.
To help build and lead the new Primary Care business, Sanofi appointed Dieter Weinand as executive VP. Effective November 1, Weinand reports directly to Brandicourt and becomes a member of the executive committee. He will be based in the Bridgewater, N.J., office. Stefan Oelrich, currently head of the DCV GBU, has decided to leave Sanofi and will join Bayer AG as a member of the board of management and head of the Pharmaceuticals division, replacing Weinand effective November 1.
“Dieter is a seasoned professional with significant experience in the pharmaceutical sector, having successfully launched and marketed some of the most innovative medicines in the last few years,” Brandicourt says. “He has a proven track record in change management and helping challenged businesses reach their full potential. As we welcome Dieter into the organization, I would like to thank Stefan for his excellent contributions to Sanofi over the years and wish him all the best in his next endeavor.”
Sanofi is creating a second new global business unit called China & Emerging Markets to be led by Olivier Charmeil, currently head of the GEM GBU. This newly formed business will focus on the unique characteristics and tremendous growth opportunities in emerging markets, particularly in China which is Sanofi’s second largest market after the United States. Charmeil will continue to be a member of the executive committee reporting directly to Brandicourt.
Sanofi expects to launch the new Primary Care and China & Emerging Markets global business units by the beginning of 2019. Sanofi’s other GBUs – Sanofi Genzyme, Sanofi Pasteur and Consumer Healthcare – remain unchanged.
In April 2018, Sanofi began negotiations with global investment company Advent International for Advent to acquire Zentiva, Sanofi’s European generics business, for €1.9 billion.
According to management, the divestiture of European generics – a non-core business – is part of Sanofi’s strategy to simplify and reshape the company.
“Zentiva is a robust business with a highly talented workforce and we believe it has demonstrated its potential for growth,” Brandicourt says. “Following a comprehensive review of strategic options for our generics unit in Europe, we have determined that transferring this business to Advent is the best option to ensure its long-term success.” The transaction was expected to close by the end of 2018.
In January, Sanofi announced plans to acquire Ablynx for €3.9 billion. Ablynx is a biopharmaceutical company engaged in the discovery and development of Nanobodies. The acquisition was completed in June.
“With Ablynx, we continue to advance the strategic transformation of our Research and Development, expanding our late-stage pipeline and strengthening our platform for growth in rare blood disorders,” Brandicourt says. “This acquisition builds on a successful existing partnership. We are also pleased to reaffirm our commitment to Belgium, where we have invested significantly over the years in our state-of-the-art biologics manufacturing facility in Geel. We intend to maintain and support the Ablynx science center in Ghent.”
Management says the acquisition of Ablynx continues Sanofi’s commitment to breakthrough innovation, focused on technologies addressing multiple disease targets with single multi-specific molecules. Nanobodies are a novel class of proprietary next-generation biologicals. Ablynx is at the leading edge of Nanobody technology supporting a deep pipeline of more than 45 proprietary and partnered candidates for a wide range of therapeutic areas such as hematology, inflammation, immuno-oncology and respiratory diseases. Eight Nanobodies have entered clinical development.
Ablynx’s most advanced product in development is caplacizumab (anti-vWF Nanobody), for treating acquired thrombotic thrombocytopenic purpura (aTPP). The product is already filed in the European Union and was submitted in the United States in the first half of this year.
The addition of caplacizumab to Sanofi’s platform bolsters the company’s position in rare blood disorders. The deal complements agreements to acquire Bioverativ and obtain global rights for fitusiran from Alnylam.
Ablynx’s ALX-0171, an inhaled anti-RSV Nanobody currently in Phase IIb, is a potential breakthrough for the symptomatic treatment of RSV infections – for which there is no widely used therapy available – and is very complementary to Sanofi Pasteur’s RSV associated programs.
Company leadership says the addition of Ablynx is anticipated to drive meaningful long-term value for Sanofi’s shareholders by enhancing the pipeline and research capabilities. Including R&D expenses, the acquisition is expected to be neutral to Business EPS in 2018 and 2019.
