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Recently, Sanofi (SNY - Analyst Report) received some encouraging news with the European Commission (EC) approving its candidate, Lemtrada, for adults suffering from relapsing remitting multiple sclerosis (RRMS).

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 Lemtrada in Jun 2013.

The CHMP issued a positive opinion on Lemtrada based on two pivotal phase III trials, which were completed in 2011. In the first study, CARE-MS I, Lemtrada met the first primary endpoint. Results showed that treatment with two annual cycles of Lemtrada as compared to Rebif resulted in a 55% reduction in the relapse rate over the two-year span of the study.

In the second study, CARE-MS II, Lemtrada met both the primary endpoints. Results showed that treatment with Lemtrada resulted in a 49% reduction in the relapse rate compared to Rebif, over a two-year period.  Additionally, Lemtrada showed a 42% reduction in the risk of sustained accumulation (worsening) of disability.

We remind investors that Lemtrada is under review for the above mentioned indication in the U.S. The U.S. Food and Drug Administration (FDA) is expected to render a decision on Lemtrada’s marketing application towards the end of this year.

We note that Lemtrada is the second RRMS drug from Sanofi to receive EC approval in the last few weeks. On Aug 30, 2013, the EC approved Aubagio as a once-daily treatment for adults suffering from RRMS.

Sanofi carries a Zacks Rank #5 (Strong 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.

Not all large-cap pharma companies are performing as badly as Sanofi. Novo Nordisk (NVO - Analyst Report), Roche (RHHBY - Analyst Report) and Bayer (BAYRY - Analyst Report) are well placed with a Zacks Rank #2 (Buy).

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