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Sanofi: Getting Back Into Growth

Written by: | chris.truelove@medadnews.com | Dated: Monday, October 12th, 2015

54, Rue La Boetie
75008 Paris, France
Telephone: +33 (0)1 53 77 40 00
Website: sanofi.com

 

Best-Selling Products

Product 2014 Sales 2013 Sales
Lantus $8,436    $7,599
Plavix/Iscover $2,476    $2,470
Lovenox $2,259    $2,264
Avapro/Aprovel, CoAprovel $967     $1,173
 Cerezyme  $951     $915
Renagel, Renvela $910    $997
Myozyme, Lumizyme $721    $665
Fabrazyme  $612     $509
Aubagio    $576    $221
Depakine $525    $539

All sales are in millions of dollars and were translated using the Federal Reserve Board’s average rate of exchange in 2014: 1.3297.

 

Financial Performance

  2014 2013
Revenue $44,904    $43,815
Net income $5,837    $4,941
Diluted EPS $4.39    $3.68
R&D expense $6,414    $6,343
  1H 15 1H 14
Revenue $24,185    $21,165
Net income $3,170    $2,556
Diluted EPS $2.34    $1.86
R&D expense $3,310    $3,094

All sales are in millions of dollars except EPS and were translated using the Federal Reserve Board’s average rate of exchange in 2014: €1.3297.

 

 

For Sanofi, 2014 was a year focused on delivering growth and strengthening innovation. The company returned to top-line growth, with mid-single-digit sales growth and solid performance across growth platforms; important milestones achieved for late-stage R&D projects; and multiple product launches under way or imminent.

In 2014, the company achieved sales of   €33.77 billion ($44.9 billion), up 2.5 percent on a reported basis and 4.5 percent at constant exchange rates. Net income was €4.39 billion ($5.84 billion), up 16.4 percent as reported from 2013. Diluted earnings per share were €3.30 ($4.39), 18.9 percent more than in 2013.

Sanofi kicked off 2015 with big news with the February announcement of a new CEO, Olivier Brandicourt, who officially took over in April. Brandicourt was the CEO of Bayer HealthCare AG.

For first-half 2015, Sanofi reported sales of €18.19 billion ($24.19 billion), 14.3 percent more than in the first half of 2014. Net income was €2.38 billion ($3.17 billion), 24 percent more than in the same period last year. Diluted earnings per share were €1.76 ($2.34), 25.7 percent more than in first-half 2014.

“In the second quarter, Sanofi delivered solid growth on both the top and bottom lines that was consistent with our expectations,” Brandicourt says. “We continue to execute on multiple product launches and are excited about the recent approval of Praluent. We are also investing in our commercial infrastructure, biologic capabilities and R&D programs including in immuno-oncology.”

In July 2015, the company announced a new structure to be initiated in January 2016 that will “simplify and focus Sanofi to optimize future growth.” The change creates five global business units: General Medicine and Emerging Markets, Specialty Care, Diabetes and Cardiovascular, Sanofi Pasteur, and Merial.

“The new organization simplifies and focuses Sanofi to optimize growth,” Brandicourt says. “This is a necessary step for ensuring that Sanofi’s new medicines and vaccines continue to build on our heritage of providing innovative healthcare therapies.”

The General Medicines & Emerging Markets Global Business Unit will be led by Peter Guenter and will consist of Sanofi’s Established Products, Generics, Consumer Healthcare, and all pharma businesses in Emerging Markets.

The Specialty Care Global Business Unit, to be called Sanofi Genzyme, will be led by David Meeker and will consist of Sanofi’s medicines in Rare Diseases, Multiple Sclerosis, Oncology and immunology, including the two investigational biologics, sarilumab and dupilumab.

The Diabetes & Cardiovascular Global Business Unit will be led by Pascale Witz and will consist of Sanofi’s Diabetes Care medicines as well as Cardiovascular, which includes Praluent (alirocumab), which is currently under review by the U.S. Food and Drug Administration and the European Medicines Agency (EMA).
Sanofi Pasteur and Merial are both Global Business Units and will continue to manage their current portfolios of vaccines and animal health products. Olivier Charmeil will continue to lead Sanofi Pasteur and Carsten Hellmann will continue to lead Merial.

Similar to Research and Development and Industrial Affairs, all functions will be globalized to better serve the Business Units.