Sanofi also announced in January the Bioverativ transaction, which was completed in March for $11.6 billion. Management says the acquisition expands Sanofi’s presence in specialty care and strengthens leadership in rare diseases; adds a leader in the growing hemophilia market and provides platform for expansion in other rare blood disorders; drives meaningful shareholder value with ROIC expected to exceed cost of capital within three years; enhances Sanofi’s sustainable revenue and earnings growth; and provides immediate business EPS accretion.
“With Bioverativ, a leader in the growing hemophilia market, Sanofi enhances its presence in specialty care and leadership in rare diseases, in line with its 2020 Roadmap, and creates a platform for growth in other rare blood disorders,” Brandicourt says. “Together, we have a great opportunity to bring innovative medicines to patients worldwide, building on Bioverativ’s success in driving new standards of care with its extended half-life factor replacement therapies. Combined, we will continue to leverage our scientific know-how, disciplined focus and development expertise that best position us to drive value for our shareholders and create breakthrough treatments for patients.”
Bioverativ’s extended half-life therapies, Eloctate [Antihemophilic Factor VIII (Recombinant), Fc Fusion Protein] and Alprolix [Coagulation Factor IX (Recombinant), Fc Fusion Protein] for the treatment of hemophilia A and B, respectively, represented the first major advancements in the hemophilia market in nearly two decades when launched. In 2016, Bioverativ generated $847 million in sales and $41 million in royalties.
Bioverativ markets the two products in the United States, Japan, Canada and Australia, and plans to expand into additional geographies. The therapies are also commercialized in the European Union and other countries under a collaboration agreement.
One of the priorities of Sanofi’s 2020 Roadmap is to “Reshape the Portfolio” and focus on areas where the company currently has, or can effectively build, a leadership position. “The addition of Bioverativ supports this priority by adding to our portfolio a differentiated offering of innovative therapies and providing a platform for growth in rare blood disorders, which will expand our presence in specialty care, further strengthen our leadership position in rare diseases and meet the needs of the patient community,” executives say.
Beyond the two marketed products, Bioverativ’s pipeline includes a program in Phase III testing for cold agglutinin disease, and early-stage research programs and collaborations in hemophilia and other rare blood disorders, including sickle cell disease and beta thalassemia.
Settlement with the SEC
Sanofi reached a civil settlement in September with the U.S. Securities and Exchange Commission that executives say fully resolves the SEC’s investigation into possible violations of the U.S. Foreign Corrupt Practices Act.
The settlement relates to an investigation by the SEC and U.S. Department of Justice (DOJ) of Sanofi activities outside the United States and France, namely in Kazakhstan, Jordan, Lebanon, Bahrain, Kuwait, Qatar, Yemen, Oman, the United Arab Emirates and the Palestinian territory from 2006 to 2015. As part of the settlement, Sanofi neither admits nor denies the company engaged in any wrongdoing.
Under the terms of the settlement, Sanofi agreed to pay $25.2 million and agreed to a two-year period of self-reporting on the effectiveness of the company’s enhanced internal controls and anti-bribery and corruption compliance program. The SEC says Sanofi fully cooperated with the investigation as well as strengthened its compliance actions. The DOJ has also completed a related investigation and has declined to pursue any action.
“Sanofi requires all our employees to act with integrity and to follow the highest standards of conduct,” Brandicourt says. “We have worked diligently to strengthen our compliance program worldwide and we are pleased the DOJ and SEC recognized these efforts and our close cooperation. We will continue to strengthen internal controls, anti-bribery and corruption compliance programs, and our oversight and training of teams worldwide. Conducting our activities in an ethical way is something that our company takes very seriously.”
