Sanofi Sees Cure for Cancer Woes in Moving West for Acquisitions

  • French drugmaker seeks ready drugs as well as bolder pioneers
  • One California cancer purchase backfired seven years ago

Sanofi is going west once more in its search for cancer gold.

Chief Scientific Officer Gary Nabel says to revive its oncology business, Sanofi is hunting for assets ranging from approved cancer drugs to experimental ones that mine new expertise, such as exploiting flaws in tumor cells.

Sanofi’s ambitions in cancer suggest Medivation Inc. of California may not be its only target. They also account for the French drugmaker’s dogged efforts to draw out Medivation’s board: with a blockbuster already on sale and an experimental medicine of a promising class known as PARP inhibitors, which disrupt cancer cells’ process of DNA repair, the U.S. biotechnology company’s pipeline ticks at least two boxes on Nabel’s list.

“One part of the approach is to take mature assets and to maximize value from those,’’ Nabel said in a telephone interview. “Those are late-stage acquisitions. But equally important, it’s looking at early stage developments like PARP inhibitors and others.’’

Paris-based Sanofi was once known for cancer blockbusters such as Taxotere and Eloxatin. But in recent years, sales at its cancer franchise have eroded as patents expired, enabling others to introduce low-cost versions of its medicines.

Bad Memories

And when it looked west to buy a pioneering PARP inhibitor to rejuvenate the business, things backfired. The experimental medicine that was the underlying motive for Sanofi’s 2009 acquisition of San Francisco-based BiPar Sciences Inc. failed in advanced tests less than two years later.

The French drugmaker then missed out on the wave of innovations in immuno-oncology that lifted the fortunes of Merck & Co. and Bristol-Myers Squibb Co. because it focused on exploring targeted therapies and studying the genes and genetic changes that lead to cancer, according to Nabel. This proved a hard space to work in, with only a few success stories, such as Novartis AG’s Gleevec, he said.

“Unless you were very lucky, and had a very good understanding of the target that you were after in the individual patient, the success more broadly was going to be limited,’’ Nabel said. Even Gleevec, which garnered sales of $4.7 billion last year, stops working in some patients who develop resistance because of mutations in their cancer genes, he said.

Crowded Field

Last year, the French drugmaker finally made a move to join the crowded field of immuno-oncology, in which drugmakers tailor the body’s defenses to attack cancer. It agreed to contribute $2.2 billion to work with Regeneron Pharmaceuticals Inc. on therapies known as checkpoint inhibitors, joining a patch already dominated by Merck’s Keytruda and Bristol-Myers’ Opdivo.

At Medivation, scientists are working on different approaches. Xtandi, the San Francisco-based company’s only approved drug, works in advanced prostate cancer by blocking several steps in the body’s testosterone-signaling pathway. That mechanism allows it to succeed where others, which partially damp hormone production or signalling, have failed.

And the experimental medicine talazoparib aims to disrupt cancer cells’ ability to repair themselves by inhibiting the protein known as PARP. It may well be the most potent medicine in the PARP class, according to Katherine Xu, an analyst at William Blair & Co. in New York, who estimates peak sales may reach $3 billion.

Rising Star

Owning the drug would place Sanofi ahead of competitors including Tesaro Inc., AstraZeneca Plc and AbbVie Inc. Much like BiPar’s iniparib, Medivation’s talazoparib is being billed as a rising star. Chief Executive Officer David Hung last week held a conference call devoted almost entirely to the product, which he touted as a “multi-billion dollar opportunity.”

Medivation agreed to enter negotiations with Sanofi and unnamed others on July 6 after having rebuffed the French drugmaker for three months. It rejected a raised Sanofi offer that values the company at $58 a share, with up to $3 a share more in a contingent value right tied to talazoparib’s success. The product could be worth $10 to $15 a share depending on the result of late-stage trials and its ability to treat a wide range of cancers, according to Xu. Medivation declined to comment for this article.

Sanofi’s aim is to catch the “next wave’’ of cancer drugs in 2018 and beyond, Nabel said. A key part of that will be finding the right acquisition targets. He declined to comment about Medivation specifically.

“There’s innovation externally -- late stage, where you pay more, but you get something that’s more defined,’’ Nabel said. “Early stage, where you pay less, and you take on more risk. But you can potentially pick up very transformative ideas early on. So we’d like to sample across that whole spectrum.’’

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