Sanofi 3Q05 - Mixed Quarter for Diabetes - Lantus Wins, Acomplia - ?
Sanofi reported its 3Q earnings Monday - we say the quarter was mixed because Sanofi was not its usual completely over the top upbeat self over Acomplia, so even though (even though!) Lantus sales are steamrolling, we suspect they'll be getting an approvable letter on Acomplia. Not that an approvable letter, of course, is anything devastating in this safety day and age but it's not as great as say, getting approved for every indication under the sun, which is how we've sometimes felt they've positioned the opportunity for this endocannibanoid receptor!
Lantus sales rose 40% in the US and it's absolute growth is increasing even in Europe, where Levemir is now launched and seems to be taking off very nicely. Sanofi actually termed penetration of Levemir "relatively modest," which we must say seems a bit of an understatement - check out the slope on that curve, low base from which it may have come notwithstanding!
So on Acomplia, Sanofi said that Feb 06 was the action date. We DO believe they won't be going to panel in 2005, anyway - they would have to have heard by now (FDA has to give 60 days notice). So they aren't going to panel in 2005, which is a negative from our perspective, given all they've said.
Is it possible they will just get an approval without a panel? Not even close, in this regulatory environment, and more to the point, with its safety profile. We think Acomplia will do very well, by the way, so don't take this as a big-time negative -- just, it's not time to say there's big-time positive info on the drug yet.
For its part, management actually said NOTHING (nothing!) on its own about the drug, which we thought was curious since we're sure they knew Acomplia status was probably the first question they got (it was). Then, management truly seemed to sort of fall all over itself emphasizing that it "continues to have excellent dialogue with the agency, as from the beginning ..." .... " ... permanent dialogue, they give questions, we give answers...." As of Monday, they had no notification of a panel, although they noted "maybe January" and said, smartly, that it was relatively (or, absolutely) useless to try to speculate about this. BUT ... but they did confirm that everything is going exactly to schedule and they are, quote unquote, totally confident that Acomplia will make it to market.
Well, yes, we believe it will definitely make it to market too! The key question isn't approval vs disapproval - the key questions are what indication with what label in what time period, with what cautionary language. We continue to be cautious about CNS side effects (we would see psychiatric testing requirements as a serious downer vs expectations), especially since they're shooting for the moon with this one as one of our favorite thought leaders says. And indeed, why not - God knows we need loads of help with all their indications.
Someone asked today why we were so negative on Acomplia - I don't see it as negative per se, at all - we do just feel strongly this drug won't be rushed through.
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