Sanofi-Aventis (SNY) recently announced the launch of its oncology drug, Jevtana (cabazitaxel), in the US. The product launch comes a month after the company gained approval from the US Food and Drug Administration (FDA) for the use of Jevtana in combination with prednisone for the treatment of metastatic hormone-refractory prostate cancer (mHRPC) patients who were previously treated with a Taxotere (docetaxel)-containing treatment regimen.
Jevtana’s approval came about three months before the official FDA action date of September 2010. Phase III results on Jevtana showed that treatment with Jevtana in combination with prednisone resulted in a statistically significant reduction in the risk of death compared to treatment with mitoxantrone and prednisone.
New Option for Prostate Cancer Patients
The launch of Jevtana provides advanced-stage prostate cancer patients with a new treatment option. Being the only FDA approved regimen that significantly improves overall survival in previously treated patients, Jevtana should see significant uptake on launch. Jevtana is currently under regulatory review in other territories, including the European Union.
Prostate cancer remains the second most common cause of cancer death in the US and it is estimated that about 217,730 new cases of prostate cancer will be detected in the US in 2010. About 32,050 men are expected to die from prostate cancer in 2010.
Expanding Oncology Pipeline
Sanofi’s leading oncology products are Taxotere and Eloxatin. The company is working on building its oncology portfolio and currently has a wide range of novel agents in its oncology pipeline including BSI-201, alvocidib, and aflibercept among others. While some of these candidates are being developed by Sanofi itself, others are being developed in collaboration with companies like BiPar Sciences, Regeneron Pharmaceuticals (REGN), Exelixis (EXEL), Micromet (MITI) and Merrimack among others.
Moreover, Sanofi has been actively pursuing in-licensing agreements and acquisitions to expand its oncology pipeline. The company recently entered into a global collaboration and licensing agreement with privately-held biopharma company, Ascenta Therapeutics, under which it will have access to several early-stage oncology agents.
Sanofi also announced its intention to acquire TargaGen Inc., a privately-held US biopharmaceutical company, focused on the development of candidates for the treatment of certain types of leukemia, lymphoma and other hematological malignancies and blood disorders.
Neutral on Sanofi
We currently have a Neutral recommendation on Sanofi, which is supported by a Zacks #3 Rank (Hold). Our biggest concern for the stock is the high exposure to generic risk on many of its leading franchises, especially Lovenox. However, we are encouraged to see Sanofi’s progress with its pipeline.
While new product launches should make significant revenue contributions in the early part of the decade, we expect Sanofi to continue look to contain operating costs in order to grow earnings in the face of weakening sales of some of its biggest products. This should help keep earnings at positive, albeit modest, growth over the next few years.
We also expect Sanofi to grow revenue through additional partnering deals and acquisitions.
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