Headcount: 91,000
Pharma Revenues: $47,534 (0%)
Net Income: $5,960 (-36%)
R&D: $7,425 (0%)

Moving up into the sixth spot, in 2023 Sanofi’s Biopharma sales increased 5% to $41.8 billion, driven by Specialty Care and Vaccines growth, thanks to flagship Dupixent, with sales up 29% to $11.8 billion, and the launch of Beyfortus for the prevention of respiratory syncytial virus disease in infants. This growth was partially offset by lower sales of assets in General Medicines, namely Lovenox due to biosimilar competition.

Meanwhile, earnings for the year comprise an impairment loss of €919 million, reflecting the impact of the strategic decision to de-prioritize certain R&D programs, particularly those related to the NK Cell and PRO-XTEN technology platforms.

Investments & Acquisitions

Of note, Sanofi has made investments in bioproduction capacity in France and assets in oncology and orphan diseases, immunology, inflammation, and CNS targets, and metabolic syndrome.

Recently the company announced an investment of more than €1 billion to create new bioproduction capacity at its sites in Vitry-sur-Seine, Le Trait and Lyon Gerland. This new investment will significantly strengthen France’s ability to control the production of essential medicines from start to finish.

In Vitry-sur-Seine, Sanofi will invest €1 billion to build a new facility that will double the site’s monoclonal antibody production capacity. Several biologics in development amongst Sanofi’s 12 potential blockbusters, in chronic obstructive pulmonary disorder (COPD), asthma, multiple sclerosis or type 1 diabetes, could be produced at the site pending approvals.

At the Le Trait site in Normandy, Sanofi will invest €100 million to develop new capacity for biologics formulation, filling, device assembly and packaging. It will support the launch of future biologics and vaccines, as well as the continued growth of Dupixent, which is indicated in several inflammatory diseases and could soon become the first biologic indicated in COPD.

Lastly, in Lyon Gerland, Sanofi is investing €10 million to locate the production of TZield in France. Tzield is a biologic for type 1 diabetes that Sanofi acquired in April 2023, which has been manufactured outside Europe.

Early this year, Sanofi entered an agreement under which its subsidiary Aventis Inc. will acquire Inhibrx through a merger transaction valued at approximately $2.2 billion. Inhibrx is a clinical-stage biopharmaceutical company focused on developing biologics in oncology and orphan diseases leveraging its protein engineering platforms. Its lead asset INBRX-101 is an optimized, recombinant alpha-1 antitrypsin (AAT) augmentation therapy currently in a registrational trial for the treatment of alpha-1 antitrypsin deficiency.

Meanwhile, Sanofi made a $30 million strategic investment in MeiraGTx Holdings plc, a clinical stage gene therapy company, through the purchase of 4 million shares. Sanofi receives right of first negotiation to use MeiraGTx’s Riboswitch gene regulation technology for certain immunology, inflammation, and CNS targets, GLP-1 and other gut peptides for metabolic disease, and for MeiraGTx’s Phase 2 Xerostomia program.

Riboswitch is a short sequence of DNA that can be added to a gene therapy that can be toggled on and off with an oral pill to precisely control when and how much of the gene therapy gets made. Preclinical data has demonstrated the ability to control the production of antibodies, gut peptides, hormones, and a range of other molecules.

Additionally, Sanofi US made an additional strategic investment in Graviton Bioscience, a clinical-stage biotechnology company focused on therapies that inhibit Rho/Rho-associated coiled-coil containing protein kinase 2 (ROCK2), along with other therapeutic compounds. Here Sanofi receives a right of first negotiation to license compounds across various indications, including immunological and metabolic syndrome indications, driving the momentum behind ROCK2 inhibitor treatments.

ROCK2 is an effector of the small GTPase Rho and belongs to the AGC family of kinases. It is implicated in the pathology of multiple diseases, including metabolic, autoimmune, inflammatory, and neurologic disorders for which there is either inadequate or no treatment at all.

R&D Developments

Sanofi’s R&D focus is on difficult-to-treat diseases and immunization with a pipeline that includes 77 clinical-stage projects, 30 of which are in Phase 3 or have been submitted to regulatory authorities for approval. Some of these are new molecular entities while others are existing products with potential new indications, or different formulations.

The U.S. FDA has approved an expanded indication for Dupixent (dupilumab) for the treatment of pediatric patients aged 1 to 11 years with eosinophilic esophagitis (EoE). Dupixent is now the first and only medicine approved in the U.S. specifically indicated to treat these patients. This expands the initial FDA approval for EoE in patients aged 12 and older. EoE is a chronic, progressive disease driven in part by type 2 inflammation that damages the esophagus and impairs its function.

In late May, the U.S. FDA extended the target action date of its priority review of the supplemental Biologics License Application (sBLA) for Dupixent as an add-on maintenance treatment in uncontrolled COPD to September 27, 2024. While not raising any concerns regarding the approvability for this indication, the FDA requested additional efficacy analyses.

With the FDA approval Beyfortus (nirsevimab-alip) to protect infants against RSV disease, it became the first monoclonal antibody approved to protect infants through their first RSV season. The approval also includes use for children up to 24 months through their second RSV season.

Collaborations

Sanofi entered numerous development and commercialization partnerships this past year. Among them, a co-exclusive licensing agreement with Novavax to co-commercialize a COVID-19 vaccine and develop novel flu-COVID-19 combination vaccines. The agreement aims to combine Novavax’s adjuvanted COVID-19 vaccine with Sanofi’s portfolio of differentiated flu vaccines.

Novavax will receive $500 million upfront and as much as $700 million in development, regulatory and launch milestones, up to $1.2 billion in total. Starting in 2025, Sanofi will book sales of Novavax’s adjuvanted COVID-19 vaccine and will support certain R&D, regulatory and commercial expenses. Sanofi will pay royalties for COVID-19 vaccines and COVID-19-Influenza combo vaccines and will be responsible for development and commercialization of any novel flu-COVID-19 combination vaccine containing a Sanofi flu vaccine.

Meanwhile, Sanofi’s efforts in immunology and inflammatory disease include alliances with Teva Pharmaceuticals and Recludix Pharma with a potential combined value of $2.8 billion. Sanofi and Teva are working to co-develop and co-commercialize TEV’574, currently in Phase 2b trials for the treatment of Ulcerative Colitis and Crohn’s Disease, two types of inflammatory bowel disease. Sanofi will pay Teva $500 million upfront and as much as $1 billion in development and launch milestones. Sanofi will lead the development of the Phase 3 program.

Additionally, an alliance with Recludix, a platform provider for the discovery of inhibitors of challenging targets for inflammatory disease and cancer, aims to develop and commercialize oral small molecule STAT6 (signal transducer and activator of transcription 6) inhibitors for immunological and inflammatory diseases. STAT6 is believed to play a key role in multiple dermatological and respiratory diseases.

Recludix will receive $125 million in near-term payments, and may receive more than $1.2 billion in potential development, regulatory and sales milestones, as well as royalties.

Headcount: ~91,000
Revenues:  $45,899 (+14%)
Net Income: $7,174 (+8%)
R&D: $7,159 (+18%)

Sanofi covers six therapeutics areas: oncology, immunology & Inflammation, neurology, rare blood disorders, rare diseases, and vaccines, and has 84 compounds in development with 26 clinical trials in Phase 3 underway. Sales growth for the year was driven by its Specialty Care segment led by Dupixent, which added €3 billion of incremental sales, as well as Vaccines, up 6% for the year.

Last June, Sanofi opened its new 900,000-sq.-ft. campus in Cambridge, MA, one of the company’s largest U.S. sites. The campus aims to enhance collaboration between R&D, Medical, and the Specialty Care business unit, among others, to help accelerate drug development.

Furthermore, Sanofi and the Biomedical Advanced Research and Development Authority (BARDA) within the U.S. Department of Health and Human Services, broke ground on a new formulation and filling facility at Sanofi’s Swiftwater, PA site. The filler will be capable of filling syringe and vials using isolator barrier technology and single use technology for flexibility.

This represents one of three significant manufacturing investments made at the site, supported by a BARDA contract awarded in December 2019 to increase domestic production capabilities for recombinant pandemic influenza vaccines. The contract also enhances vaccine manufacturing, adding both recombinant and adjuvant technologies to the current egg-based platform capabilities.

Finally, following a delay by the Federal Trade Commission, Sanofi recently completed its acquisition of Provention Bio through the merger of a wholly owned subsidiary of Sanofi with and into Provention Bio, gaining TZIELD, the first disease-modifying treatment for the delay of Stage 3 type 1 diabetes (T1D). Sanofi had to withdraw and refile its proposal to acquire Provention Bio. In March, Sanofi entered an agreement to acquire Provention Bio, a U.S.-based biopharmaceutical company focused on intercepting and preventing immune-mediated diseases including type 1 diabetes, for approximately $2.9 billion.

Digital endeavors

Recently, Sanofi has taken steps in its company-wide digital transformation, rolling-out plai at scale, and implementing Veeva Vault QMS. The plai app, developed with artificial intelligence (AI) platform company Aily Labs, delivers real-time, reactive data interactions and provides a 360° view across all Sanofi activities, from research, clinical operations, to manufacturing and supply. The app aggregates available internal data across functions and harnesses AI to provide timely insights and personalized “what if” scenarios to support decision makers to take informed decisions.

Also, under an alliance with Veeva Systems, a provider of cloud software for the for the life sciences industry, Sanofi is implementing Veeva Vault QMS and Veeva Vault QualityDocs to modernize quality management across the company that will go live over the coming year.

Executive moves

This past February, Sanofi’s Global Head of R&D, Dr. John Reed, announced plans to leave the company to pursue a new opportunity. Dr. Reed joined the company in 2018 and has helped reshape Sanofi’s discovery and development efforts, focusing on first and best in class medicines for serious diseases, while managing the integration and development of new technology platforms and partnerships. As the company looks to find a successor to Dr. Reed, Dr. Dietmar Berger, has agreed to take leadership of the team on an interim basis. Dr. Berger has been serving as Chief Medical Officer and Global Head of Development since he joined Sanofi in 2019.

Alliances

Sanofi has simplified its contractual arrangements relating to Beyfortus (nirsevimab), a respiratory syncytial virus vaccine for infants, under which Sobi will terminate its participation agreement with AstraZeneca, and Sanofi and AstraZeneca will update the collaboration so that Sanofi has full commercial control in the U.S. Under a direct royalty agreement with Sobi, Sanofi will share a portion of U.S. sales from nirsevimab. Nirsevimab is a human recombinant monoclonal antibody with activity against respiratory syncytial virus.

Recently, the FDA Antimicrobial Drugs Advisory Committee (AMDAC) voted unanimously that Sanofi and AstraZeneca’s nirsevimab has a favorable benefit risk profile for the prevention of RSV lower respiratory tract disease in newborns and infants born during or entering their first RSV season. If approved, nirsevimab would be the first immunization specifically designed to protect all infants through their first RSV season.

Meanwhile, several collaborations entered throughout the year provide Sanofi with access to targeted development platforms. An expanded alliance with CytoReason, a pioneer in computational disease modeling, aims to further Sanofi’s target discovery efforts using CytoReason’s AI platform in the field of inflammatory bowel disease (IBD), to identify patient subtypes and pair them with IBD targets. In 2021, the companies initiated a project with Sanofi using cell-centered models to suggest mechanistic insights to better understand asthma patient subtypes.

Additionally, a strategic research alliance with Insilico Medicine valued at $1.2 billion leverages Insilico’s AI platform to advance drug development candidates for up to six new targets. Sanofi will pay Insilico $21.5 million in upfront and target nomination fees, and additional payments if key R&D, and sales milestones are met.

Sanofi and Innate Pharma SA expanded their collaboration, with Sanofi licensing a natural killer (NK) cell engager program in oncology targeting B7H3 from Innate’s ANKET (Antibody-based NK Cell Engager Therapeutics) platform. Sanofi also has the option to add up to two additional ANKET targets. Upon candidate selection, Sanofi will be responsible for all development, manufacturing, and commercialization. The companies first signed an NK cell engagers collaboration in 2016 for up to two bispecific NK cell engagers, which are currently being evaluated by Sanofi’s R&D team, with one of these molecules in clinical studies.

Finally, Sanofi received a $100 million regulatory milestone payment from Regeneron triggered by the FDA approval of Libtayo (cemiplimab-rwlc) in combination with chemotherapy for the first-line treatment of advanced non-small cell lung cancer (NSCLC) with no EGFR, ALK or ROS1 aberrations. Regeneron had purchased Sanofi’s stake in the Libtayo collaboration, providing Regeneron with exclusive worldwide rights to the medicine.

Approvals

Sanofi received its first approval from the FDA for ALTUVIIIO, a first-in-class, high-sustained factor VIII replacement therapy indicated for routine prophylaxis and on-demand treatment for hemophilia A. ALTUVIIIO is the first and only hemophilia A treatment that delivers normal to near-normal factor activity levels (over 40%) with once-weekly dosing, and significantly reduces bleeds compared to prior factor VIII prophylaxis.

FDA has also approved Xenpozyme (olipudase alfa-rpcp) for the treatment of non-central nervous system manifestations of acid sphingomyelinase deficiency (ASMD), becoming the first and only therapy indicated specifically for the treatment of this disease.

Headcount: 100,409
Pharma Revenues: $37,701 (+3%)
Net Income: $7,047 (-49%)
R&D: $6,446 (+3%)

TOP SELLING DRUGS

For the first time, Specialty Care became Sanofi’s largest business unit by sales in the fourth quarter of 2021, driven by Dupixent. Sales growth for the year was again driven by Dupixent with sales of $5.9 billion, up 53% and Vaccines nearing $7.2 billion, up 7% with another year of record influenza sales.

Sanofi set out to strengthen R&D capabilities with several M&A transactions in 2021. For $1 billion upfront and as much as $225 million in future development milestones, Sanofi acquired Amunix, an immuno-oncology company, adding a promising pipeline of T-cell engagers and cytokine therapies. Sanofi gains lead candidate AMX-818, a masked HER2-directed TCE expected to enter clinical trials in early 2022, and access to Amunix Pro-XTEN, XPAT, and XPAC technology. Amunix’s XTEN masks and cleavable linkers are a next-generation protein engineering approach that allows biologics to circulate in “stealth” mode, becoming active preferentially in disease specific micro-environments, with the aim to enable safer and more efficacious medicines. The technology can be applied to a wide range of existing and potentially new pipeline assets.

