Sanofi Portfolio Update

Zacks

Over the last few quarters, several products at Sanofi (SNY) including Aubagio, an oral treatment for relapsing forms of multiple sclerosis (:RMS) and Zaltrap for treatment-experienced patients suffering from metastatic colorectal cancer, have received approval.

Sanofi’s product portfolio was boosted further when the U.S. Food and Drug Administration (:FDA) approved Nasacort 24HR nasal spray. The drug was approved as an over-the-counter (:OTC) treatment for seasonal and other nasal allergies for use in children above 2 years and adults. Nasacort 24HR nasal spray will be available from the spring of 2014.

The approval came on the basis of encouraging data from 13 placebo-controlled efficacy studies, safety data from 43 studies and 16 years of post-marketing data of Nasacort AQ.

The approval did not come as a surprises as, in July, the FDA Nonprescription Drugs Advisory Committee (NDAC) had recommended (10-6) the approval of Nasacort AQ Nasal Spray.

Sanofi carries a Zacks Rank #4 (Sell). We are concerned about generic erosion confronting most of Sanofi’s key drugs including Lovenox, Aprovel, Taxotere, Eloxatin and Xatral. Generic competition affected sales in the second quarter 2013 by €481 million. Additionally, the company is facing increased genericization in Japan due to new policies. Generic competition will continue to have a negative impact on revenues in the coming quarters. Meanwhile, emerging markets, which accounted for 32% of Sanofi’s revenues, have been underperforming since the last four quarters.

Additionally, pipeline failures (oncology candidate -  iniparib and anticoagulant - otamixaban) have put immense pressure on Sanofi’s pipeline.

Currently, companies like Roche (RHHBY), Isis Pharmaceuticals, Inc. (ISIS) and Actelion Ltd. (ALIOF) look more attractive with a Zacks Rank #1 (Strong Buy).

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