FDA approves Lilly and Boehringer's take on Sanofi's top-selling insulin

Partners Eli Lilly ($LLY) and Boehringer Ingelheim inched closer to challenging Sanofi's ($SNY) best-selling insulin, winning FDA approval for their take on the blockbuster Lantus as they wait for its U.S. patent protection to expire.

The agency signed off on Basaglar, a long-acting insulin analog that demonstrated itself similar to Lantus, which brings in nearly $8 billion a year for Sanofi. The FDA's approval follows a "tentative" OK for Basaglar handed down last year, in which the agency recognized that Lilly and Boehringer's product stacked up to Lantus but held off on clearing the treatment until the two parties resolved a legal dispute.

Now, thanks to a patent settlement signed in September, Lilly and Boehringer are preparing to launch their insulin in the U.S. after Lantus' market exclusivity expires on Dec. 15, 2016. The pair began rolling Basaglar out in Europe this fall but, due to the slow process of convincing physicians to switch patients' prescriptions, haven't seen the rapid uptake commonly seen with generics.

The coming threat of competition for Lantus puts Sanofi on notice as the French drugmaker works to prop up its once-growing diabetes business in the face of global headwinds. Earlier this year, the company disappointed analysts with the revelation that it expects diabetes sales to slip about 7% in 2015 and decline well into 2018, as new products--including Toujeo, a longer-acting heir to Lantus--have failed to live up to expectations.

In the weeks since, Sanofi has signed deals worth up to $6 billion to bring in pipeline treatments that might help it contend with Lilly, Novo Nordisk ($NVO) and Johnson & Johnson ($JNJ), rivals that have since eclipsed its place in parts of the diabetes market.

As for Lilly, the promise of cutting into Lantus' revenue with Basaglar could help the company move on from a costly failure tied to an insulin of its own. Earlier this month, the company called it quits on a massive late-stage effort to develop a once-a-day insulin that would compete with Toujeo and Novo's Tresiba, nixing plans to seek FDA approval after finding some alarming safety signals in its 6,000-patient Phase III program.

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