In December, Sanofi entered an agreement to acquire Origimm Biotechnology GmbH, a privately owned Austrian biotechnology company specializing in the discovery of virulent skin microbiome components and antigens from bacteria causing skin disease, such as acne.  The transaction adds ORI-001, an early-stage therapeutic vaccine candidate for acne vulgaris based on recombinant proteins. Sanofi is also working to develop additional antigen versions and expects to leverage its next-generation mRNA platform in a Phase 1/2 trial to start in 2023.

Supporting efforts to grow its General Medicines assets, Sanofi acquired Kadmon Holdings, Inc., a biopharmaceutical company developing therapies for disease areas of significant unmet needs, for approximately $1.9 billion. This deal adds first-in-class Rezurock (belumosudil) to its transplant portfolio. Rezurock was recently FDA-approved for chronic graft-versus-host disease (cGVHD) for adult and pediatric patients 12 years and older who have failed at least two prior lines of systemic therapy.

Betting big on messenger RNA (mRNA), Sanofi acquired Translate Bio for $3.2 billion, as part of its efforts to develop vaccines and therapies using mRNA technology. Shortly after the buy Sanofi scrapped a COVID-19 vaccine candidate following interim phase 1/2 data and accelerated its switch to modified mRNA. Modified mRNA tries to bypass the inflammatory reaction against foreign nucleic acid. While Sanofi said there were no safety concerns, and tolerability was “comparable” to that of other unmodified mRNA vaccines, Sanofi saw no value in bringing a mRNA vaccine to market so long after Pfizer and Moderna front-runners.

In line with these efforts, Sanofi invested in a first-of-its kind vaccines mRNA Center of Excellence, contributing approximately $450 million annually. The Center will work to accelerate the development and delivery of next-generation vaccines by bringing together approximately 400 employees integrating end-to-end mRNA vaccine capabilities with dedicated R&D, digital, and chemistry, manufacturing and controls (CMC) teams across sites at Cambridge, MA and Marcy l’Etoile, Lyon in France.

Collaborations

Several oncology and immunology alliances will leverage drug development, delivery, and AI technology to advance antibodies and small molecules. An exclusive collaboration with Seagen Inc. aims to design, develop, and commercialize antibody-drug conjugates (ADCs) for up to three cancer targets leveraging Sanofi’s monoclonal antibody (mAb) technology and Seagen’s ADC technology. ADCs are antibodies engineered to deliver potent anti-cancer drugs to tumor cells expressing a specific protein and Sanofi currently has one ADC in development. The companies will co-fund global development activities and share any future profits. In addition, Sanofi will make an undisclosed payment to Seagen for each of the three targets as they are selected.

Under a strategic, risk-sharing collaboration, Blackstone Life Sciences will contribute up to €300 million to accelerate the global studies and the clinical development program for the subcutaneous formulation and delivery of the anti-CD38 antibody Sarclisa, to treat multiple myeloma (MM). If successful, Blackstone will be eligible to receive royalties on future sales. The study for the subcutaneous formulation is expected to begin in the second half of 2022. Sarclisa has received regulatory approval for intravenous administration to treat certain patients with relapsed MM and is under investigation across the MM treatment continuum of care for other hematologic malignancies and solid tumors.

Finally, a research collaboration and license agreement with Exscientia aims to develop as many as 15 novel small molecule candidates across oncology and immunology, leveraging Exscientia’s AI-driven platform utilizing actual patient samples. The companies have been working together since 2016, and in 2019, Sanofi in-licensed Exscientia’s novel bispecific small molecule candidate capable of targeting two distinct targets in inflammation and immunology.

R&D advances

Sanofi’s R&D pipeline comprises 91 clinical-stage projects, 34 of which are in phase 3 or have been submitted to regulatory authorities for approval. Some of these are new molecular entities while others are potential new indications or different formulations existing products. Among key milestone and regulatory achievements, Dupixent gained pediatric indications with FDA approval for the treatment of moderate-to-severe asthma for children aged 6 to 11 years; as the first biologic for children 6 months to 5 years with moderate-to-severe atopic dermatitis; and as the first treatment for adults and children aged 12 and older with eosinophilic esophagitis.

Additionally, Sanofi and GlaxoSmithKline plan to seek regulatory authorization for their COVID-19 vaccine. The companies’ COVID-19 recombinant booster candidate recently showed consistently strong immune responses regardless of primary vaccine received. Sanofi reported data from two trials with its new next-generation COVID-19 booster vaccine candidate modelled on the Beta variant antigen and including GSK’s pandemic adjuvant. In the Phase 3 study, the Sanofi-GSK vaccine candidate induced a significant boost in antibody titers above baseline against multiple variants of concern in adults previously primed with mRNA COVID-19 vaccines. In particular against Omicron, preliminary data show a 40-fold increase against BA.1.

In the VAT08 Phase 3 primary series trial, two doses of the Sanofi-GSK vaccine in seronegative populations demonstrated: 100% efficacy against severe COVID-19 disease and hospitalizations, 75% efficacy against moderate or severe COVID-19 disease, and 57.9% efficacy against symptomatic COVID-19 disease.

Meanwhile the FDA granted efanesoctocog alfa Breakthrough Therapy designation for hemophilia A. It is the first factor VIII therapy to be awarded this designation by the FDA and is based on Phase 3 data demonstrating a clinically meaningful prevention of bleeds and superiority in prevention of bleeding episodes compared to prior prophylaxis factor treatment. Efanesoctocog alfa is designed to provide normal to near-normal factor activity levels for the majority of the week in a once-weekly prophylactic treatment regimen.

Also, the FDA approved Enjaymo (sutimlimab-jome) to decrease the need for red blood cell transfusion due to hemolysis in adults with cold agglutinin disease (CAD), a rare autoimmune hemolytic anemia. Enjaymo is the first and only approved treatment for people with CAD and works by inhibiting the destruction of red blood cells.

Late-stage assets

A phase 3 Sarclisa (isatuximab) trial met its primary endpoint of minimal residual disease negativity in transplant-eligible patients with newly diagnosed multiple myeloma. Sarclisa combination therapy is the first to demonstrate superiority to standard of care lenalidomide, bortezomib and dexamethasone (RVd) in a Phase 3 trial with 50.1% of patients achieving undetectable levels of disease after 18 weeks of induction treatment with Sarclisa-RVd. Minimal residual disease negativity is an important clinical endpoint associated with better patient outcomes, which is meaningful for MM where most patients relapse.

Finally, a Phase 3 trial of Sanofi and Regeneron’s PD-1 inhibitor Libtayo combined with chemotherapy was stopped early due to significant improvement in overall survival in patients with first-line advanced non-small cell lung cancer. Libtayo combined with chemotherapy increased median overall survival from 13 to 22 months, leading to an impressive 29% reduction in the risk of death. Libtayo has now demonstrated improved overall survival as a monotherapy or in combination with chemotherapy in first-line advanced non-small cell lung cancer.

Headcount: 100,409
Pharma Revenues: $38,870 (0%)
Net Income: $15,169 (>100%)
R&D: $6,791 (0%)

TOP SELLING DRUGS

This past year Sanofi invested in bolstering its assets in immunology and oncology via acquisitions of Tidal Therapeutics, Kymab Group, and Principia Biopharma, and invested €1.6 billion in vaccine production sites in Singapore, France, and Canada.

While revenues remained relatively flat, the continuous uptake and potential of top seller Dupixent, a specialty biologic used to treat eczema and asthma, more than offset declines in diabetes and cardiovascular franchises (namely Plavix and Lantus). Sanofi also met several key regulatory milestones, including recent progress with its COVID-19 vaccine candidate being developed with GlaxoSmithKline.

Sanofi also launched EUROAPI, which according to estimates, is expected to be the largest API player in the EU, ranking number 1 in small molecules API, and number 2 on the global API market.

A note regarding financials. There was a change of presentation according to the Company new management reporting basis for 2020 in order to be reported under IFRS and its related interpretations for comparison purposes.
While Plavix sales dropped 25% in 2020, mainly reflecting lower sales in China, Dupixent sales reached $4.3 billion, with total prescriptions increasing 65% and new to brand prescriptions up 18% despite fewer in person physician visits, which remain below the pre COVID level. Full year 2020 Lovenox sales were up 9% driven by Rest of the World sales growth, which more than offset biosimilar competition in Europe.

Also, benefiting from increased demand, Influenza vaccine sales were up 43%, reflecting strong demand in the northern hemisphere. In Europe, sales growth was driven by increased vaccination coverage and the launch of the differentiated portfolio (Efluelda, a quadrivalent Influenza Vaccine High Dose and Supemtek, a recombinant influenza vaccine).

Acquisitions
Three acquisitions in 2020 added assets in key areas of oncology, immunology, autoimmune, and allergy. For $160 million upfront and up to $310 million in potential milestones, Sanofi acquired Tidal Therapeutics, adding an innovative mRNA-based research platform with research capabilities in both immuno-oncology and inflammatory diseases, and potentially applicability to other disease areas as well. Ongoing preclinical programs include in vivo re-programming of T cells for cancer indications.

The acquisition of Kymab Group for approximately $1.1 billion upfront and up to $350 million for certain milestones, added KY1005, a fully human monoclonal antibody targeting key immune system regulator OX40L, and oncology asset KY1044, an ICOS agonist monoclonal antibody currently in early Phase1/2 development as monotherapy and in combination with an anti-PD-L1.

Lastly, Sanofi acquired Principia Biopharma for approximately $3.7 billion strengthening core R&D areas of autoimmune and allergic diseases. The acquisition provides full control of brain-penetrant BTK inhibitor SAR442168 in multiple sclerosis (MS), and allows expansion of the development program into other central nervous system diseases and therapeutic areas. Sanofi also gained the advanced oral Bruton’s tyrosine kinase inhibitor (BTK) rilzabrutinib with potential across a range of immunology and inflammation indications.

Corporate news
In January 2021, Sanofi unveiled EUROAPI as the name of what is to be the largest API player in the EU, with approximately €1 billion in expected sales by 2022. Representing “made in Europe” API state-of-the-art industrial capabilities and technologies, EUROAPI will help secure significant API manufacturing and supply capacities for Europe and beyond.

In line with its corporate strategy, Sanofi is investing €610 million to create a new production site and research center in France dedicated to vaccines. A vaccine production site in Neuville sur Saône and a new research center in Marcy-l’Etoile will both be dedicated to vaccines and the investment will strengthen Sanofi’s capacity to research innovative vaccines and produce them on a massive scale.

In Toronto, Sanofi is investing more than €600 million to build a new vaccine facility to increase supply of its differentiated influenza vaccines in Canada, the U.S. and Europe. The company’s Fluzone High-Dose Quadrivalent influenza vaccine has four times more antigen than standard-dose vaccine and is specifically designed to provide superior protection against influenza for older adults.

Also part of its efforts to strengthen its vaccines manufacturing capacities, Sanofi is investing €400 million over five years in a unique vaccine production site in Singapore leveraging cutting edge manufacturing and digital technologies. The new site will allow Sanofi to produce innovative vaccines on a massive scale for Asia, and quickly respond to future pandemic risks.

R&D
Several key oncology assets advanced this past year, including the FDA approval of Sarclisa (isatuximab) in combination with carfilzomib and dexamethasone for patients with relapsed or refractory multiple myeloma. The Sarclisa regimen reduced risk of disease progression or death by 45% compared to standard of care in patients who had relapsed after one to three prior therapies. This is the second FDA approval for Sarclisa in combination with standard of care backbone therapies.

The FDA also approved Libtayo for first-line advanced non-small cell lung cancer with PD-L1 expression of ≥50%. Libtayo was superior in extending overall survival compared to chemotherapy in a pivotal trial that allowed for certain disease characteristics frequently underrepresented in advanced NSCLC trials. This is the third approval for Libtayo in the U.S.

Additionally, Libtayo is now approved for advanced stages of the two most common skin cancers in the U.S., advanced basal cell carcinoma and metastatic BCC. Furthmore, a Phase 3 trial of Libtayo in advanced cervical cancer was stopped early for positive results on overall survival. Libtayo is the first immunotherapy to demonstrate improved survival in cervical cancer, reducing the risk of death by 31% compared to chemotherapy. Regulatory submissions are planned in 2021.

FDA granted priority review for avalglucosidase alfa, a potential new therapy for Pompe disease, with a decision expected soon. Regulatory submission was based on positive data from two trials in patients with late-onset and infantile-onset Pompe disease, a rare degenerative muscle disorder that affects approximately 3,500 people in the U.S.

Also of note, pivotal data show Dupixent significantly reduced asthma attacks and improved lung function in children. Dupixent is the only biologic medicine to improve lung function in children aged 6 to 11 years with uncontrolled moderate-to-severe asthma in a Phase 3 trial, with potential to be best-in-class treatment for these patients. The FDA’s decision is expected by October 2021.

COVID vaccine supply
In addition to leveraging its manufacturing capacity to support Moderna, Johnson & Johnson, and BioNTech with the manufacture of their respective COVID vaccines, Sanofi and GSK recently initiated a global Phase 3 trial of the companies adjuvanted recombinant-protein COVID-19 vaccine candidate. A two-stage design will evaluate vaccine formulations targeting original D.614 virus as well as B.1.351 variant, in diverse geographies with multiple circulating variants. A booster study program will complement the Phase 3 trial. Pending positive outcomes and regulatory reviews, the vaccine could be approved in 4Q21. Encouraging interim results from the Phase 2 study showed the ability of the adjuvanted recombinant-protein COVID-19 vaccine candidate to generate a strong booster response.

Meanwhile, Sanofi is the only company to leverage its manufacturing capacity and expertise to support three different COVID-19 vaccines to help address global supply demands. Sanofi will manufacture up to 200 million doses of Moderna’s vaccine in the U.S. starting in September 2021 leveraging its infrastructure and manufacturing at its site in Ridgefield, NJ, to perform fill and finish.

For J&J, Sanofi will provide several manufacturing steps from its vaccine manufacturing plant in Marcy l’Etoile, France, to formulate and fill vials of Janssen’s COVID-19 vaccine candidate in 2021, at a rate of approximately 12 million doses per month. And, from summer 2021, Sanofi will perform late-stage manufacturing to supply over 125 million doses of BioNTech’s COVID-19 vaccine for the EU from its production facilities in Frankfurt.

