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Sanofi (SNY - Analyst Report) announced that its oral drug Aubagio 14 mg, has gained approval from the European Commission (EC). The EC approved Aubagio as a once-daily treatment for adults suffering from relapsing remitting multiple sclerosis.

The approval did not come as a surprise as the European Medicines Agency's Committee for Medicinal Products for Human Use had recommended the approval of Aubagio in Mar 2013.

The EU approval came on the basis of encouraging data from two phase III studies – TEMSO and TOWER. In the studies, Aubagio demonstrated significant efficacy in reducing the annualized relapse rate and the time to disability progression as compared to placebo at two years.

We note that Aubagio is currently marketed in the U.S. as a once-daily treatment for patients with relapsing forms of multiple sclerosis. Aubagio is under review in several other countries. In the second quarter of 2013, Aubagio generated sales of €33 million in as compared to €20 million in the first quarter of 2013. We believe that Aubagio possesses significant commercialization opportunity.

We note that apart from Aubagio, FDA-approved oral multiple sclerosis therapies include Novartis’ (NVS - Analyst Report) Gilenya and Biogen Idec’s (BIIB - Analyst Report) Tecfidera.

Sanofi carries a Zacks Rank #4 (Sell). We are concerned about generic erosion confronting most of Sanofi’s key drugs. Additionally, recent pipeline failures (oncology candidate --  iniparib and anticoagulant -- otamixaban) have put immense pressure on Sanofi’s pipeline.

Right now, Biogen and Gilead Sciences Inc. (GILD - Analyst Report) look more attractive in the pharma space with a Zacks Rank #1 (Strong Buy).

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