Financial and product performance
“In 2017, we continued to execute on our strategic goals with the strong launch of Dupixent, the positive pivotal data for cemiplimab and for dupilumab in asthma,” Brandicourt says. “At the same time, we managed the challenges in U.S. diabetes as well as the impact from sevelamer generics and Dengvaxia.”
The company recorded sales of €35.06 billion ($39.62 billion), 3.6 percent more than in 2016. Net income was €8.43 billion ($9.53 billion) compared with €4.71 billion ($5.32 billion) in 2016. Diluted earnings per share were €6.66 ($7.53) compared with €3.63 ($4.10) in 2016. The large increase in net income and earnings per share in 2017 can be attributed to the sale of the Animal Health unit in January 2017. Without the effect of the Animal Health sale, Sanofi’s 2017 net income was €3.91 billion ($4.42 billion) and diluted earnings per share were €2.99 ($3.38).
During the first half of 2018, sales were €16.07 billion ($18.17 billion), 7.2 percent less than in the first half of 2017. Net income totaled €3.16 billion ($3.57 billion), down 9.4 percent compared to first-half 2017. Earnings per share were €2.53 ($2.86), 8.3 percent less than in the same period last year.
Twelve of Sanofi’s products generated at least $500 million in 2017. Leading the way again was the diabetes drug Lantus, which generated €4.62 billion ($5.22 billion), 19.1 percent less than in 2016. In the first six months of 2018, Lantus sales came in at €1.8 billion ($2.04 billion), 25.7 percent less than in the same period of 2017.
The antithrombotic Lovenox was Sanofi’s No. 2 product in 2017, with sales of €1.58 billion ($1.78 billion), 3.7 percent less than in 2016. For the first half of 2018, sales totaled €768 million ($868 million), 6 percent less than in the first half of last year.
The multiple sclerosis drug Aubagio generated €1.57 billion ($1.77 billion) in 2017, 21 percent more than in 2016. Sales in the first half of 2018 amounted to €775 million ($876 million), 2.6 percent less than in the same period of 2017.
The antithrombotic Plavix was Sanofi’s No. 4 product, with sales of €1.47 billion ($1.66 billion), 4.7 percent less than in 2016. First-half 2018 sales reached €761 million ($860 million), down 0.4 percent versus first-half 2017.
The diabetes drug Toujeo was the fifth best selling drug for the company in 2017, growing 25.7 percent to €816 million ($922 million). Sales in first-half 2018 were €414 million ($468 million), an increase of 2.7 percent compared to the first half of 2017.
The kidney dialysis drugs Renagel and Renvela ranked No. 6 for Sanofi in 2017 sales, posting a combined €802 million ($906 million), 13 percent less than in the previous year. The product line generated first-half 2018 sales of €201 million ($227 million), 59.3 percent less than during same-time 2017.
The Pompe disease treatments Myozyme and Lumizyme generated combined 2017 sales of €789 million ($892 million), an increase of 8.8 percent compared with the 2016 performance. First-half 2018 sales amounted to €405 million ($458 million), 2.8 percent more than in first-half 2017.
Cerezyme, for the treatment of Gaucher disease, was No. 8 for Sanofi in 2017 with sales of €730 million ($825 million), 2.4 percent less than in 2016. Sales during the first half of 2018 were €356 million ($402 million), 3.8 percent less than in the first six months of 2017.
The Fabry disease drug Fabrazyme placed No. 9 in 2017 sales with €722 million ($816 million), 7.1 percent more than in 2016. During the first six months of 2018, sales fell to €358 million ($405 million), 2.5 percent less than in the first half of 2017.
The angiotensin-II receptor antagonist Avapro/Aprovel was Sanofi’s 10th best selling product in 2017, generating €691 million ($781 million), 1.5 percent more than in 2016. First-half 2018 sales were €343 million ($388 million), down 10.2 percent compared to the same six months of 2017.
Lemtrada, for multiple sclerosis, generated 2017 sales of €474 million ($536 million), 11.5 percent more than the previous year. Sales in the first half of 2018 were €207 million ($234 million) 16.9 percent less than the same period last year.
