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Diabetes Moves Down the List of Priorities for Big Pharma

Bloomberg logoBloomberg 2/8/2019 James Paton
a hand holding a cellphone: A Public Health Foundation of India worker conducts a blood glucose test for a patient while during a free door-to-door screening program funded by Eli Lilly & Co. at a home in the farming village of Thana kalan, Haryana, India, on Thursday, July 13, 2017. Global pharmaceutical companies, from Indianapolis-based Eli Lilly to Switzerland’s Novartis AG, are heading into smaller cities and rural areas to learn about the health-care needs of about 70 percent of the population. These remote regions of the developing world are the final frontier for the international drug industry.© Bloomberg A Public Health Foundation of India worker conducts a blood glucose test for a patient while during a free door-to-door screening program funded by Eli Lilly & Co. at a home in the farming village of Thana kalan, Haryana, India, on Thursday, July 13, 2017. Global pharmaceutical companies, from Indianapolis-based Eli Lilly to Switzerland’s Novartis AG, are heading into smaller cities and rural areas to learn about the health-care needs of about 70 percent of the population. These remote regions of the developing world are the final frontier for the international drug industry.

While Sanofi and other Big Pharma companies rush toward cutting-edge therapies that unleash the immune system to fight cancer or potentially cure DNA flaws, diabetes is moving down the list of priorities.

Sanofi is joining rivals such as GlaxoSmithKline Plc that have shaken up their approach to finding new blockbusters, moving swiftly into the lucrative oncology field and culling less promising programs. The French drugmaker said Thursday it’s accelerating 17 programs -- almost half in cancer -- and dropping more than a dozen others under development, including two in diabetes. The company also plans to expand in gene therapies, John Reed, the new research chief, said in an interview.

Sanofi is concentrating on “places where the confidence in the targets is high, where the development pathway is crisp and lean, where regulatory authorities have accelerated routes, and where the payers remain collaborative,” said Reed, who joined the Paris-based company from Roche Holding AG last year.

The drugmaker is reshaping its research priorities as medicines for diabetes -- one of the world’s most common and serious medical conditions -- grapple with tough competition, pricing pressure and scrutiny from U.S. lawmakers. At the same time, Sanofi and other global pharmaceutical companies from Novartis AG to Glaxo are betting on breakthrough medicines that could have a profound impact on patients -- and profits.

Gene therapies with the potential to cure life-threatening conditions are a key area. Sanofi will build on a number of early-stage assets it has in-house, tap the manufacturing know-how in its vaccines business, and look for partnership or acquisition opportunities to expand in that field, Reed said.

Diabetes Challenge

“We see an opportunity to broaden our commitment to that space, and we’ve made decisions internally about putting more resources into it,” he said. “We’re looking at doing part of that organically and part through collaboration.”

Among the experimental medicines being prioritized at the company are treatments for leukemia, multiple myeloma, breast cancer, Parkinson’s disease and hemophilia. Halted projects include some treatments for obesity, heart disease, and the most common form of diabetes.

Sanofi will advance in diabetes and heart disease, though it plans to be “more focused and selective,” Reed said. The canceled projects highlight the challenge in finding compelling new drugs in those areas and the investment of time and money needed to prove that they work, he said.

Diabetes, which powered Sanofi’s growth for years, continues to be a sore spot amid declining sales of Lantus, its aging bestseller. Chief Executive Officer Olivier Brandicourt is among pharma bosses heading to Washington later this month to testify on drug prices amid concerns about patients’ insulin costs. The halt to diabetes projects raises questions about the company’s commitment to the area, Jean-Jacques Le Fur, an analyst with Bryan Garnier, said in a note to clients.

Even the world’s biggest maker of diabetes drugs, Novo Nordisk A/S, has moved into new territories like obesity and liver disease while speeding efforts to develop stem-cell therapies for a range of diseases, including Parkinson’s. While the Danish company continues rolling out diabetes products, finding game changers has become tougher.

Sanofi’s moves to revamp R&D follow similar steps at Glaxo, which pulled back from cancer therapies years ago before opting to return. In September, Sanofi and partner Regeneron Pharmaceuticals Inc. won U.S. Food and Drug Administration approval for an immune-oncology drug -- Sanofi’s first -- for a deadly form of skin cancer. The treatment is now an anchor to build on and combine with others, Reed said.

Missed Wave

Still, Sanofi has acknowledged that it missed out on the recent wave of revolutionary new medicines for cancer, falling behind competitors such as Bristol-Myers Squibb Co., Roche and AstraZeneca Plc in the booming class of drugs that unleash the immune system against tumors.

But many patients with colorectal, breast, prostate and other types of cancer don’t respond to those breakthrough drugs, and “there’s a huge frontier still of unmet opportunity,” Reed said.

Sanofi expects to maintain an annual research and development budget of about 6 billion euros ($6.8 billion) through 2021, making use of AI and tech to keep costs down. Among the projects dropped were experimental treatments for Alzheimer’s and peanut allergy, while Sanofi will also keep its commitment to vaccines.

--With assistance from Marthe Fourcade.

To contact the reporter on this story: James Paton in London at jpaton4@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Lauerman

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©2019 Bloomberg L.P.

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