- Even as French drugmaker Sanofi SA sees promising uptake from its nascent immunology franchise, a tightening diabetes market in the U.S. remained a major drag on company growth in the third quarter.
- U.S. sales of the company's diabetes medicines fell by more than a fifth during the period, as formulary exclusions for its top-selling product and stiffer market competition cut into the business. Global diabetes revenues decreased 10% year over year to total €1.55 billion ($1.8 billion) from July through September.
- Sanofi now forecasts diabetes sales to fall between 6% and 8% over the 2015 to 2018 period, lowering the upper bound of its previously issued guidance range to reflect an expected accelerated decline in the business during the fourth quarter.
Declining sales of Sanofi's diabetes drugs was largely expected, reflective of the ongoing pressure in the market. Still, the drugmaker has fared worse than rival Eli Lilly & Co. and expects an increasing impact from exclusions of its insulin Lantus (glargine) from CVS and United Health formularies.
Lantus and its successor Toujeo (glargine) have retained nearly 70% coverage from commercial plans, but only about half of those list the drugs under preferred status for 2018.
Negotiations with payers were "intense," said Sanofi CEO Olivier Brandicourt on a Nov. 2 conference call, indicating investors should expect net prices to continue to decline.
While diabetes struggles, Sanofi reported strong sales from its Genzyme unit, with sales in the third quarter up 13.9% year-over-year. The drugmaker's multiple sclerosis franchise, in particular, performed well despite competition from new entrants like Roche's Ocrevus (ocrelizumab).
Genzyme head Bill Sibold said Sanofi's drugs had not been disproportinately affected by the launch of Ocrevus, suggesting that most patient switches have been from Biogen Inc.'s Tysabri (natalizumab) and Tecfidera (dimethyl fumarate).
Sanofi's two new immunology drugs Dupixent (dupilumab) and Kevzara (sarilumab) also position the company's Genzyme unit for growth.
Sales of Dupixent tripled to $88 million dollars in the third quarter, shaking off some earlier signs of weaker-than-expected growth. The increase was driven by rising patient uptake as more healthcare professionals begin to prescribe the drug.
"The U.S. launch of Dupixent is performing ahead of expectations and we are excited about the prospects of the European launch," said Brandicourt.
Notably, more than 70% of the roughly 7,000 physicians who have prescribed Dupixent have written more than one prescription — something Sibold pointed to as a positive signal of interest from the medical community.
Sanofi secured EU approval of Dupixent in late September and expects to begin selling the drug in Germany by the end of the year. A successful roll out in Europe could add meaningfully to the drug's revenues — Sanofi estimates the target population of patients with moderate to severe atopic dermatitis in the region to number between 150,000 and 200,000.
The company's new immunology franchise also features the IL-6 inhibitor Kevzara (sarilumab). While third quarter sales were negligible, Brandicourt noted the drug had already captured a modest share of new prescriptions for the drug class.
"It will take time to build sales in the competitive rheumatoid arthritis market, but we are pleased that Kevzara has already captured 15% [new-to-brand prescription share]," Brandicourt said.