The anticonvulsant Depakine produced sales of €443 million ($501 million), 6.5 percent more than in 2016. First-half 2018 sales were €230 million ($260 million), 2.7 percent more than in first-half 2017.
A new head of R&D and pipeline progress
Sanofi tapped a new head of Global R&D in 2018 with the retirement of Elias Zerhouni. The company named John Reed, M.D., Ph.D., who took over on July 1.
Dr. Zerhouni joined Sanofi in 2009 as scientific advisor to the CEO and was appointed to Global R&D head in January 2011.
Dr. Reed reports directly to Brandicourt and is a member of the executive committee. He joined Sanofi on April 30, 2018, to ensure a smooth and effective transition period.
“John is an accomplished and widely recognized physician-scientist with a brilliant academic track record,” Brandicourt says. “He is experienced in driving R&D productivity, building high-performing teams and integrating biotech companies to provide new technology platforms.”
For the past five years Dr. Reed served as the global head of Roche Pharma Research & Early Development (pRED), responsible for directing research and early development activities through Phase IIb proof-of-concept across all therapeutic areas, including oncology, immunology, rare diseases, neuroscience, ophthalmology and infectious diseases. He was also a member of Roche’s corporate executive committee, reporting to the CEO.
Dr. Reed holds a B.A. in chemistry from the University of Virginia, Charlottesville, and a M.D. and Ph.D. from the University of Pennsylvania, School of Medicine, where he began his academic career at the University in 1988, following a post-doctoral fellowship in molecular biology at the Wistar Institute and a residency in pathology & laboratory medicine at Hospital of University Pennsylvania. He then joined the Burnham Institute in 1992, one of the best-known biomedical research institutes in the United States, where he held multiple positions of increasing responsibility such as program director of the NCI-designated Cancer Center, scientific director, and director of the Cancer Center. In 2002 he was appointed president and CEO of the Sanford-Burnham Medical Research Institute.
In September, Sanofi received approval in the European Union for the company’s first product from the Ablynx acquisition, Cablivi (caplacizumab), for adults with acquired thrombotic thrombocytopenic purpura (aTTP).
Cablivi is the first therapeutic approved for the treatment of aTTP, a rare blood-clotting disorder. Additionally, FDA will conduct a priority review of caplacizumab with a target action date of Feb. 6, 2019.
The European Commission granted marketing authorization for Cablivi as the first treatment for aTTP outside of the current standard-of-care of daily plasma exchange (PEX) and immunosuppression. Even under the standard of care, episodes of aTTP are still associated with a mortality rate of up to 20 percent, with most deaths occurring within 30 days of diagnosis.
Cablivi is the company’s first Nanobody-based medicine to receive approval and the first newly approved product part of Sanofi Genzyme’s Rare Blood Disorders franchise.
“The approval of Cablivi provides new hope for people diagnosed with aTTP, who to date have faced a very difficult disease with limited treatment options,” says Bill Sibold, executive VP and head of Sanofi Genzyme. “This approval is the next step towards our goal of becoming the leading rare blood disorders company in the industry. We are excited about the opportunities to continue to expand our rare blood disorders business and to help many people with very serious diseases.”
The approval of Cablivi in the EU is based on the Phase II TITAN and Phase III HERCULES studies in 220 adult patients with aTTP. The efficacy and safety of caplacizumab in addition to standard-of-care treatment, daily PEX, and immunosuppression were demonstrated in these studies.
In the HERCULES study, treatment with caplacizumab in addition to standard-of-care resulted in a significantly shorter time to platelet count response (p<0.01), the study’s primary endpoint; a significant reduction in aTTP-related death, recurrence of aTTP, or at least one major thromboembolic event during study drug treatment (p<0.0001); and a significantly lower number of aTTP recurrences in the overall study period (p<0.001). Importantly, treatment with caplacizumab resulted in a clinically meaningful reduction in the use of PEX and length of stay in the intensive care unit (ICU) and the hospital, compared to the placebo group.
