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Sanofi's (SNY) LixiLan Positive in Phase III Diabetes Study

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Sanofi (SNY - Free Report) reported positive top-line data from the second of two pivotal phase III studies (LixiLan-L) on its type II diabetes candidate, LixiLan. LixiLan, a combination of Sanofi’s Lantus (insulin glargine, 100 units/mL) and Lyxumia (glucagon-like peptide-1 receptor agonist), met the primary endpoint of the study.

Results demonstrated that patients treated with LixiLan witnessed a statistically superior reduction in average blood glucose over three months compared to Lantus. Overall, LixiLan had a safety profile reflecting those of Lantus and Lyxumia.

We remind investors that Sanofi had announced positive data from the first phase III (LixiLan-O) study on LixiLan in July this year. Based on results from these two studies, Sanofi intends to submit regulatory applications for LixiLan in the U.S. in the fourth quarter of 2015 and the EU in the first quarter of 2016.

According to the company, LixiLan could provide an additional treatment option to approximately 50% of patients who are unable to maintain their average blood glucose levels despite treatment with basal insulin.

We note that Sanofi’s diabetes business is under significant pressure with its best-selling diabetes drug, Lantus, facing increasing competitive pressure at the payor level and biosimilar competition in some eastern EU countries.

Sanofi’s diabetes segment recorded global sales of €3.8 billion in the first half of 2015, reflecting a year-over-year decline of 3.5%. Given that Sanofi is currently looking to make up for the loss of revenues in the diabetes segment with the launch of new products like Toujeo and Afrezza, LixiLan’s approval would be a huge boost for the company.

Sanofi is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Dr. Reddy's Laboratories Ltd. (RDY - Free Report) , Gilead Sciences Inc. (GILD - Free Report) and Regeneron Pharmaceuticals, Inc. (REGN - Free Report) . All three carry a Zacks Rank #1 (Strong Buy).

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