Sanofi turns R&D focus inward amid cuts to drug pipeline
- French pharma Sanofi aims to source more of its drug pipeline internally, betting on its own research labs to deliver as the company reprioritizes how it will allocate the roughly 6 billion euros it plans to spend on R&D each year through 2021.
- As part of that refocusing, Sanofi this year stopped work on 13 projects in development and another 25 in research, the company disclosed Thursday. Instead, investment will be channeled toward accelerating a slate of more promising experimental drugs, many of which are in the red-hot field of oncology.
- John Reed, who took over as Sanofi's head of R&D last July, noted on a Friday earnings call that the drugmaker expects to become less dependent on external partners, particularly in the wake of its buyouts last year of Bioverativ and Ablynx.
Sanofi's R&D revamp mirrors changes underway across much of the industry, as pharmaceutical companies move away from a diversified business model toward one more narrowly focused on high-growth therapeutic areas.
Historically, Sanofi derived much of its revenue from a diabetes franchise that has recently felt the effects of pricing pressures and increased competition. That impact was evident in earnings results the French drugmaker presented Friday, detailing a 10.5% year-over-year drop in global diabetes sales during the fourth quarter.
While Sanofi remains one of the three main drugmakers in the space, the company's moves to expand in immunology, oncology and rare blood disorders reflect a clear emphasis on specialty care markets outside of diabetes. (Sanofi categorizes diabetes under its primary care business unit.)
Of the 81 pipeline projects listed by Sanofi in February, 63 are in specialty care while only seven are in primary care. Recent pipeline cuts also fell heavily on diabetes and cardiovascular, with six of the 13 discontinued projects coming from the two therapeutic areas.
Particularly notable were moves to drop experimental dual agonists in Type 2 diabetes. Eli Lilly, a main Sanofi rival, has recently accelerated work on a dual GLP-1/GIP agonist, by contrast.
R&D chief John Reed characterized the pipeline cuts as reflective of Sanofi's commitment to a more focused drug development portfolio.
Currently, about 50% of Sanofi's pipeline stems from internally-derived molecules. The drugmaker hopes to up that proportion to 70% over the next five to 10 years, and claims it can deliver a pipeline 80% made up of first- or best-in-class drug candidates.
That goal won't be easy to hit, however, given many of its current key pipeline assets have been externally sourced, either through collaborations or M&A.
Acquiring Bioverativ and Ablynx, for example, gave Sanofi a rare blood disorder pipeline that just delivered a new drug approval in Cablivi (caplacizumab), which was OK'd this week in the U.S. for acquired thrombotic thrombocytopenic purpura.
Catching up to market leaders in oncology and immunology will also be challenging.
There, Sanofi has relied in recent years on the antibody expert Regeneron Pharmaceuticals to fill its pipeline. Recently approved drugs Dupixent (dupilumab), Kevzara (sarilumab), and Libtayo (cemiplimab) were developed through a research and commercialization partnership with the large biotech.
Sanofi and Regeneron ended an antibody discovery collaboration at the close of 2017, and recently narrowed a 2015 deal in immuno-oncology to focus only a few select molecules. Part of the rationale given by the companies was a desire to develop their early-stage pipelines in oncology more independently — reasoning supported by Thursday's comments from Reed.
Sanofi also highlighted that nine of the 12 or so molecules it has in development in oncology are wholly owned.
The French pharma's internal focus also appears to carry over to M&A. On Thursday's earnings call, Sanofi CEO Olivier Brandicourt said the company has focused on integrating Bioverativ and Ablynx. While it will remain opportunistic in dealmaking, Brandicourt said, the pharma wants to ensure first that those acquisitions are a success.
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