Headcount: 100,409
Revenues: $40,456 (+5%)
Net Income: $2,336 (-35%)
R&D: $6,744 (+2%)

TOP SELLING DRUGS

It was an active 2019 for Sanofi. The French pharma major reported sales of $40.5 billion, up slightly from $39.4 billion the year before.

In the beginning of June, the company named Paul Hudson as its new chief executive officer, which took effect September 1. Mr. Hudson succeeded Olivier Brandicourt and most recently served as chief executive officer of Novartis Pharmaceuticals.

Towards the end of June, Sanofi announced it was restructuring its R&D Group and would be eliminating 466 jobs in France and Germany as part of a reorganization to focus on its immuno-oncology pipeline and gene therapies.

The plan called for an exit in cardiology research in order to focus on existing assets and in-licensed clinical-phase drugs in this area. Also, the company’s diabetes research will focus on drugs that address the underlying causes of the disease but Sanofi will continue to develop its existing diabetes pipeline.

The plan also calls for an expansion of gene therapy R&D in the U.S., where it has a focused group in Massachusetts, and it will further invest in antibody engineering in Germany. The changes may also include reorganizing R&D activities among its sites in France in an effort to use its resources more efficiently.

At the end of the year, Sanofi enhanced its cancer and autoimmune pipeline when it acquired Synthorx, a CA-based immuno-oncology company, for $2.5 billion. Sanofi gains Synthorx’s lead investigational immuno-oncology candidate, THOR-707, as a single agent and in combination with another type of immunotherapy drug to address multiple tumor types. THOR-707, a variant of immune system molecule interleukin-2, leverages the immune system to destroy tumors by increasing the immune system cells that destroy damaged cells. Research to date shows the compound requires fewer doses than other interleukin-2 products, potentially reducing dangerous side effects.

The company has two other immuno-oncology candidates in the pipeline and one candidate for autoimmune disorders. Sanofi and Synthorx also aim to explore combination opportunities with Sanofi’s clinical and preclinical programs.

Next-gen biotech manufacturing
Sanofi made a major splash during the year when it opened its new digital manufacturing facility in Framingham, MA, marking one of the world’s first digital facilities using intensified, continuous biologics production technology.

The new first-of-its-kind facility features leading-edge technology that connects the production process with research and development, paving the way for improved commercialization of important new medicines for patients.

This facility accelerates the recent transformation of Sanofi’s Industrial Affairs organization to focus on biologics-based therapies, in line with the transformation of the company’s R&D pipeline. The ramping up of biopharmaceutical production capacities is a key pillar to achieving Sanofi’s refocused efforts.

The facility’s advanced paperless and data-driven manufacturing technologies is expected to enable Sanofi to achieve higher levels of productivity, agility, and flexibility, reducing the time it takes for products to move from the development labs to the manufacturing plant.

The digital transformation of Sanofi’s manufacturing network is a key element of the company’s goal to leverage better use of data to optimize the company’s manufacturing processes, increasing efficiencies, improving the agility needed to respond to fast changing patient needs, and speeding up the commercialization of new medicines emerging from the R&D pipeline.

Framingham is the latest biologics manufacturing facility amongst a number of pilots, which are being accelerated across the Sanofi network. The innovations established at this facility are being deployed and standardized across the company. Framingham is the first “digitally born” facility while similar digital transformations are introduced in other legacy plants. Beyond Framingham, Sanofi intends to move forward with digital transformation initiatives in Toronto (Canada), Suzano (Brazil), Waterford (Ireland), Sisteron (France), and Geel (Belgium).

The Framingham digital biomanufacturing facility is part of Sanofi’s integrated, cross-functional biologics hub in Framingham. A critical global hub for more than 30 years, the campus offers co-location of all the infrastructure and activities required to speed the delivery of innovative new therapies to patients, from early stage research and process development through clinical and commercial manufacturing, including the key enabling functions of quality control and compliance, regulatory, engineering, supply chain, and learning and development.

The co-location of these critical functions allows for seamless, end-to-end product and process design and manufacturing and provides leading-edge development opportunities for our employees’ competencies evolution.

Transforming healthcare with digital innovation
During the year, Sanofi teamed up with Google to develop the Innovation Lab—a virtual healthcare environment that aims to radically transform how future medicines and health services are delivered to patients.

The Innovation Lab will develop both scientific and commercial solutions by tapping into the power of emerging data technologies. The collaboration aims to change how Sanofi develops new treatments and will focus on three key objectives: to better understand patients and diseases, to increase Sanofi’s operational efficiency, and to improve the experience of Sanofi’s patients and customers.

Sanofi and Google will leverage deep analytics across data sets to better understand key diseases and extract related patient insights. This will enable Sanofi to research and develop more personalized approaches to treatment and identify accompanying technologies to improve health outcomes. The companies will apply technology and analytics on Sanofi’s large real-world database to better understand what treatments work for patients. This aims to result in an improved ability to offer personalized treatment advice, thus optimizing patient care and reducing healthcare costs.

Headcount: 104,226
Revenues: $39,419 (-2%)
Net Income: $4,925 (+1%)
R&D: $6,742 (+8%)

TOP SELLING DRUGS  

Revenue fell slightly for Sanofi in 2018 as it continued to restructure its operations to focus on mature markets and across emerging markets. The French pharma major reported sales of $39.4 billion, down 2% from the year prior, and slid two spots to number five in this year’s ranking.

During the year, Sanofi changed the organizational structure of two of its global business units, creating a new primary care unit that combines the product portfolios of the existing diabetes and cardiovascular unit with established products. The new primary care unit will focus exclusively on mature markets.

Sanofi also created a second new global business unit called China and emerging markets. This newly-formed business will focus on the growth opportunities in emerging markets, particularly in China, which is Sanofi’s second largest market after the U.S.

In-line with these plans to focus efforts on emerging markets, particularly China, Sanofi launched global R&D operations in the country during the year. The new Global R&D Operations Hub is focused on digitalization and big data analysis and located in Chengdu, Sichuan province, China. The new R&D operations in China will serve as Sanofi’s third pillar of Sanofi Global Clinical Sciences and Operations, joining facilities in France and the U.S.

The €66 million investment will support the clinical research and development of Sanofi’s drugs by focusing on the management of global multi-center clinical trials data and files. The hub will bring together global data and analysis in an effort to accelerate the availability of trial results, from Phase I to Phase IV.

The Chengdu Hub will target therapeutic areas including diabetes and cardiovascular diseases, vaccines, oncology, immunology and inflammation, rare diseases, multiple sclerosis and neurology. It will leverage global cutting-edge biological technology for polypeptides, gene therapy, monoclonal antibodies and multi-specific antibodies. The Hub plans to recruit 300 local pharmaceutical R&D professionals by 2020.

In another major investment, Sanofi is pouring nearly $400 million into the construction of a new state-of-the-art vaccine manufacturing facility at the Sanofi Pasteur Canadian headquarters in Toronto, Ontario, Canada. The new facility will allow Sanofi Pasteur, the vaccines global business unit of Sanofi, to meet the growing demand of five-component acellular pertussis (5-acP) antigen. Upon completion in 2021, the new building will also be equipped to produce the antigens used in the diphtheria and tetanus vaccines.

M&A deals and divestments
Sanofi signed a few acquisition and divestment agreements during the year as part of its refocused strategy. The largest deal in terms of dollars was the $11.6 billion acquisition of Bioverativ, a biopharma company focused on therapies for hemophilia and other rare blood disorders. Bioverativ was created from Biogen’s hemophilia-focused spinoff launched in early 2017.

Hemophilia represents the largest market for rare diseases, with approximately 181,000 people affected worldwide, and is expected to grow above 7% per year through 2022. Bioverativ has approximately $10 billion in annual sales. It’s extended half-life therapies, Eloctate and Alprolix for the treatment of hemophilia A and B, respectively, represented the first major advancements in the hemophilia market in nearly two decades when launched. In 2016, Bioverativ generated $847 million in sales and $41 million in royalties.

Sanofi believes factor replacement therapy will remain the standard of care in hemophilia for many years due to its safety and increasingly superior long-acting profile. Sanofi will be able to leverage Bioverativ’s clinical expertise and commercial platform to advance fitusiran, an investigational RNA interference (RNAi) therapeutic for hemophilia A and B, with or without inhibitors.

Bioverativ’s pipeline includes a Phase III program for cold agglutinin disease, and early stage research programs and collaborations in hemophilia, and other rare blood disorders, including sickle cell disease and beta thalassemia.

In another acquisition, Sanofi purchased Ablynx, a biopharma company focused on the discovery and development of nanobodies, for approximately $4.8 billion. Sanofi said the acquisition is part of its innovation efforts focused on technologies addressing multiple disease targets with single multi-specific molecules.

Nanobodies are a new class of next-gen biologics. Ablynx’s nanobody technology supports an extensive pipeline of more than 45 proprietary and partnered candidates for a range of therapeutic areas such as hematology, inflammation, immuno-oncology and respiratory diseases. Eight nanobodies have entered clinical development.

On the divestment front, Sanofi sold its European generics business to Advent International for roughly €1.9 billion, as part of a continued effort to focus on its core areas of global medicines and emerging markets, specialty care and diabetes and cardiovascular. Sanofi’s chief executive officer at the time, Olivier Brandicourt*, had planned to sell the business back in 2015 as part of the refocusing effort. Since then, Sanofi also sold its animal health business Merial, purchased Boehringer Ingelheim’s consumer health assets, and made the aforementioned acquisitions of Ablynx and Bioverativ.

Sanofi also sold off its UK contract manufacturing organization (CMO) business. Recipharm bought the manufacturing center and business in Holmes Chapel, UK. The site manufactures flutiform for Vectura Group. As part of the transaction, Sanofi entered into a long-term supply agreement for the products currently manufactured at the facility, including metered dose inhalers and nasal sprays.

*Note: As this issue goes to press, Paul Hudson will be getting ready to take over the chief executive role upon Mr. Brandicourt’s retirement.

Headcount: 106,566
Revenues: $41,991 (+4%)
Net Income: $11,192 (+1%)
R&D: $6,555 (+6%)

TOP SELLING DRUGS

In 2017, Sanofi posted a modest four percent growth to $42 billion. This was driven by the performance of Sanofi Genzyme, Sanofi Pasteur and emerging markets, which offset poor diabetes sales.

Sanofi Genzyme, the specialty care unit focused on the areas of rare diseases, multiple sclerosis, oncology, and immunology, grew 15%. Sanofi Pasteur, the vaccines division, increased 8%, while emerging market sales were up 6%. Diabetes and cardiovascular sales dropped 14%.

There are high hopes for Sanofi’s new launch, Dupixent, touted for being the first and only biologic medicine for the treatment of adults with moderate-to-severe atopic dermatitis. The drug was ranked No. 2 on life science commercial intelligence firm Evaluate’s biggest approvals for 2017; analysts expect it will bring in more than $4 billion in 2022.

Also in 2017, Sanofi launched Kevzara for the treatment of adult patients with moderately to severely active rheumatoid arthritis. The launches come as the key diabetes business struggles. Sales for its top seller Lantus dropped 13% to $5.2 billion.

In addition to Dupixent and Kevzara, Sanofi is looking to shore up diabetes losses with the continued global launch and ramp-up of Toujeo; Praluent for hypercholesterolemia; and Soliqua 100/33/ Suliqua, a combination of lixisenatide and insulin glargine treatment for diabetes, whose market access in the U.S. is progressing.

Ready to take on rare diseases

Sanofi made two deals recently to establish itself as a major global player in rare blood disorders. First, it spent $11.6 billion to acquire Bioverativ, a biopharma company focused on therapies for hemophilia and other rare blood disorders. Bioverativ was created from Biogen’s hemophilia-focused spinoff launched in early 2017.

Hemophilia represents the largest market for rare diseases, with approximately 181,000 people affected worldwide, which is expected to grow above 7% per year through 2022. Bioverativ has approximately $10 billion in annual sales.

Bioverativ’s extended half-life therapies, Eloctate [Antihemophilic Factor VIII (Recombinant), Fc Fusion Protein] and Alprolix [Coagulation Factor IX (Recombinant), Fc Fusion Protein] for the treatment of hemophilia A and B, respectively, represented the first major advancements in the hemophilia market in nearly two decades when launched. In 2016, Bioverativ generated $847 million in sales and $41 million in royalties.

Sanofi believes factor replacement therapy will remain the standard of care in hemophilia for many years due to its safety and increasingly superior long-acting profile. Sanofi will be able to leverage Bioverativ’s clinical expertise and commercial platform to advance fitusiran, an investigational RNA interference (RNAi) therapeutic for hemophilia A and B, with or without inhibitors.

Bioverativ’s pipeline includes a Phase III program for cold agglutinin disease, and early stage research programs and collaborations in hemophilia, and other rare blood disorders, including sickle cell disease and beta thalassemia.

Most recently, Sanofi inked a deal to acquire Ablynx for $4.8 billion to strengthen its R&D strategy with the innovative Nanobody technology platform. The acquisition is part of Sanofi’s innovation efforts focused on technologies addressing multiple disease targets with single multi-specific molecules.

Nanobodies are a new class of next-gen biologics. Ablynx’s nanobody technology supports an extensive pipeline of more than 45 proprietary and partnered candidates for a range of therapeutic areas such as hematology, inflammation, immuno-oncology and respiratory diseases. Eight nanobodies have entered clinical development.

Also in 2017 Sanofi acquired Protein Sciences, a biotechnology company headquartered in Meriden, CT for $750 million. The principal product of Protein Sciences is Flublok, the only recombinant protein-based influenza vaccine approved by the FDA in the U.S. Protein Sciences received approval for Flublok from the FDA in October 2016.

Sanofi also divested its ACAM2000 small pox business to Emergent BioSolutions for $125 million. ACAM2000 (Smallpox  Vaccine, Live) is the only vaccine licensed by the FDA for active immunization against smallpox disease for persons determined to be at high risk for smallpox infection. The deal includes a cGMP bulk manufacturing facility and a lease to a cGMP fill/finish facility, both U.S.-based, along with the existing staff of approximately 100 employees.