Product performance

Sanofi’s top-selling product in 2014 remained the diabetes drug Lantus, which achieved sales of €6.34 billion ($8.44 billion), 11 percent more than 2013. The increase was due to good performances in the United States, where Lantus SOLOStar accounted for 62 percent of sales; in Emerging Markets, especially China; the Africa/Middle East region; and Eastern Europe.

During the first half of 2015, Lantus sales were €3.29 billion ($4.38 billion), 9.6 percent more than in first-half 2014 as reported but actually down 5.4 percent at constant exchange rates. In the United States, sales were down 14.3 percent at constant exchange rates to €2.09 billion ($2.78 billion), mainly on negative pricing effects; these effects were expected, and resulted from increased rebates granted in order to maintain favorable formulary positions with key payers. The product performed well in Emerging Markets, especially in Latin America, the Middle East, and China.

A biosimilar of Lantus was launched in some small Eastern European markets in July 2015.

The second best-selling product for the company during 2014 was the blood thinner Plavix, which had sales of €1.86 billion ($2.48 billion), 12.7 percent more than in 2013 and an increase of 4.7 percent in constant exchange rates. Growth was driven by Japan and Emerging Markets, especially China. However, these positive effects were mitigated by generic competition in Western Europe.

In the first half of 2015, Plavix sales were €1.03 billion ($1.37 billion), 12.7 percent more than in the first half of 2014 and +2.1 percent at constant exchange rates. Growth again was driven by Japan and Emerging Markets, especially China, and there was generic competition in Western Europe. Numerous generic versions of Plavix were introduced in Japan at the end of June 2015.

No. 3 in 2014 sales was the blood thinner Lovenox, at €1.7 billion ($2.26 billion), about the same as in 2014 but with net growth of 2.1 percent at constant exchange rates. Lower net sales in the United States due to generic competition were offset by good performances in Western Europe and in Emerging Markets, especially China and Latin America. The total for the first six months of 2015 reached €871 million ($1.16 billion), up 0.4 percent at constant exchange rates. Sanofi launched a generic version of Lovenox in 2012.

The fourth best-selling drug for Sanofi in 2014 was the Avapro/Aprovel hypertension franchise, which recorded sales of €727 million ($967 million), 17.6 percent less than in 2013 and 16.6 percent less at CER. This was mainly due to generic competition in Western Europe. In the first six months of 2015, sales of the product grew to €425 million ($565 million), 14.2 percent more than in the same period last year and about the same at constant exchange rates. Generic competition eroded net sales in Western Europe but the effect was offset by growth in Emerging Markets, mainly in Latin America and China.

The Gaucher disease drug Cerezyme was Sanofi’s fifth best-selling drug in 2014. Cerezyme achieves sales of €715 million ($951 million), 3.9 percent more as reported and 8.3 percent more at constant exchange rates versus 2013, driven by Western Europe and Emerging Markets. During first-half 2015, Cerezyme sales were €388 million ($516 million) and 5.5 percent more at constant exchange rates. Strong growth in Emerging Markets more than compensated for lower sales in the United States, following the launch of Cerdelga. As the only first-line oral therapy for Gaucher disease type 1 patients, Cerdelga recorded net sales of €26 million ($35 million), of which €25 million ($33 million) was generated in the United States.

Renagel and Renvela was Sanofi’s sixth best-selling product line in 2014. Combined sales of the hyperphosphatemia drugs were €684 million ($910 million), 8.8 percent less than in 2013 and 8.7 less at constant exchange rates. This result was due to lower sales in the United States reflecting the effects of an agreement in which Sanofi granted Impax permission to sell a limited number of authorizes generics of Renvela starting in April 2014.

Half-year 2015 sales of Renagel and Renvela were €457 million ($608 million), 47.9 percent more as reported and 26.5 percent more at constant exchange rates than in first-half 2014. This was due to a strong performance in the United States reflecting reduced competition from Impax. However, generics are now being sold in some European countries, and the company still expects generics to be approved in the United States.

The Pompe disease drugs Myozyme and Lumizyme were the seventh best-selling products for Sanofi in 2014. Sales were €542 million ($721 million), an increase of 8.4 percent as reported and 9.8 percent at constant exchange rates, reflecting the product’s performance in Emerging Markets. First-half 2015 sales were €321 million ($427 million), 26.4 percent more as reported and 16.5 percent more at constant exchange rates compared with first-half 2014. This lift was mainly due to an increase in patients in the U.S. and Emerging Markets.