FDA has accepted for priority review the biologics license application for caplacizumab for the treatment of patients 18 years of age and older experiencing an episode of aTTP.
In September, Sanofi and development partner Regeneron presented positive Phase III results for Dupixent (dupilumab) that show significant improvement on multiple measures of disease severity in adolescents with moderate-to-severe atopic dermatitis. These data were presented at the 27th European Academy of Dermatology and Venereology Congress in Paris.
Dupixent is approved in the United States to treat adults with moderate-to-severe atopic dermatitis whose disease is not adequately controlled with topical prescription therapies or when those therapies are not advisable.
Dupixent is approved in the European Union for use in adults with moderate-to-severe atopic dermatitis (AD) who are candidates for systemic therapy. Dupixent is also approved for certain patients with moderate-to-severe atopic dermatitis in a number of other countries, including Canada and Japan. More than 50,000 adult patients with atopic dermatitis have been prescribed Dupixent.
The data demonstrated that Dupixent monotherapy showed a significant improvement in signs and symptoms of atopic dermatitis and certain quality of life measures in adolescent patients (12-17 years) with moderate-to-severe atopic dermatitis, whose disease was inadequately controlled with topical therapies or for whom topical treatment was medically inadvisable.
“Limited treatment options leave adolescents with uncontrolled moderate-to-severe atopic dermatitis to cope with intense, unrelenting itch and skin lesions,” says Amy S. Paller, M.D., director of the Northwestern University Skin Disease Research Center and principal investigator of the trial. “The results we are presenting today show the potential for Dupixent in adolescents to not only help clear the skin and reduce itching, but also improve certain aspects of quality of life in adolescents who may be dealing with these unbearable symptoms.”
The late-breaking presentation at EADV showed the co-primary endpoint outside of the United States was 75 percent improvement in Eczema Area and Severity Index (EASI-75) at 16 weeks. In the United States, the primary endpoint was the proportion of patients achieving Investigator’s Global Assessment (IGA) score of 0 (clear) or 1 (almost clear).
In 41.5 percent of patients who received Dupixent every two weeks and 38 percent of patients who received Dupixent every four weeks, there was seen 75 percent or greater skin improvement (EASI-75) compared to 8 percent with placebo (p less than 0.001).
The 24% of patients who received weight-based dosing of Dupixent every two weeks (200 mg or 300 mg) and 18 percent of patients who received a fixed dose of Dupixent every four weeks (300 mg) achieved the primary endpoint – clear or almost-clear skin (IGA; score of 0 or 1) – compared with 2 percent with placebo (p less than 0.001).
There was a 66 percent improvement in the Dupixent every two weeks group and 65 percent improvement in the Dupixent every four weeks group in average percent change from baseline in EASI score compared with a 24 percent improvement in the placebo group (p less than 0.001).
There was a 48 percent improvement in the Dupixent every two weeks group and 45.5 percent improvement in the Dupixent every four weeks group in average percent change from baseline in the pruritus numerical rating scale (NRS) compared with a 19 percent improvement in the placebo group (p less than 0.001).
Also at 16 weeks, additional secondary endpoints were: the majority of patients who received Dupixent (61 percent of patients treated every two weeks and 55 percent of patients treated every four weeks) achieved at least a 50 percent improvement in EASI (EASI-50) compared to 13 percent with placebo (p less than 0.001). There was a 52 percent improvement in the Dupixent every two weeks group and 47.5 percent improvement in the Dupixent every four weeks group compared to an 18 percent improvement in the placebo group in mean percent change from baseline in SCORing Atopic Dermatitis (SCORAD), a combined measure of area and severity of atopic dermatitis on the skin as well as patient-reported symptoms of itch and sleeplessness (p less than 0.001).
