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August 30, 2010
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Sanofi-Aventis (SNY) is looking to expand the label for its vaccine, Menactra. The company recently announced that the US Food and Drug Administration (FDA) has accepted the company’s supplemental Biologics License Application (sBLA) for the vaccine. Sanofi is looking to get Menactra approved for use in infants and toddlers.
Menactra, which is designed to help provide protection from invasive meningococcal disease caused by serogroups A, C, Y, and W-135, is approved for use in the 2-55 year age group. The current label expansion is being sought for use in children belonging to the 9-12 month age group. The sBLA is based on encouraging data from one phase II and three phase III studies.
An expanded label would help push Menactra sales which came in at €445 million in 2009. Sales benefited from the implementation of the recommendations of the Advisory Committee on Immunization Practices (ACIP). The ACIP had issued recommendations encouraging the routine vaccination of pre-adolescents (11-12 years old), adolescents at high school entry (15 years old) and college freshmen living in dormitories. Menactra sales should also benefit from launches in additional countries.
Meningococcal disease, which includes meningitis, is estimated to affect about 1,000 to 2,600 people in the US annually. About 10% of the affected people could die and survivors could be afflicted by permanent disabilities like hearing loss, neurological damage and limb amputations.
Update on Lovenox
Sanofi also provided an update on its Lovenox litigation case. The company faced a setback in its attempts to stop a generic version of its blockbuster drug, Lovenox, from being sold in the US. Sanofi, which is suing the FDA for approving a generic version of Lovenox, had asked the US District Court for the District of Columbia to stop the generic version of Lovenox from being marketed till a final judgment is out in its case with the FDA.
The court did not grant preliminary injunctive relief which means that Momenta Pharmaceuticals (MNTA) can continue marketing its generic version of Lovenox. The entry of generic Lovenox is a major setback for Sanofi. Lovenox, an anti-coagulant/blood thinner analog of heparin, is a major contributor to the top line with 2009 sales coming in at €3,043 million, up 11.1%. Lovenox accounted for 10.4% of total sales in 2009 and the entry of a generic alternative will result in a huge decline in Lovenox sales.
Companies like Teva Pharmaceuticals (TEVA) and Amphastar Pharmaceuticals are also seeking to launch their generic versions of Lovenox.
Neutral on Sanofi
We currently have a Neutral recommendation on Sanofi-Aventis, which is supported by a Zacks #3 Rank (short-term “Hold" rating). Our biggest concern for Sanofi is the high exposure to generic risk on many of its leading franchises. The entry of generic Lovenox is a huge setback for the company.
However, we are encouraged to see Sanofi’s progress with its pipeline. While new product launches should make significant revenue contributions in the early part of the decade, we expect Sanofi to continue to contain operating costs in order to grow earnings in the face of weakening sales of some of its biggest products. We also expect the company to look to grow revenue through additional partnering deals and acquisitions. We expect Sanofi to look for a small-to-mid sized deal in the high-growth biotech space in order to help plug revenue holes left by patent expirations. Current rumors indicate that Sanofi is looking to acquire Genzyme Corp. (GENZ).
Read the full analyst report on "SNY"
Read the full analyst report on "MNTA"
Read the full analyst report on "TEVA"
Read the full analyst report on "GENZ"
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