Sanofi (SNY) recently announced encouraging data on its phase III candidate Lyxumia (lixisenatide). Top-line results were presented from the phase III GetGoal Duo 1 study, which evaluated Lyxumia, an investigational GLP-1 agonist in combination with Lantus (insulin glargine), for type II diabetes uncontrolled on oral anti-diabetics (OADs) – mainly metformin.
Lyxumia in combination with Lantus met its primary efficacy endpoint. The GetGoal phase III trials are evaluating the effects of Lyxumia in adults with type II diabetes treated in monotherapy, with various oral anti-diabetic agents or in combination with basal insulin.
The GetGoal program was initiated in May 2008. So far, GetGoal-X, GetGoal-L, GetGoal-L Asia, GetGoal-Mono, GetGoal-S, GetGoal-F1 and GetGoal Duo 1 have reported positive top-line results. Further results from the GetGoal phase III trials are expected to be released in 2012.
On November 16, 2011, Sanofi made a formal announcement stating that the marketing application for Lyxumia has been submitted to the European Medicines Agency (EMA). The company is expected to file for regulatory approval of Lyxumia in the US in the fourth quarter of 2012.
Our Recommendation
We currently have a Neutral recommendation on Sanofi. The stock carries a Zacks #4 Rank (Hold rating) in the short run. We expect 2012 earnings to be hit by the loss of US exclusivity on Plavix and Avapro.
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 that the company will look to grow revenue through partnering deals and acquisitions.
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