Sanofi keeps the faith in MS and eyes a new dawn for Genzyme

Despite an FDA rejection and changing winds in the field of multiple sclerosis, Sanofi ($SNY) believes its Genzyme unit is on an upward trajectory, talking up potential deals and could-be blockbusters for its pricey acquisition.

As it stands, the state of the Sanofi-Genzyme union is likely not what management hoped for three years ago. Back in 2011, Genzyme used the potential of its top prospect, the MS treatment Lemtrada, to drive up its asking price, eventually convincing Sanofi to pony up more than $20 billion for the company. But the promise that swayed Sanofi wasn't enough for the FDA, which stingingly rejected the annual treatment in December, telling the company to conduct another costly, time-consuming Phase III trial before coming back.

But Sanofi remains bullish as ever, maintaining its optimism for both Lemtrada and Genzyme as a whole. On the former, the company has resubmitted its injected drug without that requested new trial, expecting to get a second opinion from the FDA in the fourth quarter of this year. This week, the company is touting new data from a Lemtrada extension study, in which the drug's effects proved stable over four years with no new risks.

Meanwhile, the MS field has drastically changed since Sanofi signed on to carry the torch for Lemtrada. Tecfidera, an oral treatment from Biogen Idec ($BIIB), debuted in April 2013 and has minted more than $2 billion in sales ever since, shifting a landscape long dominated by Teva ($TEVA) and its soon-to-come-off-patent Copaxone. Analysts expect oral therapies, including Sanofi's own Aubagio, to gradually outpace the injected treatments that largely make up the standard of care.

But despite the crowded, evolving market, Genzyme sees a space for Lemtrada to compete and thrive, executives told Reuters.

"I'm confident in the U.S. approval and I'm confident in how the product will perform and be utilized," Genzyme's Senior Vice President Bill Sibold told the news service. "... The efficacy is just too good."

Beyond its MS franchise, the Boston-headquartered rare disease stalwart is "very active" on the M&A scene, Sibold told Reuters, talking up the weight of Sanofi's checkbook as the company hunts for external innovation.

- read the study results
- here's the Reuters story

Editor's note: An earlier version of this story misattributed a quote from Genzyme's Bill Sibold.