Sanofi takes an FDA shortcut with its diabetes combo, racing with Novo

Olivier Brandicourt

Sanofi ($SNY) is using its $245 million coupon for a quick FDA review to speed up the approval process for a combination of its top-selling insulin and a new diabetes drug, angling to beat rival Novo Nordisk ($NVO) to the market.

The French drugmaker filed an FDA application for LixiLan, a fixed-dose injection that combines the blockbuster Lantus with lixisenatide, an investigational Type 2 diabetes treatment that works by boosting the hormone GLP-1 to increase natural insulin production. In tandem, the two therapies significantly reduced blood sugar in a Phase III program involving roughly 2,000 patients, Sanofi said.

To move things along with LixiLan, Sanofi redeemed an outstanding priority review voucher, which shortens the standard FDA review time for submitted drugs from 10 months to 6 months and will kick in once the agency accepts the company's application. Sanofi picked up its voucher earlier this year in a deal with Retrophin ($RTRX), paying $150 million up front and promising to disburse installments of $47.5 million in 2016 and 2017.

The goal is to get to market before diabetes magnate Novo, which submitted a similar combo for FDA approval in September. That cocktail therapy, sold in Europe as Xultophy, pairs Novo's blockbuster GLP-1 treatment Victoza with the recently approved insulin Tresiba and has charted excellent clinical results over the past few years.

Sanofi is working to stay afloat in a changing diabetes market, preparing to face biosimilar competition for Lantus that will imperil the treatment's roughly $8 billion in annual revenue. Earlier this year, the company disappointed analysts with the revelation that diabetes sales are likely to slip about 7% in 2015 and decline well into 2018, as new products including the Lantus heir Toujeo have underperformed expectations.

Sanofi has used the priority review program to win a blockbuster race in the past, joining partner Regeneron Pharmaceuticals ($REGN) last year to trade $67.5 million for a voucher that helped the pair leapfrog Amgen ($AMGN) in the race to commercialize new treatments for high cholesterol.

The priority review voucher program, which allows any company to cut the line at the FDA for a price, has come under scrutiny over the past year.

Introduced in 2007, the system awards a coupon for quick review to any company that successfully develops a treatment for a rare pediatric disorder or neglected tropical disease, and that asset can be sold to the highest bidder. While that has proven lucrative for companies with vouchers--the last one sold for $350 million--it forces the FDA to interrupt its other public health work to fast-track new, possibly marginal treatments. And companies can obtain these increasingly valuable assets without inventing drugs on their own, a facet of the program that led the former Martin Shkreli-helmed KaloBios ($KBIO) to acquire an old antiviral treatment in hopes of winning FDA approval and picking up a sellable voucher.

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