Sanofi touts R&D hopefuls as tonic for plunging profits

This is the year that the patent cliff arrives with a vengeance at Sanofi ($SNY). With copycat versions of Plavix and Avapro gobbling market share, the pharma giant predicted a 15% plunge in profits by the end of 2012. But CEO Chris Viehbacher (photo) and his executive team put on a full-court blitz this morning to convince analysts that big changes in its R&D operation are paving the way to major new product approvals.

In addition to five regulatory filings in the U.S. and Europe over the past 7 months, Viehbacher spotlighted the MS drug Lemtrada as its next big potential win. Recently Sanofi has been touting new data on its diabetes drug Lyxumia, or lixisenatide, and the MS drug Aubagio (teriflunomide, which troubled analysts when it failed to best Rebif), the start of a late-stage trial for its PCSK9 mAb, a new formulation of insulin glargine and the JAK-2 inhibitor SAR302503 for myelofibrosis, as well as plans for new mid-stage trials for five compounds in an R&D portfolio with 60 new molecular entities and vaccines.

There are 18 potential new drug launches to look forward to by the end of 2015, said R&D chief Elias Zerhouni, according to the company's live tweets of his remarks. And Zerhouni promised that the early-stage and pre-clinical pipeline is "quite promising."

While Sanofi has been working to ratchet down its legacy R&D costs as it shifts to a more open approach to development work with biotech companies and academic partners, adding Genzyme's substantial research operations helped jack up overall costs by 5.6% last year. Sanofi spent a little more than 4.8 billion euros on R&D last year, with a ratio of 14.4% of R&D expenses to net sales.

With profits sliding, Sanofi has reached the stage where it has to start delivering significant new blockbuster approvals if it expects to convince investors that it is out of the woods, or at least headed in the right direction.

- here's the press release on the results (.pdf)
- read the Bloomberg report