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Pipeline Setbacks at Sanofi

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Recently, Sanofi (SNY - Free Report) announced negative top-line phase III data on oncology candidate, iniparib and anticoagulant, otamixaban. Both phase III studies did not meet the primary endpoint. Following the dismal results, the company has decided to discontinue development of both iniparib and otamixaban.

A randomized phase III study (ECLIPSE, n = 780) evaluated the efficacy and safety of iniparib in treatment naïve squamous non-small cell lung cancer patients. The study compared iniparib as an adjunct to Gemzar (gemcitabine)/Paraplatin (carboplatin) versus a Gemzar/Paraplatin regimen. It was found that the addition of iniparib to Gemzar and Paraplatin did not improve the overall survival rate. Additionally, both arms of the study showed similar results in terms of safety.

Moreover, iniparib was also being developed for platinum-resistant ovarian cancer. However, top-line data from a phase II study did not support further progress of the candidate in this indication.

Based on these results, Sanofi has decided to stop development of iniparib.

Meanwhile, a multi-center, randomized, double-blind active-controlled phase III study (TAO, n >13,000) evaluated the use of otamixaban versus heparin plus Integrilin in patients with non-ST elevation acute coronary syndrome (NSTE-ACS) with early invasive strategy planned. In the study, otamixaban demonstrated lower-than-expected efficacy and did not exhibit better risk-benefit than the comparator arm.

We are disappointed with the pipeline setbacks at Sanofi. We remain concerned about the generic erosion confronting most of Sanofi’s key drugs including Plavix, Avapro, Lovenox, Taxotere, Eloxatin and Xatral. The genericization of Avapro and Plavix is expected to negatively impact Sanofi’s business net income by around €800 million in the first half of 2013.

Sanofi is looking to combat headwinds by containing operating costs. Additionally, new product launches should make significant revenue contributions in the upcoming quarters.

Sanofi carries a Zacks Rank #3 (Hold). Companies that currently look attractive include Santarus, Inc. , Jazz Pharmaceuticals (JAZZ - Free Report) and Salix Pharmaceuticals . All three carry a Zacks Rank #1 (Strong Buy).

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