Lastly, another major transaction took place as this issue went to press when Sanofi sold off its European generics business for $2 billion. It made the deal with Advent International in order to focus on core areas of global medicines and emerging markets, specialty care and diabetes and cardiovascular. The deal is expected to close in the fourth quarter this year and the new business will be called Zentiva. Sanofi’s chief executive officer, Olivier Brandicourt, had planned to sell the business back in 2015 as part of a refocusing effort. Since then, Sanofi also sold its animal health business Merial, purchased Boehringer Ingelheim’s consumer health assets, and acquired the aforementioned Ablynx and Bioverativ.

Biologics pacts

In March of 2017 Sanofi and Lonza entered into a partnership to build and operate a large-scale mammalian cell culture facility for monoclonal antibody production in Visp, Switzerland. The strategic partnership in the form of a joint venture combines the biologics development pipeline of Sanofi with Lonza’s capability to design, construct, start-up and operate a state-of-the-art large-scale mammalian cell culture facility. The initial investment will be approximately $285 million to be split equally between each company.

The initial phase of the facility construction began in 2017 and is expected to be fully operational by 2020. Lonza has previously built and licensed three similar facilities in the U.S. and Singapore.

Each party will share the available capacity in line with their equity shareholding in the joint venture. Sanofi will have additional access to bio-manufacturing capacity to support increasing demands for their portfolio of biologic therapeutic products, should they require it. Lonza will be free to market their share of capacity, if not required by Sanofi, and will also market unused Sanofi capacity, where available. Lonza will construct the facility and will support the joint venture in its operations.

According to the companies, the strategic partnership enables Sanofi to react quickly to fluctuations in demand in a short timeframe, reinforcing their capability to launch high quality, next generation biologic medicines and ensure consistent access for patients. It also provides Lonza with needed capacities to respond to growing manufacturing demands for large-scale mammalian cell culture based therapeutic proteins, therefore allowing Lonza to better serve its customers. By adding flexibility in this way, this model will help to optimize biologics production capacity across the whole industry.

In other biologics news, Sanofi Pasteur entered an agreement with MedImmune, the biologics R&D arm of AstraZeneca, to develop and commercialize monoclonal antibody MEDI8897 for the prevention of respiratory syncytial virus (RSV) in infants. According to the CDC, RSV is the most common cause of lower respiratory tract infections in children younger than 1 year in the U.S. and worldwide.

MEDI8897 is a highly potent monoclonal antibody (mAb) that neutralizes RSV by binding the RSV fusion (F) protein expressed on virions and infected cells; it has been engineered to have a long half-life so that only one dose would be needed for the entire RSV season. It is being developed for the passive immunization of the infant population. MEDI8897 is currently being investigated in a Phase IIb study in preterm infants with plans for a Phase III trial in healthy full-term infants. MEDI8897 received fast-track designation from the U.S. FDA in 2015.

Sanofi Pasteur made an upfront payment of $140 million and will pay as much as $575 million in milestones. The two companies will share all costs and profits. MedImmune will continue to lead development up to the first approval, and AstraZeneca will retain MEDI8897 manufacturing activities. Sanofi-Pasteur will lead commercialization activities.

AI-driven drug discovery

Pushing the innovation envelope, Sanofi penned a nearly $300 million deal with Exscientia, a company at the forefront of artificial intelligence (AI)-driven drug discovery. The research collaboration will focus on the area of metabolic disease.

According to Exscientia, delivery of new therapies for metabolic disease, such as diabetes, is hampered by a paucity of single targets that are amenable to drug discovery. To address this challenge, it says it will apply its platform to identify and validate combinations of drug targets that could work synergistically and be amenable to its bispecific-small-molecule design strategy—where a small molecule is designed to be compatible with two distinct drug targets.

Starting with over a thousand disease-relevant target combinations, Exscientia will triage opportunities and prioritize those with promising bispecific binding potential. Target pairs fulfilling these initial tractability criteria will pass through to Exscientia’s lead-finding platform in order to generate bispecific-small-molecule compounds that can further validate the biological hypothesis. Bispecific small molecules passing all these quality gates may progress to full candidate delivery projects for Sanofi.

As part of this agreement, Exscientia will be responsible for all compound design, while chemistry synthesis will be delivered by Sanofi. Further assays, preclinical experiments and subsequent trials for compounds progressing to the clinic will be managed by Sanofi, where Sanofi exercises the license option.

Portfolio update

At the beginning of February 2018, Sanofi’s R&D pipeline contained 70 projects including 36 new molecular entities and novel vaccines in clinical development. Twenty-five projects are in Phase III or have been submitted to the regulatory authorities for approval.

In January 2018, Sanofi and Regeneron announced that they will accelerate and expand investment for the clinical development of the PD-1 (programmed cell death protein 1) antibody cemiplimab in oncology and dupilumab in Type 2 allergic diseases.

In the same month Sanofi and Alnylam announced a strategic restructuring of their RNAi therapeutics alliance to streamline and optimize development and commercialization of certain products for the treatment of rare genetic diseases. Sanofi will obtain global development and commercialization rights to fitusiran, an investigational RNAi therapeutic, currently in development for the treatment of people with hemophilia A and B. Alnylam will obtain global development and commercialization rights to its investigational RNAi therapeutics programs for the treatment of ATTR amyloidosis, including patisiran and ALN-TTRsc02.

Sanofi recently signed a clinical collaboration agreement with Roche to explore the role of atezolizumab in combination with isatuximab in certain solid tumors, reflecting scientific evidence that checkpoint inhibition by CD38 may reverse resistance to PD-L1.

In December a supplemental biologics license application for dupilumab (partnership with Regeneron) was submitted to the U.S. FDA for uncontrolled, persistent asthma for patients aged 12 and over.

At the end of 2017, the Phase III program evaluating efpeglenatide (partnership with Hanmi), a weekly GLP-1 agonist, in type 2 diabetes was initiated.

In December 2017, the FDA lifted the hold on clinical studies with fitusiran (an investigational RNAi therapeutic targeting antithrombin for the treatment of patients with hemophilia A and B; partnership with Alnylam), including the Phase II open-label extension (OLE) study and the ATLAS Phase III program.

Headcount: 113,816
Revenues: $35,633 (-1%)
Net Income: $9,782 (flat)
R&D: $5,449 (+2%)

TOP SELLING DRUGS 

Sanofi reported revenues of $35.6 billion for 2016, dropping it from number three last year ($40.4B) to number 6 this year, due mostly to the negative impact of foreign exchange rates. The year started with Paris-based Sanofi reorganizing its business, which now consists of the following five business units: Sanofi Genzyme, the specialty care business that includes multiple sclerosis, rare diseases, and oncology; Diabetes and Cardiovascular; Generic Medicines and Emerging Markets; Consumer Healthcare; and Sanofi Pasteur, or the Human Vaccines segment. On January 1, 2017, Sanofi and Boehringer Ingelheim completed the exchange of Merial, Sanofi’s animal health business and Boehringer Ingelheim’s consumer healthcare business.

Strengthening biologics footprint

Sanofi grew its biologics footprint during the year through research collaborations and facility expansions. With Global Genomics Group (G3) it entered into a research collaboration to identify new signaling pathways and targets involved in coronary artery disease. The companies will use G3’s platform with data from its G3LOBAL Database to further decipher the molecular underpinnings of LDL-cholesterol regulation and to better understand which patients may benefit from interference with these signaling pathways.

In a deal with Jubilant Biosys Ltd, a Bengaluru-based subsidiary of Jubilant Life Sciences Ltd., Sanofi Deutschland GmbH, entered a strategic alliance to discover and develop small molecule inhibitors for multiple targets in metabolic disorders. The research alliance aims to develop therapeutic small molecules that will address the unmet needs in diabetes and obesity. Jubilant will provide drug discovery and early development services across computational, synthetic chemistry, biology, GLP/ GMP services, to identify lead candidates and demonstrate clinical proof of mechanism. The research for the projects take place at R&D labs of Jubilant Biosys and Jubilant Chemsys in Noida, India.

Sanofi and Innate Pharma entered a research collaboration and licensing agreement to apply Innate Pharma’s new proprietary technology to the development of innovative bispecific antibody formats engaging natural killer (NK) cells to kill tumor cells through the activating receptor NKp46. Both companies will work together on the generation and evaluation of up to two bispecific NK cell engagers, using technology from Innate Pharma and Sanofi’s proprietary bispecific antibody format as well as tumor targets. Sanofi will be responsible for the development, manufacturing and commercialization of products resulting from the research collaboration. Innate Pharma will be eligible to receive as much as $450 million in development and commercial milestone payments, as well as royalties on net sales.

Recursion Pharmaceuticals entered a research agreement with Sanofi Genzyme to deploy its drug repurposing platform to identify new uses for Sanofi’s clinical stage molecules across dozens of genetic diseases. Recursion generates human cellular models of many diseases and uses computer vision to extract thousands of morphological measures at the level of individual cells. Molecules are then screened for their ability to rescue phenotypic defects associated with each disease. Recursion has already used the platform to generate an internal pipeline of candidates for a handful of genetic diseases, with a lead asset nearing IND for the treatment of Cerebral Cavernous Malformation. Sanofi will provide Recursion with a number of small molecules, and Recursion will screen these molecules across its extensive and rapidly expanding library of genetic disease models. Sanofi Genzyme will have the option to develop products targeting any new indications identified.

Warp Drive Bio, a life sciences company developing therapeutics that exploit the molecules and mechanisms of nature, during the year reached a milestone in the antibiotic discovery program under its research collaboration with Sanofi. Sanofi assumed all preclinical and clinical development efforts for the novel aminoglycoside antibiotic candidates discovered by Warp Drive. This program is one of several natural product-based programs utilizing Warp Dive’s Genome Mining technology platform.

The Biomedical Advanced Research and Development Authority (BARDA), within the Office of the Assistant Secretary for Preparedness and Response in the U.S.

Department of Health and Human Services, awarded Sanofi a $37.6 million contract to supply and manage inventory for Leukine. Sanofi Genzyme is developing Leukine for the treatment of acute radiation syndrome, a serious illness that occurs in people exposed to high doses of radiation. In 2013, Sanofi was awarded a $36.5 million contract for late stage development and procurement of Leukine. Since then Sanofi Genzyme has conducted studies regarding the potential use of Leukine in patients acutely exposed to myelosuppressive doses of radiation (Hematopoietic Syndrome of Acute Radiation Syndrome). The company plans to submit a supplemental Biologics License Application (sBLA) to the FDA this year.

Sanofi also unveiled plans to develop and commercialize biologics in China through a partnership with JHL Biotech, a biopharma company with development and manufacturing facilities in Wuhan and Taiwan. The two companies entered a strategic alliance to develop and commercialize biologics in China with potential international expansion.

As part of the deal, Sanofi invested $80 million in newly issued JHL shares and paid $21 million upfront to acquire exclusive rights for the proposed biosimilar of Rituximab and options to certain JHL pipeline products. JHL will lead the development, registration, and manufacturing activities, while Sanofi will lead commercialization efforts in China. JHL is entitled to receive milestones of as much as $236 million and sales royalties.

Headcount: 115,631
Revenues: $40,486 (-1%)
Net Income: $8,053 (+8%)
R&D: $5,863 (-5%)

TOP SELLING DRUGS  

After a bit of a turbulent close to 2014 that saw the ouster of former chief executive officer Chris Viehbacher, who was fired amid whistleblower lawsuit claims that the company was involved in a kickback scheme, Sanofi brought in Olivier Brandicourt as the new chief executive to right the ship. With nearly 30 years experience in the pharma industry and the former chair of Bayer Healthcare’s management board, Mr. Brandicourt led the French pharma giant to $40.5 billion in revenue in 2015.

Pharmaceutical segment sales rose by 7.5% and includes Genzyme operations as well as a broad range of prescription medicines, generic medicines, and consumer health products.

Sales for the diabetes division were down nearly 7% mainly due to lower sales of Lantus in the U.S., where sales dropped 17%. Outside the U.S., the division posted 9% growth driven by emerging markets, which were up 16%. Western Europe posted more modest sales growth of 3% due to the entry of a biosimilar of insulin glargine into the market in the second half of the year. As a result, sales for the glargine franchise, which includes Lantus and Toujeo, a new-generation basal insulin launched in 2015, fell by 8.5%.

In the oncology business sales were down 1.9%. The company says solid performances from Jevtana and Mozobil were offset by the impact of generic versions of Taxotere in Japan. Sales of Jevtana were up 9.5% driven by a strong performance in the U.S. and Japan, where the product was launched in September 2014. Mozobil sales were up 16% mainly on sales growth in the U.S. Taxotere saw net sales fall sharply by 22% because the product is facing competition from generics in emerging markets and in Japan.

The Genzyme business posted sales growth of nearly 30% driven by a solid performance from the multiple sclerosis franchise. Aubagio sales surged by 78% while the ongoing launch of Lemtrada continued to yield very positive results.

Sales for the consumer health care business rose by 3% on strong sales from Allegra OTC in the U.S. following the launch of a new formulation. The generics business posted sales growth of 7.6% in 2015 driven by increased sales of the authorized generic of Lovenox.

In 2015, net sales for the Vaccines segment, which includes the Sanofi Pasteur MSD joint venture with Merck, were up 19%.

Within the vaccines segment sales of Polio/Pertussis/Hib vaccines rose by 8% boosted by the performances of Pentaxim and Hexaxim. Sales in emerging markets grew strongly by 33% due to sales of Pentaxim and polio vaccines in China.

Sales of influenza vaccines rose by 2% with strong growth in the U.S., while in emerging markets sales declined by 15%. Sales of meningitis/pneumonia vaccines climbed 17%. Adult booster vaccines net sales increased by 10%.

Innovation alliances

In 2015 Sanofi announced a number of strategic alliances designed to drive product innovation and business growth. On the cancer front, Regeneron Pharmaceuticals and Sanofi entered into a immuno-oncology global collaboration to discover, develop and commercialize new antibody cancer treatments. The companies will jointly develop a programmed cell death protein 1 (PD-1) inhibitor currently in Phase I and plan to initiate trials in 2016 with new preclinical therapeutic candidates. Regeneron received a $640 million upfront, and the companies will invest $1 billion for discovery through proof of concept/Phase IIa of monotherapy and novel combinations of immuno-oncology antibody candidates to be funded 25% by Regeneron ($250 million) and 75% by Sanofi ($750 million). The companies have also committed to equally fund an additional $650 million for development of REGN2810, a PD-1 inhibitor. Also, Sanofi will pay Regeneron a one-time milestone of $375 million should sales of a PD-1 product and any other collaboration antibody exceed $2 billion in any consecutive 12-month period.