The Fabry disease drug Fabrazyme was the eighth best-selling drug in 2014 at €460 million ($612 million), an increase of 20.1 percent as reported and 23 percent at constant exchange rates. Sales were up in the United States, Emerging Markets, and Western Europe. First-half 2015 sales were €287 million ($382 million), an increase from first-half 2014 of 29.9 percent as reported and 14.9 percent at constant exchange rates.

The multiple sclerosis drug Aubagio ranked No. 9 in 2014 sales for the company, recording €433 million ($576 million) compared with €166 million ($221 million) in 2013. The majority of sales were in the United States, where the product was first launched in October 2012. First-half sales 2015 sales of Aubagio continued to surge, to €374 million ($497 million), compared with €175 million ($233 million) in first-half 2014.

Sanofi’s 10th best-selling product in 2014 was the epilepsy drug Depakine, recording sales of €395 million ($525 million), a decrease of 2.5 percent as reported but growth of 0.5 percent at constant exchange rates. First-half 2015 sales were €212 million ($282 million), 11 percent more than as reported for first-half 2014 and 4.7 percent more at constant exchange rates.

Sanofi’s vaccines segment reported 2014 sales of €3.97 billion ($5.28 billion), up 6.9 percent as reported and 7.2 percent at constant exchange rates. Influenza vaccines generated €1.18 billion ($1.57 billion), 26.8 percent more than in 2013 as reported and 25.2 percent more at a constant exchange rate basis. Polio/Pertussis/Hib vaccines grew to €1.15 billion ($1.53 billion), about the same as in 2013 on a reported basis and 1.9 percent more at a constant exchange rate. During the first half of 2015, vaccines sales were €1.58 billion ($2.11 billion), an increase of 17.7 percent on a reported basis and 2.5 percent at CER.

The company’s Consumer Health Care business reported 2014 sales of €3.34 billion ($4.44 billion), up 11.1 percent on a reported basis and 16.5 percent at constant exchange rates. First-half 2015 sales in this segment were €1.87 billion ($2.49 billion), up 9.9 percent as reported and 3.4 percent at a constant exchange rate.

The Generics business reported 2014 sales of €1.81 billion ($2.4 billion), up 11.1 percent as reported and 16.2 percent at constant exchange rates. In first-half 2015, sales were €998 million ($1.33 billion), 12.5 percent more than same-period 20134 as reported and 9.7 percent at constant exchange rates.

The Animal Health business posted 2014 sales of €2.08 billion ($2.76 billion), up 4.6 percent on a reported basis and 6.7 percent at constant exchange rates. Sales in the first six months of 2015 were €1.35 billion ($1.79 billion), up 28 percent from the same period last year on a reported basis and 13.9 percent at constant exchange rates.

Pipeline progress

The company achieved several of its pipeline goals in 2014 and during the first six months of 2015.

Significant achievements in the latter half of 2014 include the FDA granting in November breakthrough therapy designation for dupilumab, an investigational monoclonal antibody that blocks IL-4 and IL-13 – two cytokines required for the Th2 immune response – for the treatment of adults with moderate-to-severe atopic dermatitis that are not adequately controlled with topical prescription therapy and/or for whom these treatments are not appropriate.

Also in November 2014, FDA approved Lemtrada (alemtuzumab) for treating patients with relapsing forms of multiple sclerosis who have had an inadequate response to two or more drugs.

During December 2014, FDA approved Fluzone Intradermal Quadrivalent, which provides protection against four types of flu virus.

In February 2015, Sanofi launched Afrezza, a new rapid-acting inhaled insulin therapy, in the United States. The company has a worldwide exclusive licensing agreement with MannKind Corp. for the product.

In January 2015, the EMA accepted for review the marketing authorization application for Praluent in collaboration with Regeneron Pharmaceuticals Inc. Also in January, the U.S. Food and Drug Administration accepted for priority review the biologics license application for Praluent, an investigational monoclonal antibody targeting PCSK9 that is intended for the treatment of patients with hypercholesterolemia. Praluent was approved in late July 2015 by FDA.

Additional pipeline achievements in January were the rolling submission for Dengue vaccine, initiated in several endemic countries in Asia; the EMA’s acceptance for review of the marketing authorization application for the pediatric hexavalent vaccine PR5i; and the European Commission’s approval of Cerdelga (eliglustat), an oral treatment for certain adults living with Gaucher disease type 1.

