Sanofi has had a shaky start to 2018 because of pressure on its diabetes franchise, and doesn’t expect a recovery until the latter half of the year.
The French drug maker – which is in the middle of a restructuring exercise aimed at trimming costs and bulking up its pipeline – said it is anticipating a “new period of growth” in the second half of 2018, but shares went on the slide in response to the announcement this morning.
As in earlier quarters, the main damage has come from diabetes blockbuster Lantus (insulin glargine), which saw sales decline 18% to €911m ($1.1bn) in the first quarter having reached a peak of almost $8.5bn in 2014.
Sanofi has been trying to protect the franchise with long-acting follow-up Toujeo but while this made gains – up 14% to €197m – it wasn’t able to do more than offset a 10% slide in diabetes sales overall.
The loss of patent protection for kidney disease drug Renvela/Renagel (sevelamer) also took its toll, according to chief executive Olivier Brandicourt, the architect of the turnaround plan at Sanofi, who said that the last few months have included the pipeline-building acquisitions of Bioverativ and Ablynx and the sale of its Zentiva generics business to a private equity group.
Overall, sales for the quarter were down nearly 9% to just under €8bn, with cancer and cardiovascular drugs and vaccines also underperforming, the latter because of the safety problems with dengue vaccine Dengvaxia and supply issues for paediatric vaccines in China. Revenues were however fairly flat if exchange rate fluctuations were taken into account, and a bright spot in the results came from rare disease unit Genzyme – which reported a 16% sales hike.
One worrying figure is the sales tally for Regeneron-partnered atopic dermatitis drug Dupixent (dupilumab) which brought in €107m, a decline on the €118m reported in the fourth quarter of 2018.
Sanofi insists that underlying demand for the much-touted new drug remains strong in the US – which accounts for the bulk of sales – but was hit by “trade inventory reduction as well as usual higher contribution to patient assistance programmes in the beginning of the year”.
The net effect of that was a €30m reduction, it says. Nevertheless, anything that holds back the growth of Dupixent will be seen as a negative as the atopic dermatitis category has a number of new drugs coming through late-stage development that could step up competition.
Brandicourt said that overall the company’s performance and expense management “allowed us to manage the impact of the losses of exclusivity for Lantus and sevelamer in the US”.
“Furthermore, with the consolidation of Bioverativ and the acquisition of Ablynx, we have established the foundation for a global rare blood disorder franchise which will further enhance our leadership in specialty care,” he added.