In another cancer deal, Sanofi and BioNTech A.G. entered into a multi-year exclusive collaboration and license agreement to discover and develop as many as five cancer immunotherapies, each consisting of a mixture of synthetic messenger RNAs (mRNAs).

BioNTech received $60 million in upfront and near-term milestone payments, and is eligible to receive more than $300 million in development, regulatory and commercial milestones per product, as well as royalties on sales. Also, BioNTech has the option to co-develop and co-commercialize two of the five mRNA therapeutics products with Sanofi in the EU and U.S.

Leveraging Sanofi’s global oncology footprint and scientific expertise, BioNTech will combine the use of its mRNA technology platform to develop immune-stimulating pharmaceuticals. As part of this effort, BioNTech will utilize its mRNA formulation technology, which enables targeted mRNA delivery in vivo, to generate novel cancer immunotherapies. BioNTech will also supply part of the mRNA material needed for development activities from its GMP manufacturing unit.

Also in the field of cancer research, Evotec AG and Apeiron Biologics AG, a biotech company with a focus on immunological approaches to treat cancer, formed a strategic collaboration with Sanofi to develop novel small molecule-based cancer immunotherapies.

This collaboration includes major research and development efforts to advance a first-in-class small molecule approach to treat solid and haematopoietic cancers by enhancing the anti-tumor activity of human lymphocytes. Based on Evotec’s technological expertise and Apeiron Biologics’ immunological know-how, the collaboration will also focus on the identification of novel small molecule hits and their targets for next-generation therapies in immuno-oncology, which are expected to complement the current offerings of checkpoint inhibitors.

The collaboration is set up as an initiative to support long-term pipeline building for Evotec, Apeiron Biologics and Sanofi. All three companies will make contributions to this collaboration in terms of scientific expertise, technological platforms and resources.

The agreement triggers two years of research payments for Evotec and Apeiron Biologics with the opportunity to receive preclinical, clinical, regulatory and commercial milestones which could total over €200 million as well as royalties upon commercialization.

Evotec and Sanofi also formed a collaboration in the field of diabetes. The goal of this collaboration is to develop a beta cell replacement therapy based on functional human beta cells derived from human stem cells. In addition, Sanofi and Evotec will also use human beta cells for high-throughput drug screening to identify beta cell active small molecules or biologics. The agreement triggers an upfront payment of €3 million, potential preclinical, clinical, regulatory and commercial milestones, which could total over €300 million as well as significant royalties and research payments.

Also in diabetes, Sanofi and Lexicon Pharmaceuticals entered into a collaboration and license agreement for the development and commercialization of sotagliflozin, an investigational new oral dual inhibitor of sodium-glucose cotransporters 1 and 2 (SGLT-1 and SGLT-2), which could be a potential treatment option for people with diabetes. The developmental medicine sotagliflozin (LX4211) is currently being studied in two Phase III trials in type 1 diabetes, which are expected to report top-line results during the second half of 2016. Phase III trials in type 2 diabetes are expected to begin in 2016.

Sotagliflozin could have the potential to become an important option among oral anti-diabetic medicines and provide a strong rationale for the further investigation of this compound as a treatment for people with diabetes. Lexicon received an upfront payment of $300 million and is eligible to receive development, regulatory and sales milestone payments of up to $1.4 billion. Lexicon is also entitled to tiered, escalating double digit percentage royalties on net sales of sotagliflozin.

During the year Adimab entered a multi-target discovery and optimization collaboration with Sanofi to use its platform to generate bispecific molecules against multiple targets. Sanofi has the right to develop and commercialize any resulting therapeutic antibodies and bispecifics. Adimab receives an undisclosed upfront payment, research fees and technical milestones. Also, for each target, Sanofi will have the option to exclusively license antibodies and bispecifics generate during the collaboration, at which point, Adimab would receive license fees, clinical milestones and royalties on product sales.

Sanofi and Boehringer Ingelheim entered an alliance to extend Sanofi’s manufacturing capacity network for therapeutic monoclonal antibodies. Boehringer’s cell culture operations will provide contract manufacturing capacities to support the production of Sanofi’s biologics pipeline. Under the agreement, Sanofi will have access to Boehringer’s capabilities to transfer and manufacture therapeutic monoclonal antibodies for global market supply. Initial product transfers will begin in early 2015.

Sanofi also entered into a collaboration with Catalent Pharma Solutions to implement Catalent’s SMARTag technology in the development of next generation antibody-drug conjugates (ADCs). Catalent will develop site-specifically modified antibody conjugates using Sanofi’s antibodies, enabling Sanofi to evaluate site selective payload conjugation in order to enhance ADC pharmacokinetics, efficacy and safety. The collaboration involves teams at Sanofi and Catalent’s facility in Emeryville, CA.

Headcount: 110,000
Revenues: $41,047 (+3%)
Net Income: $8,322 (+2%)
R&D: $5,863 (+1%)

TOP SELLING DRUGS

Sanofi recorded good sales performance across its various businesses in 2014. The French pharma giant has seven growth platforms: diabetes solutions, human vaccines, innovative drugs, consumer healthcare, emerging markets, animal health and the new Genzyme. Group sales were up 3% to $41,047 million. The Pharmaceuticals segment grew 4.4%, driven by Diabetes and Genzyme. Vaccines increased 7.2% and Animal Health grew 6.7%. Emerging markets sales delivered 9.3% growth.

New Wave of Innovation

Sanofi reported a lot of progress on multiple new product launches. It said during the year it expects to launch high-potential new medicines and vaccines at an accelerated pace beginning in 2014. As many as 18 new launches are expected during the next 7 years with the potential to generate cumulatively more than €30 billion within the first five years of sales, confirming the strong momentum of the company’s R&D pipeline and ability to deliver new therapies across a range of therapeutic categories.

This year Sanofi says it has the potential to launch six new medicines in 2015 and approximately one new medicine every six months between 2016 and 2018. These new medicines have the potential to help address areas of need in rare diseases, cardiovascular care, diabetes, immunology and public health.

Nine new medicines and vaccines are being touted. For rare diseases Cerdelga (eliglustat) is the only FDA-approved, first-line oral therapy for certain adult Gaucher Disease Type 1 patients. For multiple sclerosis Lemtrada (alemtuzumab) is an FDA-approved treatment for adult patients with active relapsing remitting multiple sclerosis who have had an inadequate response to two or more MS therapies. For cardiovascular disease Praluent 3 (alirocumab) is an investigational monoclonal antibody targeting PCSK9 (proprotein convertase subtilisin/kexin type 9) with the potential to transform LDL-cholesterol management and was developed in collaboration with Regeneron.

For diabetes Toujeo (insulin glargine [rDNA origin] injection, 300 U/mL) is a new investigational basal insulin currently under review by the US and EU regulatory agencies; Afrezza (insulin human) is a new, FDA-approved, rapid-acting inhaled insulin therapy for adults with type 1 and type 2 diabetes; and Lixilan is an investigational fixed-ratio combination of insulin glargine, the leading basal insulin, with lixisenatide, a GLP-1 receptor agonist, in a single daily injection for the treatment of adults with type 2 diabetes.

In Diabetes, despite the potential impact of the U.S. basal insulin market dynamics on Lantus sales, Sanofi expects its global Diabetes sales to be flat to slightly growing from 2015-2018. This assumes a substantial conversion of patients from Lantus to Toujeo in the U.S. and Europe, continued growth of its diabetes products in Emerging Markets, the U.S. launches of Affreza, Lyxumia and LixiLan.

On the new vaccines front, Dengue Vaccine is Sanofi Pasteur’s dengue vaccine candidate with demonstrated efficacy across all dengue serotypes and a favorable safety profile in two Phase III studies, after 25 months active surveillance period. Regulatory submissions are planned in 2015.

For immunology and inflammation, Sarilumab is an investigational fully human monoclonal antibody targeting the IL-6 receptor (IL-6R) that was developed in collaboration with Regeneron and is currently being studied in patients with rheumatoid arthritis (RA). Dupilumab is an investigational fully human monoclonal antibody that blocks IL-4 and IL-13 signaling and was also developed in collaboration with Regeneron. It entered into Phase III in adults with moderate-to-severe atopic dermatitis. Positive results were also recently announced with dupilumab in a Phase IIb trial in adult patients with uncontrolled, moderate-to-severe asthma, and in Phase IIa trial in chronic sinusitis with nasal polyps.

Other new advances in the R&D pipeline include Revusiran, for the treatment of familial amyloidotic cardiomyopathy, which entered Phase III development during the year. The company says the launch of new medicines and vaccines in these therapeutic areas and the sustained performance of Sanofi’s other growth platforms is expected to continue to further reduce the relative contribution of Lantus to the group’s overall performance.

Key Events

Sanofi recorded several notable transactions during the year. Sanofi and Eli Lilly entered an agreement to pursue regulatory approval of OTC Cialis (tadalafil) for the treatment of men with erectile dysfunction (ED). Sanofi will gain exclusive filing and marketing rights to Cialis OTC in the U.S., Europe, Canada and Australia upon approval. Cialis had worldwide sales of $2.16 billion in 2013.

Sanofi and Transgene SA have begun construction of the manufacturing platform for the production of a new class of APIs called viral vectors, including Transgene’s MUC1 targeted cancer immunotherapy, TG4010. In March 2013, the companies entered a long-term collaboration to build the unit, which will be located at Genzyme’s Polyclonals site in Lyon, France. The companies will invest approximately €10 million in the production unit during a two-year period. This dedicated platform will be Sanofi’s exclusive property. Sanofi, through its Genzyme Polyclonals site, will act as Transgene’s contract manufacturer and Transgene will be considered a preferred customer of the platform through 2028.

Transgene is an innovative biopharmaceutical company developing new drugs. The state-of-the art industrial platform will be dedicated to production of viral vectors through a broad range of technologies including mammalian cell culture up to 1m3 using single use bioreactors, combining the excellence of Genzyme, Sanofi-pasteur, and Transgene in Lyon area. Sanofi will bring to Transgene its know-how in bioproduction and experience to launch biologics.

Sanofi and MannKind Corp. entered into a worldwide exclusive licensing agreement for the development and commercialization of Afrezza (insulin human) Inhalation Powder, a new rapid-acting inhaled insulin therapy for adults with type 1 and type 2 diabetes. The companies planned to launch the drug in the U.S. in 1Q15. Sanofi is responsible for global commercial, regulatory and development activities and MannKind will manufacture Afrezza at its facility in Danbury, CT. The companies are also planning to expand global manufacturing capacity as needed.

MannKind received an upfront payment of $150 million and potential regulatory and development milestones of as much as $775 million. Sanofi and MannKind will share profits and losses on a global basis, with Sanofi retaining 65% and MannKind receiving 35%.

Sanofi and MyoKardia formed a worldwide collaboration to discover and develop first-of-its-kind targeted therapeutics for heritable heart diseases known as cardiomyopathies, the most common forms of heart muscle disease. The collaboration builds upon MyoKardia’s pioneering science, which hopes to correct the disruptive effects that disease mutations have on heart muscle contraction.

The collaboration, representing one of the largest research and development commitments to genetic forms of cardiomyopathy, encompasses three MyoKardia programs. Two of these programs are focused on hypertrophic cardiomyopathy (HCM) and the other is focused on dilated cardiomyopathy (DCM). The collaboration provides up to $200 million in equity investments, milestone payments and research and development services through 2018, of which $45 million has already been received in an upfront licensing fee and an initial equity investment. In addition, Sanofi and MyoKardia will equally share development costs on the HCM programs following initial demonstration of efficacy in patients, with Sanofi fully covering the development costs of the DCM program.

The collaboration is an outgrowth of Sanofi’s Sunrise initiative, a strategic partnership model that seeks to invest in early stage opportunities that align with Sanofi’s expert development and commercialization abilities.

Evotec AG and Sanofi entered negotiations for a five-year strategic alliance comprised of three major initiatives focused on improving innovation effectiveness in drug discovery and preclinical development. Sanofi will commit €250 million under the alliance. A pipeline-building collaboration will initially focus on oncology, where Evotec will accelerate drug discovery projects to the point of preclinical development candidates, at which point Sanofi may take over development. Evotec will license a portfolio of projects from Sanofi, including five well-advanced preclinical projects in oncology that will jointly be progressed to IND.

Also, under a French academic bridge program, Evotec will continue to expand its Cure X/Target X business model to leverage scientific expertise and a portfolio of drug development services to capitalize on the most promising science. Sanofi will fund this initiative and may support individual projects through this program.

Furthermore, an outsourcing alliance will include the acquisition of Sanofi’s drug discovery operations in Toulouse to build a European center of excellence for compound management and drug discovery services. To meet capacity needs, Evotec will expand its capabilities by integrating a scientific and technological facility with more than 200 experienced scientists from Sanofi’s Toulouse research site, which is a small molecule discovery site, into its global drug discovery platform that would cover early-stage discovery and preclinical process from screening to medicinal chemistry.

Evotec will manage Sanofi’s global screening compound library as well as provide a range of drug discovery services for Sanofi for the period of the contracts. Lastly, an open innovation initiative will offer combined libraries, which will be made available for screening to Evotec’s partners. The Sanofi library, with more than 1,000,000 compounds, will expand Evotec’s library of more than 400,000 compounds, creating a large drug discovery source. Evotec will screen the libraries against collaborators’ targets under pre-agreed terms from which Sanofi will receive a contribution if a product is developed from a library hit.

Headcount: 110,000
Pharma Revenues: $45,360 (-6%)
Net Income: $9,160 (-18%)
R&D Budget: $6,534 (-3%)

TOP SELLING DRUGS

Sanofi was hard hit by the patent cliff, with several of its most profitable drugs losing patent protection over the past few years. However, by the end of 2013, the company had returned to growth and profitability. Earnings per share were expected to be 4-7% higher this year than last year.

