PARIS (Reuters) - Sanofi SA (SASY.PA) risks falling behind in the battle for share of the fast-growing multi-billion euro multiple sclerosis (MS) market, as rivals push ahead with revolutionary treatments while doubts remain over the French drugmaker’s own drug candidates.
Sanofi, which has relied on blood thinners and cancer therapies to drive sales but faces increased competition from generic drug versions, is preparing to submit two MS treatments for approval this year.
But it faces an uphill battle to catch Novartis AG’s NOVN.VX Gilenya and Biogen Idec Inc’s (BIIB.O) BG-12, set to dominate a market that JPMorgan analysts see growing to $14 billion (8 billion pound) in 2015 from $9.6 billion last year.
“Sanofi will remain a small player compared with Biogen or Novartis, but it will still remain on the radar screen,” said Beatrice Muzard, an analyst at brokerage Natixis.
MS, which has no cure, affects 2.5 million people worldwide. It is a chronic, often disabling disease that attacks the central nervous system and can lead to numbness, paralysis and loss of vision.
Standard treatment has involved injected drugs such as Teva Pharmaceutical Industries Ltd’s (TEVA.TA) Copaxone, Tysabri - sold by Biogen and Elan Ltd ELAN.UL - and interferons. But the approval of Gilenya in 2010 introduced a potent new option in pill form.
Gilenya and other oral MS treatments in late-stage development such as BG-12 are expected to drive growth in the sector.
But analysts estimate Sanofi will grab only a modest share, given question marks over its drug candidates Aubagio and Lemtrada. Natixis’ Muzard predicts the French firm’s MS drugs could have peak sales of just 1 billion euros - not enough to plug the gap left by loss of earnings from the arrival of generic competition to its top blood thinner, Plavix.
Sanofi acquired Lemtrada through its $20.1 billion takeover of U.S. biotech group Genzyme last year, when it was already developing MS pill Aubagio. If approved, both drugs could end up reaching the U.S. and European markets by the end of the year.
“It’s pretty unusual for a company to come out with two new products at once, and actually cover the spectrum of the disease,” Sanofi Chief Executive Chris Viehbacher told Reuters.
Trouble is, there are doubts about both medicines.
Lemtrada was the main sticking point in the protracted merger talks between Sanofi and Genzyme and, at the time, Viehbacher’s team was keen to talk down its prospects. Genzyme had projected peak Lemtrada sales of $3.5 billion a year, while Sanofi pitched the number at around $700 million.
The final deal between the two companies included a “contingent value right” GCVRZ.O, a tradeable security that gives payouts to Genzyme investors if certain revenue targets are met, to bridge their differences.
“When we were acquiring Genzyme, we were rightly sceptical of Lemtrada, because I am not keen on paying for things that are not proven,” Viehbacher said.
“Now that we have seen the clinical trial results - I have seen them but I cannot say more because we are going to publish them in April - we are very excited about this multiple sclerosis franchise.”
Unlike older MS drugs that have to be injected daily or weekly, Lemtrada is given just once a year.
“I think Lemtrada is going to be completely different than everything else, which makes it difficult for the market to assess,” said Viehbacher.
Certainly analyst views vary widely. Morgan Stanley is forecasting 1 billion euros in peak sales for Lemtrada, while Nomura only sees $360 million.
Medical experts back Viehbacher’s view that a wider choice of treatments is needed given the unpredictable nature of MS.
“Doctors and patients are looking for multiple options because the disease is so variable,” said Tim Coetzee, chief research officer of the U.S.-based National Multiple Sclerosis Society. “A drug that is effective in some patients may not be effective in other patients.”
Yet Lemtrada’s prospects remain far from certain. During mid-stage tests the drug showed an unprecedented level of efficacy in reducing relapses over a three-year period, but this outcome was not repeated in a later-stage trial.
It can also have serious side effects, which make it likely to be prescribed only to treat more severe forms of the disease.
Compared with older therapies, Aubagio has the advantage of being an oral drug. But it has produced less impressive results in clinical tests than BG-12 and Gilenya - though heart issues have recently cast a shadow over Gilenya.
In one recent study, Aubagio failed to show it was better than Rebif, a commonly used injectable interferon from Germany’s Merck KGaA (MRCG.DE), although it did have milder side effects.
“Aubagio won’t take a lot of market share ... but it could find a niche on the basis of its safety profile,” said Muzard, who is forecasting sales of around 400 million euros in 2018, compared with 2.6 billion for Gilenya.
That niche could be found among newly diagnosed patients, since around 35 to 40 percent prefer to take no medication rather than face unwanted side effects.
“Here’s the challenge: convincing patients to start therapy,” said Kevin Richard, co-founder of U.S. consultancy ClearView Healthcare Partners. “In this case Aubagio could be prescribed to patients who are not on interferons yet and who are hesitant to start injections.”
Sanofi filed Aubagio with the U.S. Food and Drug Administration in October and aims to submit it for approval in Europe in the first quarter of 2012, when it also expects to file Lemtrada with both regulators.
Additional reporting by Ben Hirschler in London; Editing by David Holmes