Sanofi (SAN) won U.S. backing to sell the multiple sclerosis pill Aubagio, enabling the drugmaker to enter a $12 billion industry, even as analysts said the medicine may be overshadowed by more effective products.
The Food and Drug Administration approved the once-a-day medicine for relapsing forms of the debilitating disease, the agency said yesterday in a statement. The treatment, also known by the scientific name of teriflunomide, is for patients in the initial phases of the disease, Paris-based Sanofi said.
Sales may be limited because the drug isn’t as effective as Novartis AG’s (NOVN) Gilenya, the first MS pill approved in Europe, or Tysabri from Elan Corp. and Biogen Idec Inc. (BIIB), Alistair Campbell, an analyst at Berenberg Bank, wrote in a report today. Biogen’s oral drug BG-12 also may win U.S. approval by the end of the year, he said.
Aubagio “has clear limitations,” Campbell wrote. “We doubt the drug will seriously affect Gilenya or Tysabri, where prescriptions are largely driven by efficacy.”
The treatment may garner annual sales of $330 million in 2016, according to the average of four analysts’ estimates compiled by Bloomberg.
Sanofi shares slipped 0.6 percent to 66.91 euros in Paris. The stock has returned 24 percent this year including reinvested dividends, compared with a 14 percent return for the Bloomberg Europe Pharmaceutical Index.
The treatment will be an important option for many MS patients, Genzyme executives said today in a telephone interview.
Aubagio’s safety is “very well characterized,” and the medicine “is in a different place, targeting a different patient population” from Gilenya, said Michael Panzara, Genzyme’s therapeutic area head for multiple sclerosis and immune diseases. Instead, Gilenya has “an evolving safety profile, which we continue to learn about every day,” he said.
U.S. and European regulators this year placed new safety precautions on the use of the Novartis product, following a review that was triggered by the deaths of 15 patients.
Chief Executive Officer Chris Viehbacher has been building Sanofi’s multiple sclerosis business since last year’s $20.1 billion purchase of U.S. biotechnology company Genzyme Corp., from which it gained another experimental MS medicine, Lemtrada. Sanofi needs new drugs such as Aubagio and Lemtrada to help offset revenue losses from generic competition to best-sellers including the blood-thinner Plavix.
“This approval is a huge milestone for Genzyme,” Bill Sibold, head of Genzyme’s MS business, said in the interview.
The FDA refused to accept Sanofi’s application to review Lemtrada and the company will resubmit the request in a new format, Sanofi said Aug. 27.
Multiple sclerosis is caused by an abnormal immune response that attacks the protective covering that surrounds nerve cells in the brain and spinal cord. The assault stops nerve cells from sending signals, sapping patients’ energy, blurring their vision and slowly robbing them of mobility, balance and coordination.
The relapse rate for patients using Aubagio was about 30 percent lower than the rate for those taking a placebo, Russell Katz, director of the Division of Neurology Products in the FDA’s Center for Drug Evaluation and Research, said in the agency’s statement. The drug will carry a boxed warning about the risk of liver toxicity and birth defects.
The disease, more common in women than in men, is believed to affect more than 2.1 million people worldwide. Many patients have trouble staying on current therapies because the drugs are difficult to use or cause side effects, according to the National Multiple Sclerosis Society.
While Aubagio is a once-daily tablet, Lemtrada, also known as alemtuzumab, is a so-called monoclonal antibody administered to patients through infusions for five consecutive days when they begin the treatment and for another three days 12 months later.
Aubagio will cost $45,000 a year in the U.S., 28 percent less than Gilenya, Sibold said.
The lower price is due to the fact that Aubagio is less effective than the Novartis product and carries the risk of liver side effects, analysts at Barclays Plc’s investment- banking unit including Mark Purcell said in a report today.
“We remain cautious on Aubagio and continue to believe that the company’s other MS pipeline asset, Lemtrada, will be significantly more successful,” they wrote.
Sanofi, Europe’s third-biggest drugmaker, has other experimental MS compounds in its pipeline in addition to Lemtrada and Aubagio, and it may grow the business further through partnerships and acquisitions, Panzara reiterated today.