In 2013, the company had seven drug approvals. At that point, 85% of its €2 billion cost reduction program had been achieved, and over half the savings channeled into late stage clinical trials and new innovation platforms.  The company has restructured its U.S. businesses. This year, Sanofi expects most of its savings to come from improvements in manufacturing.

The company acquired the Cambridge, MA-based orphan drug specialist Genzyme in 2011, just around the time that the company entered into a consent decree with FDA for cGMP problems at its Allston, MA facility. Since then, Genzyme has turned performance around at the facility and revised quality systems and, as a presentation at BIO 2014 last month (story, p. 109) suggested, the facility is becoming an example of operational excellence.

Perhaps reflecting Genzyme’s strategic importance to the company (or could be the fact that one of his kids reportedly goes to college there?), Sanofi’s CEO Chris Viehbacher made French headlines recently when he left France to live in the Boston area, where other key executives including R&D president Elias Zerhouni, and chief strategy officer David-Alexandre Gros, reportedly also reside.

The company sees its top growth platforms as: emerging markets, diabetes treatment, vaccines, consumer heathcare, orphan drugs via Genzyme, and animal health. Its diabetes products grew by 19% last year, and Genzyme products and MS treatments, by 31%. Altogether, its growth platforms now account for 73% of sales, compared to 43% in 2008, the company’s managers report.

FDA recently approved Kynamro (mipomersen sodium), an orphan drug developed by the antisense technology specialist, Isis Pharma, to treat the rare but fatal disease, homozygous familial hypercholesterolemia (HoFH). Sanofi recently resubmitted its multiple sclerosis (MS) treatment, Lemtrada (alemtuzumab) to FDA for review. Late last year, regulators had rejected its first application, saying that there was insufficient evidence of a positive risk-benefit profile. Aubagio is another of Sanofi’s MS drugs.

The company also released clinical data for its investigational diabetes treatment Toujeo (insulin glargine [rDNA origin] injection, 300U/mL), which reportedly showed better results compared with its blockbuster diabetes drug, Lantus.

It faces competition from Abasria, a biosimilar version of Lantus that is being developed by Eli Lilly and Boehringer-Ingelheim, and is reported to have shown positive results in the clinic. Lilly is also working on peglispro, a long-lasting form of insulin, and dulaglutide, while Novo Nordisk is expected to launch its combination diabetes drug, IDegLira, soon.

DRUG/DEVICE COLLABORATION IN TYPE 2 DIABETES

Sanofi is strengthening its position in diabetes treatment via a collaboration with the device manufacturer Medtronic that would lead to new drug-device combinations and delivery of care management services for Type 2 diabetes. A single injection diabetes treatment, which would be taken daily using a disposable pen-type device, is in Phase III testing. LixiLan, a combination of insulin glargine and lixisenatide, would target patients who have trouble controlling their blood insulin levels using traditional therapies.

While competing with Lilly in diabetes treatment, Sanofi has acquired rights to sell Lilly’s erectile dysfunction treatment, Cialis, over the counter.

The company reports that 45% of its sales come from biologics and 80% of the compounds in its pipeline are biologics.

The company has 23 compounds in Phase I, four of them vaccines, four for ophthalmology, three for rare diseases. It has 14 in Phase II testing, three for oncology and four for immune-medicated diseases, with another three, vaccines. It also has 11 compounds, six of them vaccine, in Phase III testing.

Several compounds in advanced-stage research have shown positive results, such as sarilumab, which it developed with Regeneron Pharmaceuticals using its Velocimmune antibody technology. The drug would treat rheumatoid arthritis sufferers who have not responded to methotrexate therapy. Last month, the companies released positive clinical trial results for the drug.  Sanofi also moved to increase its stake in Regeneron from 20.5 to 22.5%.

One of its developmental vaccines would prevent dengue fever, a major health problem in Latin America and Asia that puts 2.5 billion people at risk and affects 100 million people each year. Phase IIb testing in around 4,000 children showed good results against one strain, and a global Phase II program is now going on involving 31,000 children and adolescents. Results are expected later this year.

Another vaccine would prevent Clostridium Difficile infections. A multinational Phase III program started last year, and is expected to be completed by the end of 2017. FDA’s CBER designated this a fast track development program.

Like a select few Big Pharma companies, Sanofi is stepping up research into ways to counteract microbial resistance. Early this year, Sanofi and the Fraunhofer Institute’s Institute for Molecular Biology and Applied Ecology, established a Natural Product Center of Excellence in Germany to develop new and naturally occuring chemicals or biological compounds as potential antibiotics.

Through Genzyme, the company invested $700-million in the small interfering RNA (SiRNA) specialist, Alnylam, which bought Merck & Co.’s Sima Therapeutics and its SiRNA platform. RNA interference technology could help develop new cancer drugs, antivirals and other compounds.

Marc Bonnefoi, head of Sanofi’s North American R&D Hub, summarized the company’s approach to R&D in an interview on the Collaborate/Innovate Challenge blog (http://www.collaborateinnovate.com/blog/rd-at-sanofi-why-involving-the-patient-is-critical-to-future-success/). The Challenge is designed to reward innovation in drug development and healthcare, and a number of Sanofi executives serve as judges.

“For many years, we had a drug in search of a patient. We screened scores of molecules to see if they had any effect on different models of medical conditions,” Bonnefoi said. “Today, we begin with an understanding of the underlying cause of a given disease and work to develop a solution to interfere with that process. We are trying to integrate a translational approach to our R&D efforts, applying the knowledge from patient populations much earlier in our drug discovery and development processes and identifying earlier indicators of whether or not a potential treatment will be successful. We are truly putting the patient first in all of our R&D efforts so that a new product has medical value as well as scientific value.” That approach promises to bear fruit, for the company and the industry.

Headcount: 111,974
Pharma Revenues: $38,259 (-3%)
Total Revenues: $44,928 (-3%)
Net Income: $6,603 (-20%)
R&D Budget: $6,328 (-6%)

Top Selling Drugs*

Account for 62% of total pharma sales, up from 61% in 2011

Currency fluctuation giveth, and it taketh away. Last year, a strong Euro pushed Sanofi ahead of Merck for the #3 spot in our ranks. This year, an 8% drop in the value of the Euro makes Sanofi’s performance look worse than it was. Pharma revenues actually grew 5% last in constant exchange rates (CER), to nearly €30 billion. Still, we’re fickle taskmasters here at Contract Pharma, so Sanofi is officially the #4 company in our 2012 list.

Much of Sanofi’s growth came from the world’s best-selling diabetes drug, Lantus, which added €1 billion in revenues last year (+26% in CER). Sanofi caught a break in February 2013 when Novo Nordisk’s Lantus competitor, Tresiba, received a complete response letter from the FDA, in which the agency asked for an outcomes trial. That move could keep Tresiba out of the U.S. market for years, and Sanofi will be the prime beneficiary.

Lantus’ gains, along with revenues from the Genzyme acquisition, have helped offset the slower-than-expected generic erosion of Plavix. Sanofi received much lower royalties from BMS for Plavix and Avapro sales in the U.S., but Sanofi’s Plavix revenues were slightly up in Euros, from €2040 to €2066. Sanofi’s Plavix revenues dropped 6% in 4Q12 and 11% in 1Q13, while Sanofi’s Avapro/Aprovel sales dropped 34% and 21% in those quarters, respectively. Meanwhile, sales of cancer treatment Eloxatin cratered in 1Q13, falling 85% to $78 million. Without that drop, Sanofi’s top products would have had a flat quarter, instead of an 8% fall.

Along with the erosion of Plavix sales, Sanofi is also out $53 million, after France’s antitrust authority fined the company for disparaging Plavix generics. Teva complained that Sanofi engaged in a “strategy of denigration” against its generic entry in 2009. Sanofi projects that it will lose $1.1 billion in earnings (sales plus royalties from BMS) for Plavix in the first half of 2013.

We’ve covered Sanofi’s plans to move into the post-Plavix era previously: buy Genzyme, do heavy-duty internal/external R&D, grow in emerging markets, vaccines, generics and animal health, and, of course, make cost cuts. No major restructuring programs were announced in the past year, but the company did reveal its plans to consolidate its operations in its home country of France in September 2012. R&D operations in general were tabbed to grow or be maintained, while industrial vaccine operations would have to “improve [their] economic performance.” Sanofi hopes for 900 voluntary retirements by 2015 as part of “streamlin[ing] support functions to respond to the Group’s diversification and improve their efficiency.”

Shortly before press time, Reuters reported that Sanofi plans to drop 207 jobs in France, the net result of 376 layoffs and 169 new job openings on the R&D side. That news source said that union documents showed a net loss of 445 employees being at the Sanofi Pasteur vaccine unit (754 layoffs and 309 new roles), and another 243 jobs cut from its animal health and generic businesses. Saofi would not confirm those figures.

The fate of Sanofi’s research site in Toulouse has been up for debate, after Sanofi announced it would move anti-infectious research there to a site in Lyon. In May 2013, the company reported that it will look at spin-offs, local startups and “creation of a technological platform to provide services for Sanofi and other biotechnological or pharmaceutical companies” at the site.

In September 2012, Sanofi got FDA approval for Aubagio, the oral multiple sclerosis treatment that came over with the purchase of Genzyme. That treatment, caught between Novartis’ established Gilenya and Biogen Idec’s potential mega-hit Tecfidera, may not reach blockbuster status. Initially, the EMA voted that Aubagio doesn’t count as a New Active Substance, which would put the drug at risk of generic exposure as soon as 2016. Sanofi requested a review of that decision and, shortly before press time, the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) reversed that decision. The move gives Sanofi eight years of data exclusivity and two more years of market exclusivity from the date of approval.

The company is still waiting for approval for MS treatment Lemtrada, the future of which was a point of contention during negotiations to buy Genzyme. Analysts aren’t too high on Lemtrada’s prospects, arguing that newer MS drugs may overtake its benefits. CHMP recommended it for approval based on a pair of Phase III trials comparing it to Rebif.

One of Sanofi’s biggest drug approvals was for a product with a limited patient base. In January 2013, the FDA approved Kynamro, a cholesterol treatment co-developed with Isis, to help reduce bad cholesterol in patients with homozygous familial hypercholesterolemia (HoFH). There are only a few hundred people in America with HoFH, but what’s significant is that Kynamro is the it uses antisense, a gene silencing technique that’s been long promised to transform drug development. Only one antisense drug has been approved before this one, and Kynamro stands a chance at becoming the first commercially successful one.

Sanofi also made news with the approval of Zaltrap, a colorectal cancer treatment. However, it wasn’t the sort of news the company wanted. Several months after the August 2012 approval, doctors at Memorial Sloan-Kettering Cancer Center lambasted the drug’s pricing, contending that it was twice as high as that of Avastin, while not appreciably better when adjusted for dosage size. Within a week, Sanofi offered an effective 50% discount on Zaltrap in the U.S.

Sanofi’s partner on Zaltrap is Regeneron, a 25-year-old pharma firm (and the newest addition to our Top 10 Biopharma ranks, thanks to the sales of Eylea in 2012). The companies are also collaborating on dupilumab, a biologic treatment for asthma (and other indications) that may revolutionize treatment of that illness, as well as other programs. In February 2013, Sanofi informed Regeneron of plans to raise its equity stake in the company; it currently holds 17% of shares and but has an agreement in place not to acquire more than 30%.

In June 2013, the FDA approved the sBLA for Sanofi’s four-strain influenza vaccine, Fluzone Quadrivalent, in people age six months and older. The new vaccine will include two A strains and two B strains to protect against variations in flu seasons.

Not all the R&D results have been positive. Also in June 2013, Sanofi threw in the towel on a pair of Phase III candidates, iniparib for non-small cell lung cancer, and otamixaban, an anticoagulant. Sanofi said it would take a $285 million charge to write down iniparib, but didn’t mention costs related to otamixaban.

For now, Sanofi’s pharma fortunes are tied to Lantus and its successor, Lyxumia, which was approved in Japan shortly before press time. If the latter doesn’t suffer the same fate as Novo Nordisk’s Tresiba, Sanofi may gain some much needed breathing room as it passes by its patent cliff.

Acquisition News
Target: Genfar
Price: Not disclosed; Genfar had sales of $133 million in 2011
Announced: October 2012
What they said: “With this acquisition, Sanofi has a unique opportunity to strengthen its presence in Latin America through a large portfolio of affordable pharmaceuticals in a broad range of markets in the Andean countries and Central America.”

—Heraldo Marchezini, senior vice president of Latin America, Sanofi

Lowe Down
So now that Genzyme’s pretty well digested, and now that the nasty patent expirations have hit, what is the Sanofi we see before us? The biggest company on the French stock exchange is still going around telling investors that they’re undervaluing their drug portfolio. That’s even with the Regneron PCSK9 inhibitor in Phase III, putting Sanofi in good position to be first to market in what could a crowded space (it’s been a while since there was a big new mechanism in atherosclerosis). They’re still talking about looking around for deals, but then again, so is everyone else, so deals are correspondingly harder to come by and more expensive.

You can tell that they’re trying to make the most of what they have already: the company’s doing such an aggressive job with the pricing of its current drugs that the European health systems are starting to push back. All this seems to point to a quiet period at the company for the next year or two, while they tend to their own pipeline, cultivate the Genzyme stuff (and the biologic/vaccine portfolio in general), and perhaps do a small acquisition here or there. Genzyme was enough of a meal for any python of this size.

—Derek Lowe

Outsourcing News
In Reverse-Outsourcing News, Sanofi will serve as the CMO for Transgene’s immunotherapy products. The work is expected to begin in 1Q15 at Sanofi/Genzyme’s Polyclonals site in Lyon, France. Sanofi will produce clinical and commercial batches and Transgene will be a preferred customer of the commercial manufacturing platform for 15 years. The companies will invest a combined $13 million in a manufacturing suite at the Lyon site.

In March 2013, Sanofi also signed a pact to produce API for a biologic for DBV Technologies. The company will provide scale-up, process validation, and commercial scale supply of Viaskin, a therapeutic protein delivery system.

Headcount: 100,000

Pharma Revenues :$37,403 (-4%)

Total Revenues: $40,347 (-1%)

Net Income: $7,597 (-4%)

R&D Budget :$5,844 (-9%)

Top-Selling Drugs in 2010

Account for 56% of total pharma sales, down from 57% in 2009.

