6. Sanofi


R&D budget: €5.89 billion ($6.66 billion)
Change from 2017: +7.6%
Total 2018 revenue: €34.46 billion ($38.92 billion)
R&D budget as percentage of revenue: 17.1%

Sanofi is another company that experienced a change in leadership last year, in this case specifically within R&D as Elias Zerhouni, M.D., retired, leaving new hire and ex-Roche executive John Reed, M.D., Ph.D., to take charge of the French drugmaker’s pipeline.

The change in personnel was accompanied by a review of the pipeline, with 13 development-stage projects and 25 research programs discontinued as the company increased its focus on oncology and other specialty care areas such as immunology, rare diseases and rare blood disorders, with major changes made to some long-standing R&D collaborations as the company tries to be less dependent on external partners. Around 50% of Sanofi's pipeline stems from internally derived molecules at the moment, but it hopes to up that proportion to 70% over the next five to 10 years.

Last year, a long-standing and productive antibody alliance with Regeneron that generated some of Sanofi’s newest therapies—including cholesterol therapy Praluent, Dupixent for eczema, and rheumatoid arthritis therapy Kevzara—came to an end. The two companies have since parted ways in another program focusing exclusively on immuno-oncology.

The restructured I-O pact has been reduced to just two early-stage bispecific antibodies in order to allow Sanofi to focus more on in-house projects, including a multispecific T-cell engager program.

Sanofi has also been working with Alnylam on gene-silencing therapies for five years, and after a series of tweaks to the arrangement in 2018—including returning rights to ATTR amyloidosis drug patisiran to the U.S. biotech with Sanofi claiming total ownership of hemophilia candidate fitusiran—the research collaboration came to an end earlier this year. The two companies will however still work together on drugs advanced into development, and in a triangular twist, Regeneron has now forged an R&D pact with Alnylam.

At the end of the year, Sanofi sucked out of a four-year alliance with MyoKardia for heart disease therapies, centered on three cardiomyopathy programs including lead drug mavacamten. In the last couple of years, Sanofi has been shifting its research priorities, focusing now more on cancer, where it had looked to exit just a few short years ago.

It also decided to exit anti-infectives R&D last year, out-licensing the bulk of its infectious disease assets to German biotech Evotec.

The big news for Sanofi on the M&A front last year was that it closed on a deal to buy Ablynx for around $4.8 billion, riding out rival Novo Nordisk to claim rare blood disorder drug Cablivi (caplacizumab) and a big pipeline of nanobody therapeutics. That deal came shortly after Sanofi bought Bioverativ for $11.6 billion, which formed the basis of its rare blood disorder franchise, and also after the company lost out on attempts to buy Medivation and Actelion. CEO Olivier Brandicourt said earlier this year that Sanofi had set aside around $20 billion for bolt-on deals, so it still has around $7 billion to play with.

Cablivi was one of three big product launches for Sanofi in 2018. PD-1 inhibitor Libtayo (cemiplimab)—Sanofi’s first immuno-oncology drug—was cleared for metastatic cutaneous squamous cell carcinoma and could reach $1.4 billion in sales at peak thanks to a lack of competition in this form of skin cancer, according to analysts. And Dupixent was approved for asthma, opening up a market that some analysts say could reach $2.5 billion for the drug on its own.

Sanofi’s R&D spend saw one of the highest increases last year, despite the project cull, and the company says that is because its late-stage pipeline is starting to deliver the goods.

A clutch of new drugs started phase 3 testing last year. That included gene-silencing drug fitusiran for hemophilia A and B, in-house-developed isatuximab for multiple myeloma—an anti-CD38 antibody that could be a rival to Johnson & Johnson’s $2 billion blockbuster Darzalex—and anti-complement C1s antibody sutimlimab, a Bioverativ drug for rare blood disorder cold agglutinin disease.

Isatuximab has several phase 3 trials underway and has just reported positive results in its first pivotal study—called ICARIA—which looked at the drug in multiple myeloma patients in whom multiple prior therapies had failed. An antibody-drug conjugate that targets an oncofetal antigen called CEACAM5 is also heading for pivotal trials this year, says Sanofi.

A lot of the R&D investment is however going on follow-up indications for Dupixent, Kevzara and other already-marketed products.

There were casualties in the pipeline as well last year, including SAR425899, a midstage dual GLP-1/glucagon receptor agonist for diabetes that was terminated in November because of tolerability problems as well as a GLP-1/GIP agonist. Sanofi is competing with Eli Lilly to bring dual agonists through development.

Two cancer ADCs also failed to make progress—CA6-targeting SAR566658, which was in a phase 2 trial in triple-negative breast cancer, and anti-LAMP1 SAR428926 for solid tumors—while progressive multiple sclerosis therapy GZ402668 was also dropped.

Check out Sanofi’s pipeline here.

6. Sanofi

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