In March 2015, Sanofi launched Toujeo, a next-generation basal insulin, in the U.S. market. Also in March, Sanofi announced the first results from the ELIXA Phase IIIb study evaluating the cardiovascular safety of Lyxumia (lixisenatide) versus placebo in a high-risk population of adults with type 2 diabetes. The study showed that lixisenatide was not inferior to placebo in terms of cardiovascular safety, but did not demonstrate its superiority. The company submitted a new drug application to FDA for lixisenatide in late July 2015.

Additionally in March 2015, Sanofi and Regeneron announced the publication of 18-month (78-week) results from the ODYSSEY LONG TERM Phase III trial of Praluent in 2,341 high-risk patients with hypercholesterolemia. Treatment with Praluent 150 mg every two weeks reduced low-density lipoprotein cholesterol (LDL-C or “bad” cholesterol) by an additional 62% at week 24 when compared to placebo. Lowering of LDL-C, which is the primary efficacy endpoint of the study, was also maintained consistently over 78 weeks.

During March 2015, the FDA licensed Quadracel (vaccine against diphtheria, tetanus, pertussis and polio) for children ages 4 to 6 years old.
In April 2015, the FDA granted fast track designation for the development of GZ/SAR402671, a new investigational oral substrate reduction therapy for the treatment of Fabry disease that is undergoing Phase IIa of development.

In May 2015, Sanofi and Regeneron announced additional positive results from a pivotal Phase IIb study of dupilumab in adult patients with moderate-to-severe asthma who are uncontrolled despite treatment with inhaled corticosteroids and long-acting beta agonists. The study achieved its primary endpoint of improving lung function in asthma patients with high blood eosinophils counts. A Phase III study was launched at the end of April 2015.

Also during May 2015, Sanofi and Regeneron announced positive preliminary results from the SARIL-RATARGET Phase III study of sarilumab, an investigational, fully human IL6 receptor antibody, in the treatment of rheumatoid arthritis patients who were inadequate responders to or intolerant of TNF-alpha inhibitors. The study met its co-primary efficacy endpoints of a greater improvement in signs and symptoms of rheumatoid arthritis at 24 weeks, and physical function at 12 weeks, compared to placebo.

In June 2015, Sanofi announced positive results from the EDITION JP 1 and EDITION JP 2 Phase III extension studies in Japanese patients with uncontrolled diabetes. These results demonstrated similar blood sugar control with Toujeo as compared to Lantus, but with fewer people experiencing night-time low blood sugar during the 12 months of the study.

Also in June 2015, FDA granted breakthrough therapy designation to olipudase alfa. This enzyme replacement therapy is being investigated by Genzyme for the treatment of patients with Niemann-Pick disease Type B.

R&D collaborations

In February 2015, Sanofi announced a research collaboration and licensing agreement with the Dutch biotechnology company Lead Pharma for the discovery, development and commercialization of small-molecule therapies directed against “ROR gamma t” nuclear hormone receptors to treat a broad range of autoimmune disorders including rheumatoid arthritis, psoriasis and inflammatory bowel disease.

Also in February 2015, Genzyme and Voyager Therapeutics, a gene therapy company, entered into a strategic collaboration agreement for the discovery, development and commercialization of new adeno-associated virus (AAV) gene therapies to treat serious disorders of the central nervous system. The collaboration covers programs targeting serious and debilitating conditions such as Parkinson’s disease, Friedreich’s ataxia and Huntington’s disease.

In May 2015, Sanofi signed a pact with Retrophin Inc. with a view to acquiring a Rare Pediatric Disease Priority Review Voucher (Pediatric PRV) for a total consideration of $245 million. The transaction was completed in early July 2015. This PRV enables the review period for a new drug application to FDA to be shortened from 10 months to six months.

In a more unusual collaboration, in August 2015, Sanofi announced an agreement with Google Life Sciences to work on new technology and tools for diabetes. The collaboration will pair Sanofi’s leadership in diabetes treatments and devices with Google’s expertise in analytics, miniaturized electronics and low power chip design. The companies will explore how to improve diabetes care by developing new tools that bring together many of the previously siloed pieces of diabetes management and enable new kinds of interventions. This includes health indicators such as blood glucose and hemoglobin A1c levels, patient-reported information, medication regimens and sensor devices.

“As a global leader in diabetes care, we have both an obligation and a commitment to provide integrated solutions for people living with diabetes,” Brandicourt says. “This initiative combines Sanofi’s strength and knowledge in diabetes with Google’s leadership in technology and analytics to create a first-of-its-kind initiative with the potential to transform diabetes care.”

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