Sanofi’s total vaccine sales were $5.0 billion in 2010, up 4% from last year. Vaccines comprised 14% of total sales, up from 12% in 2009. Sanofi earned $1.7 billion (+16%) from influenza vaccines, driven by pandemic flu fears. Revenues from pediatric combination and polio vaccines fell 3% to $1.3 billion, meningitis/pneumonia vaccines fell 7% to $700 million, and adult and adolescent boosters rose 5% to $596 million for the year.

PROFILE

Sanofi was the first company to drop in last year’s ranks, falling from #2 to #4 as generics offset the growth in its pharma revenues. (The 5% drop in the value of the Euro against the dollar didn’t help, either, but even at a constant exchange rate, its 1% growth rate would have left it behind Merck at #3.) Sanofi saw significant losses from generics of Lovenox, Plavix, Ambien and Allegra; sales of its top 11 drugs fell a combined $1.2 billion for the year. Eloxatin also saw a steep revenue drop in 2010, but its generics were ordered off the market by U.S. court in June 2010, giving Sanofi breathing room for that colon cancer treatment until August 2012.

Things got so tough for Sanofi that I thought the company had lost the patent to the name “Aventis,” but it turns out the management just decided to shorten the name in May 2011. The company also adopted a new logo, “The Bird of Hope.” It’d be too easy to make a joke about that, so I’m going to pass. Just this one time.

Sanofi’s diversification strategy in consumer health, vaccines, emerging markets and diabetes treatment gave it a buffer for the first wave of generic erosion, but those major drugs still have a lot of revenue to lose. A one-time (we hope) boost for H1N1 pandemic influenza vaccine helped in 2010, but the absence of a pandemic this year means a big drop  in 2011 revenues.

We all know that pharmaceuticals are where the money and the margins are, so Sanofi responded to its declining fortunes and relevance in a time-honored tradition: mega-merger!

In August 2010, the company made its first advances on Genzyme, with the intention of adding a rare diseases growth platform (and around $4.0 billion in existing revenues). Negotiations dragged on for months, with Genzyme’s management holding out to get fair value for Lemtrada, an MS treatment. In a bizarre misstep before the Genzyme news went public, Sanofi chief executive officer Christopher Viehbacher mentioned that he had around $20.0 billion to spend on acquisitions. Sanofi’s initial bid for Genzyme was $18.5 billion.

The deal finally wrapped in April 2011, at a value of $20.1 billion. The companies negotiated some contingent value rights (CVR) for the deal, mostly centered on Lemtrada (there are also CVRs related to Genzyme fixing its manufacturing problems). The CVRs for Lem-trada extend to 2020, and their top tier is tied into Lemtrada revenues greater than $2.8 billion over the course of four consecutive quarters, reflecting the optimism of Genzyme’s management.

Sanofi has said that it plans to keep Genzyme as a standalone unit; I never believe those statements, but we’ll see if it holds up. Last year, I also wrote, “I doubt [Sanofi] will resort to another mega-merger just to keep up with the Joneses,” so take my wisdom with a grain of salt.

Sanofi also responded to 2010’s decline with another time-honored pharma tradition: job cuts. The firm laid off 1,700 U.S. employees around Thanksgiving last year, mainly sales reps whose days were numbered once the U.S. rights to Lovenox went poof. In all, Sanofi spent $1.8 billion on restructuring costs in 2010, which covered those U.S. layoffs — 300 were office positions, 1,400 were sales — and converting the company’s manufacturing footprint in France.

Internally, the company still hopes to see Multaq, the atrial fibrillation treatment approved in 2009, become a major contributor. Multaq has made a steady rise in revenues, posting $228 million in 2010 and $86 million in 1Q11, but it’s still a few years off from (potentially) reaching blockbuster status, and safety questions about it continue to swirl. For the moment, Sanofi’s diabetes play is keeping it afloat. Lantus revenues grew 14% (in Euros) in 2010, and were up 17% (in Euros) in 1Q11, with sales of $1.3 billion.

Sanofi hopes to keep the diabetes franchise rolling with lixisenatide, a once-daily GLP-1 receptor agonist meant to knock off Byetta (which would put it around the $500 million mark for annual revenues). The company hopes to file that one this year, after good Phase III results in February 2011.

Sanofi makes a lot of acquisitions, but they have a bit of a mixed record. The 2009 pickup of Chattem has helped solidify Sanofi’s consumer health presence, providing steady cash. Sanofi’s newest major (fingers crossed) product, Jevtana (prostate cancer), came over with the mega-acquisition of Aventis in 2004. That drug posted $109 million in revenues in its partial first year on the market, and $66 million in 1Q11. Its first EU launch was in April 2011, so there’s plenty of room for growth.

Sanofi and Merck had planned to (re-)merge their animal health businesses into a joint venture that would have been the largest company in its class. Antitrust issues became too complex and they scuttled the deal in March 2011. The companies intended to sell off some animal health assets to satisfy regulators, but both companies will now operate their animal health businesses on their own. Sanofi’s Merial unit posted revenues of $2.6 billion in 2010 and $812 million in 1Q11.

On the down side of mergers, the 2009 buyout of BiSpar brought in BSI-201, a highly touted oncology treatment, but that drug failed a big Phase III trial in breast cancer in January 2011, after tremendous Phase II results.

Then there’s 2009 purchase of Shantha, a Hyderabad-based vaccine manufacturer. In July 2010, the World Health Organization dropped Shan5 and Shanthera from its list of approved vaccines, due to manufacturing problems. That led to around $340 million in lost revenues from UNICEF over 2010-12. Sanofi hopes to get the vaccines reinstated by 2013, but Sanofi can’t afford lost opportunities like this.

Still, it’s not like Sanofi’s just spent $20 billion on a company with major manufacturing problems to fix. Oh, wait . . .  —GYR

ACQUISITION NEWS

Target: TargeGen Inc.

Price: $75 million plus $485 million in potential milestones

Announced: June 2010

What they said: “The acquisition of TargeGen represents a further significant step to increase our engagement in the field of hematological malignancies.”

—Marc Cluzel, M.D., Ph.D,

Executive Vice-President, R&D, Sanofi

Target: VaxDesign

Price: $55 million, plus $5 million for a development step

Announced: September 2010

What they said:  “With this novel model for understanding mechanisms of action, the probability of clinical success increases and the time to market should decrease.”

—Michel DeWilde, Ph.D.,

Senior Vice President, R&D, Sanofi Pasteur

Target: BMP Sunstone

Price: $520.6 million

Announced: October 2010

What they said: “The acquisition of BMP Sunstone will not only leverage our consumer healthcare business in China, but will also bring us unique access to new expanding distribution channels which are expected to account for a third of the pharmaceutical market in China in the coming years.”

—Christopher A. Viehbacher,

Chief Executive Officer of Sanofi

Target: Genzyme Corp.

Price: $20.1 billion

Announced: August 2009

What they said: “Sanofi-aventis’ global reach and significant resources would allow Genzyme to accelerate investment in new treatments, enhance penetration in existing markets and expand further into emerging markets. The combination of both companies would create a global leader in developing and providing novel treatments, giving both companies significant new growth opportunities.”

—Company Statement

OUTSOURCING NEWS

Sanofi made a big outsourcing splash in September 2010 when it announced a 10-year R&D pact with Covance. The deal, with an estimated range of $1.2 to $2.2 billion, involved asset transfers of a pair of Sanofi sites in Porcheville, France and Alnwick, UK. Covance paid $25 million for the two facilities, which bring in CMC services, including preformulation, drug formulation, preclinical and early-phase clinical API manufacturing, as well as radiolabeled chemistry. Covance will keep the sites going for a minimum of five years. Sanofi will utilize Covance as a sole-source for central laboratory services.

In another asset-transfer pact, Famar agreed to take over Sanofi’s solid and steriles facility in Madrid in January 2011. All employees were transferred to Famar. in 2001, Famar acquired Sanofi’s plant in L’Aigle, France. According to a Famar statement, Sanofi will keep a trailing supply agreement at the Madrid site, and both companies will partner to develop the manufacturing activity of the plant. Famar is interested in expanding the plant’s sterile manufacturing capacities, and trying to build a CMO operation in Spain.

In October 2010, Sanofi’s vaccine division, Sanofi Pasteur, named Perceptive Informatics its preferred partner in providing Randomization and Trial Supply Management (RTSM) technologies. Perceptive, a subsidiary of Parexel, will help the unit “achieve more efficient data collection, faster patient enrollment and more streamlined trial supply management for increasingly complex vaccine trials,” according to a Perceptive statement.

In August 2010, Sanofi named UK-based SCM Pharma as the provider for the fast-tracked fill/finish of a radio-labelled product. SCM will provide services for the aseptic manufacture and filling of a cytotoxic oncology compound into vials. The product will be packaged at Sanofi and distributed to clinical trial sites. SCM worked with Sanofi on the initial phase of the project.

THE LOWE DOWN

Remember back when Sanofi was talking about how big mergers weren’t necessarily what they needed to be doing? Ah, but Genzyme was just sitting there. Well, not quite sitting there — actually, Genzyme was frantically sloshing bleach into their manufacturing plant while watching their stock price, but you know what I mean. And so we have another big acquisition. A lot of people expected more drama from this one, but in the end, it was like watching something immobile being enfolded by an amoeba.

But I can’t get too snarky about this one, because it really may be part of a coherent strategy. Sanofi seems to be trying to have more of its revenue coming from biologics, as opposed to small molecules, and buying Genzyme — at contamination-sale prices — was a way to do that in one big stroke. They’ve got a big small-molecule patent expiration coming up with Plavix, and that sort of thing surely has them thinking about that wonderful land where patent expirations don’t seem to matter (for now). —Derek Lowe

Previous Profile: Merck // Next Profile: GlaxoSmithKline

Headcount: 105,000
Pharma Revenues: $40,871 (+1%/+6%)
Total Revenues: $40,871 (+1%/+6%)
Net Income: $11,814 (+12%/+18%)
R&D Budget: $6,392 (-5%/flat)

Revenues converted at average exchange rate / based on reported currency (Euro)

Account for 56% of total pharma sales, down from 57% in 2008.

SA earned $1.35 (+19%) billion from vaccines for polio, whooping cough and Hib and $1.48 (+37%) billion from flu vaccines. However, the company does not break out sales of individual vaccines (except Menactra), so they are not included in our list of top sellers. Total vaccine sales in 2008 were $4.8 billion (+15%), comprising 12% of total sales, up from 10% in 2008.

PROFILE

Sanofi-Aventis saw a changing of the guard in 2009, as insulin glargine injection Lantus passed Lovenox as the company’s best seller. If you look at our Top Selling Drugs chart on the previous page, the euro-to-dollar exchange rate makes the rest of SA’s products look pretty grim; not a one shows growth above 5% for the year, and most of them show a drop, with Eloxatin and Copaxone revenues plummeting. If you want to feel better, add 6% to each of those numbers for the results in local currency. It makes SA’s prospects look slightly better, although there are still far too many products trending downward.

And with Plavix — co-marketed with Bristol-Myers Squibb — facing generic competition in the U.S. next year, Sanofi could use some rose-colored lenses. Colon cancer treatment Eloxatin suffered an at-risk generic attack in 2009, and 1Q10 sales managed to drop a near-impossible 97% from 1Q09 in the U.S., and 81% overall. Sanofi reached an agreement with generic marketers to take their products off the market from June 2010 to August 2012, after which they can sell a licensed generic. Picking up the lesson of Apotex and Plavix, the generics makers presumably packed so much inventory into wholesalers pipelines that it’ll take a year for SA’s sales to recover.

Like Pfizer (and many of the companies further down the ranks), SA has been hedging its bets in “straight” pharma by diversifying. SA has boosted its consumer healthcare offerings globally, is in the process of building the top animal health company in the world, has gone on a multi-year run of acquiring generics companies and other firms in emerging markets, and has kept the pedal down with its vaccines business. One look at the “Acquisitions” box will show you that Sanofi’s bolting on some significant assets as it tries to de-emphasize traditional pharma.

But if you’re on this list, the de-emphasis only goes so far. Side bets are important, but SA is still banking on developing another major pharma product or two. Before its approval in July 2009, Multaq (atrial fibrillation) was touted as SA’s next billion-dollar drug. Some analysts even projected a peak sales figure near $4 billion for Multaq, which had been bumped by the FDA in 2006, pending further trials.

It’s early days, but Multaq’s early numbers haven’t been pretty. Sales in its first two quarters were microscopic, and other “some analysts” have dropped their peak sales estimates to $250 million, noting that the entire market of anti-arrhythmia drugs — Multaq’s class — is smaller than $1 billion globally and rife with much cheaper, nearly-as-effective treatments.

Like I said, it’s early. Multaq posted $33 million in 1Q10 sales, equal to the sales of 3Q09 and 4Q09 combined, but its earlier rejection means that its patent life is likely only going to run through 2014 or ‘15, so it needs to make hay.

Elsewhere in this issue, we’ll see that other presumed blockbusters (Effient and Onglyza, to name two) have start slowly out of the gate, reflecting a new matrix of concerns focused on gatekeepers, reimbursement, safety profiles and other elements that may not have been in play when an investigational drug was green-lighted. Good thing the H1N1 vaccine kicked in an extra $500 million in 1Q10 sales, after accounting for an extra $400 million in FY09. SA has made significant investments in vaccine R&D and production, further extending its footprint with its Shantha acquisition (and don’t be surprised if it acquires Abbott’s vax-unit by the time this issue’s in print).

In addition to vaccines, SA is also spending on diabetes R&D and new products to complement Lantus. In June 2010, Sanofi licensed an oral type 2 diabetes treatment from Metabolex in a deal with a potential value of $375 million, plus royalties. The compound is just beginning Phase II trials. Another deal with CureDM in April 2010 had a potential value of $335 million plus royalties for an insulin-stimulating peptide that has yet to begin Phase I trials.

Another (possible) $350 million is going to Wellstat Therapeutics for an insulin sensitizer in Phase II, as per an October 2009 agreement. SA also committed $50 million in June 2009 to buy an insulin production facility in Frankfurt, Germany. In its announcement, the company referred to the plant as “one of the largest state-of-the-art insulin manufacturing plants in the world.”

