Sanofi ( SNY - Analyst Report ) recently announced that the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) recommended the approval of its diabetes candidate, Lyxumia (lixisenatide). Sanofi is looking to get Lyxumia approved for glycemic control in patients with type II diabetes, who are above 18 years, in combination with oral glucose-lowering medicinal products and/or basal insulin when these, together with lifestyle management, do not provide adequate glycemic control.

The European Commission (EC) is expected to take a final decision on Lyxumia in the next 2 to 3 months. The company plans to file for US approval in December 2012.

The CHMP rendered a positive opinion on Lyxumia on the basis of the GetGoal phase III program. The GetGoal program was initiated in May 2008 and consisted of 11 trials, which enrolled more than 5,000 type II diabetes patients in total. The candidate demonstrated a promising efficacy and tolerability profile in the trials. Sanofi in-licensed Lyxumia from Zealand Pharma.

The diabetes market, while crowded, represents significant commercial potential. Key players in the diabetes market include Merck ( MRK - Analyst Report ) , Eli Lilly ( LLY - Analyst Report ) and Novo Nordisk ( NVO - Analyst Report ) among others.

We are pleased with Sanofi’s progress with its pipeline. Over the last few months, several of Sanofi’s pipeline candidates gained approval including US approval of Aubagio (teriflunomide) for relapsing forms of multiple sclerosis (RMS) and US approval of Zaltrap (aflibercept) as a combination therapy for treatment-experienced patients suffering from metastatic colorectal cancer. Recently, the CHMP also recommended the approval of Zaltrap for the aforementioned indication. We note that Sanofi has a worldwide collaboration with Regeneron Pharmaceuticals Inc. ( REGN - Analyst Report ) for the development and commercialization of Zaltrap.

We expect Sanofi to continue to contain operating costs in order to increase earnings in the face of weakening sales of some of its biggest products. We also expect the company to pursue bolt-on acquisitions.