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Sanofi (SNY - Analyst Report) recently announced that the US Food and Drug Administration (FDA) has accepted the marketing application of its type II diabetes candidate, lixisenatide. The company is looking to get lixisenatide approved for the treatment of adults with type II diabetes.

The company submitted the New Drug Application for lixisenatide on the basis of the GetGoal program. The program initiated in May 2008, consisted of 11 trials and enrolled more than 5,000 type II diabetes patients. Lixisenatide demonstrated a promising efficacy and tolerability profile in the trials. Sanofi had in-licensed lixisenatide from Zealand Pharma.

We remind investors that the European Commission (EC) cleared lixisenatide (brand name: Lyxumia in EU) for glycemic control in adults suffering from type II diabetes on Feb 1, 2013. The drug is expected to be launched by the end of the first quarter of 2013.

The EC approved Lyxumia in combination with oral glucose-lowering medicinal products and/or basal insulin when these, together with lifestyle management, fail to provide adequate glycemic control.

We note that Sanofi is looking to combat the generic threat confronting most of its key drugs by signing deals, making acquisitions and introducing new products. If lixisenatide is cleared in the US then it will boost Sanofi’s top-line significantly since as the type II diabetes market offers significant commercial potential.

We believe that the pipeline at Sanofi must deliver to combat the generic threat. We are pleased with Sanofi’s efforts to develop its pipeline. Over the past few months, several of Sanofi’s candidates gained approval including the US approval of Aubagio (teriflunomide) for relapsing forms of multiple sclerosis (RMS) and the US and EU approval of Zaltrap (aflibercept) as a combination therapy for treatment-experienced patients suffering from metastatic colorectal cancer.

Sanofi carries a Zacks Rank #3 (Hold) in the short run. Pharma companies that currently look better-positioned include Novo Nordisk (NVO - Analyst Report), Eli Lilly and Company (LLY - Analyst Report) and Bayer (BAYRY - Analyst Report). All three companies carry a Zacks Rank #2 (Buy).

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