Inside-Out

In June 2009, just after press time for last year’s report, SA revealed plans for its new R&D model. The company contends that it’ll have “the most effective R&D organization in the pharmaceutical industry by 2013.” Apparently, this will be achieved by consolidating some sites and working a lot more with outside parties, including public and private research groups, academic institutions and biotech companies. Also, SA will build up its “exploratory structures” and “entrepreneurial units” (quotes theirs) to work in external collaborations. Sanofi established more than 30 external collaborations in 2009, and the items I mentioned above show that it’s not slowing down in 2010.

What does all this external R&D mean for the internal staff? SA’s announcement said that it will not engage in layoffs, but was “considering” a “plan” for “voluntary departures” mainly in the discovery and preclinical areas, as well as “central Group functions in the Paris area.” You don’t need to be in a Dilbert strip to imagine what voluntary departures are like.

Meanwhile, SA’s legacy R&D pipeline made some news in the past 12 months. In December 2009, SA cancelled development of a pair of products: eplivanserin for insomnia, after the FDA sent a Complete Response Letter, and idrabiotaparinux for prevention of thromboembolic events in patients with atrial fibrillation, after it didn’t do much. SA also got a positive recommendation for DuoPlavin, a combo of Plavix and, um, aspirin, for people who were taking both of them and found that too complicated.

The company had better news in 2010. In June, SA received approval for Jetvana, a treatment for late-stage prostate cancer patients, in short order after completing its rolling submission in April. The company also got “stunning” individual patient results in a breast cancer trial of BSI-201, a compound it picked up with the acquisition of BiPar in April 2009.

In his annual report’s letter to shareholders, SA chief exec Christopher A. Viehbacher noted that the company cut 25% of its R&D portfolio over the course of 2009, eliminating “low-value compounds.” The report broke down the pipeline of 49 NMEs and vaccines by class, with vaccines (18) and oncology (11) leading the R&D efforts (CNS was a distant third with six compounds in development).

Sanofi-Aventis’ head start in vaccines and its commanding presence in diabetes give it two significant pillars in the modern pharma environment. It still has a way to go to show it can handle the inevitable loss of its top sellers, but I doubt it’ll resort to another mega-merger just to keep up with the Joneses.

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Headcount: 98,000
Pharma Revenues: $40,562 (+5%/-2%*)
Total Revenues: $40,562+5%/-2%*
Net Income: $10,399+7%/-1%*
R&D Budget: $6,731+8%/-1%*

* Converted at avg. exch. rate / based on local currency (Euro)

Account for 57% of total pharma sales, down from 58% in 2007.

* SA earned $1.13 billion from vaccines for polio, whooping cough and Hib and $1.08 billion from flu vaccines. However, the company does not break out sales of individual vaccines (except Menactra), so they are not included in our list of top sellers. Total vaccine sales in 2008 were $4.2 billion

PROFILE

Currency shifts helped move Sanofi-Aventis (SA) back to #2 in our ranks (the Euro managed to appreciate during 2008 while the GBPound dropped in value). It looks safe in that position, mostly because GSK’s patent cliff has come up a little sooner. But that doesn’t mean SA is sitting pretty; with several big expirations looming and few replacements on the horizon, France’s pharma champion needs to make some big moves.

The company made a splash in September 2008 when Chris Viehbacher, a GSK vet, was named chief executive officer, succeeding Gerard Le Fur. Mr. Viehbacher, who is not French, has quite a job ahead of him if he wants to position SA to recover from its own patent cliff.

The problem is, many of SA’s top sellers face generic erosion and patent challenges, and there aren’t a lot of products ready to step up and replace them. The biggest question is when a generic version of SA’s top seller will hit the market. In April 2009, the U.S. Supreme Court refused to hear a case to extend the patent protection for Lovenox, opening the door for generic competition.

But because of the legal wrangling and the complexity involved in making Lovenox, the initial period of generic exclusivity seems to have expired for first-to-file Amphastar and Teva, but no one’s received FDA approval for an off-brand version of the $4.0 billion drug yet. In Europe, a generic version of the drug will have to include results from at least one “adequately powered” clinical trial, which will surely raise the cost of development beyond the scope of most generic marketers. No word on what it’ll take for a U.S. marketer to gain approval.

In June 2009, SA’s patent for cancer treatment Eloxatin was deemed invalid, opening the door for generics to go after that $2.0 billion drug ($1.3 billion in U.S. sales). SA plans to appeal that decision, but Teva and Hospira plan to get approval and start a-sellin’. A generic of Plavix is already on the market in Germany, cancer treatment Taxotere loses protection in May 2010 (if not sooner), and there may be a cheap version of Ambien CR (yay!) coming soon in the U.S.

So if you can’t beat ‘em, join ‘em! One of SA’s new strategies has been to build up its branded generic network, spending $2.6 billion to add Zentiva and gain entrée into its central/eastern European market, while also picking up companies in Mexico and Brazil. SA pointed out in its 1Q09 statement that these acquisitions would have lifted 2008’s generic sales from $500 million to $1.75 billion.

Where else are the new revenues going to come from? In November 2008, a month before Mr. Viebacher officially took the reins, SA finally threw in the towel on one its onetime darling, obesity/smoking cessation drug Acomplia. The move followed an October recommendation by the EMEA to suspend marketing the drug, due to the risk/benefit profile (likely the same suicidal thoughts and depression events that led the FDA to reject the drug outright). Fewer than two weeks later, SA announced that it was discontinuing all clinical trials of Acomplia, pulling the plug on a treatment that was once supposed to bring in billions of dollars (or Euros) each year.

Where one door shuts, maybe another opens. Back in 2006, SA’s Multaq, a treatment for atrial fibrillation, was rejected by the FDA because of increased deaths in a trial. The companyinitiated a new trial of 4,600 patients and received an advisory panel recommendation (10 to 3) in favor of use in that indication, but not for patients with severe heart failure, and not with the claim that the drug reduces risk of death. Some panelists recommended a “black box” warning to make sure doctors would not inadvertently use Multaq on higher-risk patients. The drug is under priority review with the FDA, for what that’s worth.

In what appears to be a concession to the realities of pharma R&D, Mr. Viehbacher commented in a Wall Street Journal interview that he’d like to take half of the R&D money that’s spent on preclinical and early-stage studies and spend it on partnerships with small companies to fund their drug development. Optimally, he said, he’d like to see half of SA’s marketed drugs come from outside companies. At present, it’s closer to 10%. So if we see a big number of R&D layoffs, you’ll know which way the company’s heading.

SA took the opportunity to weed some projects out of its portfolio. Among the late-stage casualties: saredutant (depression), AVE5530 (hypercholesterolemia), TroVax (cancer vaccine, with the rights kicked back to Oxford BioMedica), and the Unifive pentavalent (DTP-HepB, Hib) vaccine. Following the review, SA reported that it has 51 projects in clinical development (NMEs and vaccines), with 21 in either Phase III or registration. Between vaccines (35%) and biologics (14%), nearly half of SA’s pipeline is large molecule.

Along with its generics push, SA’s been working hard to make itself a giant in the vaccine field, adding facilities in Pennsylvania, France and Mexico, acquiring Acambis, and gaining contracts for both emergency supplies and national immunization programs. Vaccines accounted for 10% of SA’s $40 billion in 2008 revenues. A company statement contends that worldwide vaccine sales could double to $34 billion by 2016 and that SA’s internal vaccine revenues could reach 15% of total sales. SA has certainly put itself in good position to dominate in the vaccine market next decade, provided we don’t all die of some horrible pandemic before then.

Reporting on fiscal 2008, the company warned that it had “initiated a wide-ranging transformation program,” with three main themes:

1. Increasing innovation in R&D
2. Adapting structures to meet the challenges of the future, and
3. Exploring external growth opportunities.

Shortly before press time, it announced that it will close or sell off eight of its 27 R&D facilities in the next several years — five in France and the remainder in the U.S., Japan and the UK — and focus its efforts on diabetes, cancer, age-related disease, inflammatory disease and anti-infectives. “Tomorrow’s research will be carried out through networks. We will be open to knowledge from outside sources,” said Marc Cluzel, Sanofi’s head of R&D.

In early June, another rumor cropped up that Mr. Viebacher had gone to the board of directors with a proposal for a hostile takeover of a U.S. pharma company (Amgen? Allergan? BMS?), but was rejected. All sides have denied that report, but it’s not hard to see why SA would try to buy its way out of a multi-year pipeline drought.

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Headcount: 100,000
Pharma Revenues: $38,452 (+8/-1%*)
Total Revenues: $38,452 (+8/-1%*)
Net Income: $9,746 (+10/+1%*)
R&D Budget: $6,219 (+12/+2%)

* Decline based on local currency (Euro)

Account for 57% of total pharma sales, up from 56% in 2006.

* SA earned $1.0 billion from flu vaccines and $905 million from vaccines for polio, whooping cough and Hib. However, the company does not break out sales of individual vaccines (except Menactra), so they are not included in our list of top sellers.

PROFILE

I know it’s a cliché to say, “This is a pivotal year for [company X],” but Sanofi-Aventis is looking at a couple of patent rulings that may be devastating to the company’s near-term results. On top of that, the weak dollar has been wreaking havoc on SA’s financials, since the U.S. remains its largest market. In local currency, the company’s drug revenues dropped 1% last year and fell another 3% in 1Q08. On the bright side, diabetes treatment Lantus is growing by leaps and bounds, and remains the most prescribed insulin in the world.

So far, the company hasn’t taken drastic measures to counter the sales slowdown. Restructuring costs in 2007 ($188 million) were only half of 2006 numbers, and were primarily tied to layoffs in Europe. In June 2008, the company fired 800 sales reps in France, but that’s still a small number in comparison to some of the firings we’ve seen from SA’s competitors. It doesn’t hurt that the company already began a significant retooling ($1.4 billion) when Sanofi and Aventis merged in 2005.

Days in Court

In May 2008, a federal appeals court sustained a ruling that invalidates SA’s U.S. patent for Lovenox, opening the door for Amphastar and Teva to pursue a generic version of SA’s top-selling drug. On top of that, the appeals court’s three-judge panel ruled that SA had engaged in “inequitable conduct” in its defense of the Lovenox patent, with “intent to deceive.”

Fortunately for SA, Lovenox isn’t the easiest drug to produce, and one generic challenge (Momenta and Sandoz) has already been delayed because of Lovenox’s sheer complexity (not quite a biologic drug, but much more complicated than a standard small molecule, from what I gather). But if SA’s patent is unenforceable and the agency approves a generic version, SA is in for a wild ride.

As is, there are two major “Lovenox-busters” on the horizon. Bayer and J&J’s Xarelto appears to excel over SA’s drug in trial after trial, and BMS and Pfizer aren’t too far behind with apixaban. SA is pursuing its own successor for Lovenox, with Phase III trials ongoing for AVE5026, but those trials won’t be complete until October 2009 at the earliest.

Oh, and a company in Germany is filing to sell a generic version of Plavix in that market and thinks it can begin that before this issue sees print. SA contends that its patents on Plavix will remain in force till 2013. If either one of these two drugs sees major generic competition, SA will be in boatloads of trouble.

As is, the company’s #3 seller in 2006 fell back to #6 in 2007 and will plummet further this year. Ambien sales dropped 33% last year due to generic competition. While a 62% drop in 1Q08 looks bad, the drug wasn’t generic in 1Q07, and 1Q08 Ambien sales actually posted a slight rise against 4Q07. While I can attest to the effectiveness of SA’s line extension, Ambien CR, it looks like most U.S. consumers can sleep just fine with the generic version of the main drug. (That said, I’m willing to try out SA’s Ambien followup, eplivanserin (generic name), which the company plans to file sometime in 2008.)

Czech, Please!

With news like that, it’s no wonder that SA is looking to expand its role in generics! In June 2008, SA made a $2.0 billion bid to take control of Czech-based generic drug company Zentiva. SA already owned 25% of the firm, and its bid appears to be in response to a buyout offer from PPF Group, a privately held fund also based in the Czech Republic. Picking up Zentiva, which markets generics of Glucophage and Zocor, would give SA entrée into several eastern markets, including Slovakia and Romania, as well as the large market of Turkey.

I’m interested in seeing how major pharma companies can run their own generics companies. While I understand the principle that “there’s money to be had in generics,” it seems culturally antithetical to the R&D-based, long-term development model of pharma companies. I suppose they can be run as utterly separate units, but I’m not sure what synergies can arise from that sort of relationship. Plus, the margins are a lot tighter, especially if you’re not the company that gets in with that 180-day exclusivity filing.

House of Vax

Vaccines comprise SA’s other action to reduce its focus on branded pharmaceuticals. The company’s Sanofi Pasteur unit has made significant strides of late. In October 2007, SA was granted an expanded label for its meningitis vaccine, Menactra. Originally approved for patients 11 to 55 years old, the vaccine can now be given to people as young as two years old. Revenues for the vaccine nearly doubled in 2007, to $569 million, and were up 48% in 1Q08 to $137 million.

In June 2008, SA gained approval for Pentacel, a combo vaccine covering diphtheria, tetanus, whooping cough (pertussis), polio, and influenza type B. The company contended that Pentacel can help cut the number of injections children receive (from 23 to 16) before they reach 18 months of age.

In July 2007, SA finished construction of a $150 million flu vaccine facility intended to double manufacturing capacity in the U.S. The site is designed to make more than 100 million doses and should come online by early 2009.

In June 2008, the company inaugurated a $140 million vaccine facility in Val de Reuil, France. The site is designed to produce vaccines against 20 diseases, and to be switched over to pandemic flu vaccine quickly, just in case. The site should be up and running by the end of 2008 and can fill 200 million syringes and vials annually.

The company is also planning to a flu vaccine facility in Shenzhen, China, where SA already operates a facility. In a press statement, the company said that the new site will be operating by 2012 and will be designed for easy expansion to accommodate growth in the Chinese vaccine market.

Of course, it’s not all about manufacturing. You still need to develop new vaccines. To that end, SA recently decided in April 2008 to invest $100 million in a new vaccine R&D facility in Toronto, Canada. The 165,000-sq.-ft. site is planned to open in 2010 and targets will include pediatric combination vaccines, pneumococcal protein vaccines, and cancer vaccines, according to a company statement.

SA is doing its best to diversify with generics and vaccines, but the company’s patent challenges could lead to desperate times at France’s national champion.

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