Zacks_Analysts' Blog : Sanofi's Multiple Sclerosis Drug Disappoints - Analyst Blog

Sanofi’s (SNY">SNY) subsidiary, Genzyme, recently announced disappointing top-line results of its phase III candidate, Aubagio (teriflunomide). Results were presented from the phase III TENERE trial, which was conducted on 324 patients with relapsing forms of multiple sclerosis (RMS).

Aubagio failed to show statistical superiority over Pfizer/Merck KGaA’s (PFE">PFE/MKGAF">MKGAF) Rebif. Results showed that 48.6% and 37.8% of patients receiving 7mg and 14mg of Aubagio respectively achieved the primary endpoint as compared to 42.3% of patients receiving Rebif, over a two-year period.

However, both doses of Aubagio were found to be safe and well tolerated. Sanofi plans to present detailed data from the phase III TENERE trial at an upcoming medical meeting.

TENERE is the second completed study evaluating the efficacy of Aubagio in RMS patients. In October 2010, Sanofi had announced positive results on Aubagio from a pivotal phase III study (TEMSO) in patients with RMS. There are three more studies in progress, namely TOWER, TOPIC and TERACLES which makes the program one of the largest and broadest amongst any oral multiple sclerosis agent under development.

Our Take

Competition in the oral MS market will be intense and Aubagio needs to demonstrate superior efficacy and tolerability to gain share. Novartis’ (NVS">NVS) Gilenya already has a lead in the oral MS market with the product being approved in September 2010. Another major competitor could be Biogen Idec’s (BIIB">BIIB) BG-12, which has shown encouraging data so far.

In such a scenario and given the TENERE data, Aubagio, if approved, will most likely generate modest sales. Aubagio is currently under regulatory review in the US with the EU filing slated for the first quarter of 2012. We currently have a Neutral recommendation on Sanofi. The stock carries a Zacks #3 Rank (Hold rating) in the short run.