Forty-nine percent of patients who received Dupixent every two weeks and 39 percent of patients who received Dupixent every four weeks achieved at least a 3-point improvement on the peak pruritus numerical rating scale (pp-NRS) compared to 9% with placebo (p less than 0.001). At the beginning of the trial, patients reported a mean itch score of 7.6 on the 10-point pp-NRS scale.
Patients who received Dupixent every two weeks or every four weeks significantly improved quality of life measured by the Children’s Dermatology Life Quality Index (CDLQI) and patient-reported symptoms measured by the Patient-Oriented Eczema Measure (POEM) compared with placebo (p less than 0.001).
Additionally in the 16-week trial, 59 percent of patients on placebo used rescue medications compared with 21 percent of patients receiving Dupixent every two weeks and 32.5 percent of patients receiving Dupixent every four weeks.
The overall rate of adverse events was 72 percent for Dupixent every two weeks, 64 percent for Dupixent every four weeks, and 69 percent for placebo.
Sanofi and Regeneron are also studying dupilumab in a broad range of clinical development programs for diseases driven by Type 2 inflammation, including asthma (Phase III), pediatric (6-11 years) atopic dermatitis (Phase III), nasal polyps (Phase III), eosinophilic esophagitis (Phase III) and grass allergy (Phase II). Future trials are planned for chronic obstructive pulmonary disease and food allergy (including peanut). These potential uses are investigational and the safety and efficacy have not been evaluated by any regulatory authority. Dupilumab is being jointly developed by Sanofi and Regeneron under a global collaboration agreement.
Also in September for another drug part of a Sanofi/Regeneron collaboration, Sanofi announced that FDA would review the supplemental biologics license application for Praluent (alirocumab) Injection as potential treatment to reduce major adverse cardiovascular events. FDA also recently approved a Praluent label update for some patients currently requiring LDL apheresis therapy.
The sBLA outlines a proposed update to the prescribing information to include the effect of Praluent in reducing the overall risk of major adverse cardiovascular events (MACE). MACE is an umbrella term that includes heart attack, ischemic stroke, death from coronary heart disease, and unstable angina requiring hospitalization. The FDA set a Prescription Drug User Fee Act (PDUFA) action date of April 28, 2019.
The sBLA is supported by data from ODYSSEY OUTCOMES, a Phase III cardiovascular outcomes trial that assessed the effect of Praluent in 18,924 patients who had an acute coronary syndrome (ACS), such as a heart attack, between 1-12 months (median 2.6 months) before enrolling in the trial. Results of the ODYSSEY OUTCOMES trial were presented at the American College of Cardiology’s 67th Annual Scientific Session & Expo in March 2018.
The effect of Praluent on cardiovascular morbidity and mortality, including MACE, is currently being reviewed and has not been fully evaluated by any regulatory authority.
In addition, FDA approved an update to the Praluent prescribing information to include clinical information regarding the medication’s use in patients with heterozygous familial hypercholesterolemia (HeFH) who require additional lowering of LDL-C (low-density lipoprotein cholesterol) along with diet and maximally-tolerated statin therapy and who are undergoing apheresis treatment.
Apheresis is a procedure where LDL-C is removed from the blood, in a process similar to kidney dialysis. The recommended dose of Praluent in patients undergoing LDL apheresis is 150 mg once every 2 weeks. Praluent can be administered without regard to timing of apheresis.
The update is supported by data from the pivotal Phase III ODYSSEY ESCAPE trial of 62 patients with HeFH, an inherited form of high cholesterol, whose cholesterol levels required chronic, weekly or bi-weekly apheresis therapy.
Praluent is approved in more than 60 countries including the United States, Japan, Canada, Switzerland, Mexico and Brazil, as well as the European Union. In the United States, Praluent is approved for use as an adjunct to diet and maximally tolerated statin therapy for treating adults with HeFH or clinical atherosclerotic cardiovascular disease (ASCVD) who require additional lowering of LDL-C.