Sanofi (SNY) has lost another round of its battle against generic interlopers in its key diabetes franchise, increasing the urgency for the French pharmaceuticals company to buy or launch new products following its failed run at oncology specialist Medivation (MDVN) .
Sanofi CEO Olivier Brandicourt has been open about his desire for deals since taking the helm in April 2015 and a loss of patent protection for Lantus, its biggest drug, together with a court fight with Amgen (AMGN) over its Praluent cholesterol treatment, mean it was always more likely to be bidder than target, despite a price earnings multiple that lags its peers.
UnitedHealth (UNH) has now become the second of the three major U.S. healthcare providers to withdraw Lantus from its 2017 list of covered drugs.
The removal of the drug, along with Sanofi’s successor insulin formulation Toujeo, in favor of Eli Lilly‘s (LLY) Basaglar follows Lantus’ erasure from CVS Health’s (CVS) so-called national formulary, Jefferies noted. A Sanofi spokeswoman confirmed UnitedHealth’s decision, which she said would kick in from next April. But she said the drugs maker would maintain its guidance for diabetes sales to slip by between 4% and 8% a year on average between 2015 and 2018.
Mirabaud analyst Nick Turner called the development “significant bad news because it implies there will be a continuation of the pricing war within the diabetes sector in general and particularly with the insulin.”