Fri Jun 26, 2009 7:33am EDT
By Ben Hirschler, European Pharmaceuticals Correspondent
LONDON (Reuters) - The history of past drug scares suggests concerns over the safety of Sanofi-Aventis’s (SASY.PA) diabetes treatment Lantus will hit sales, whether or not a suggested link to cancer proves real.
Shares in the French drugmaker sank 7 percent on Friday, extending losses from the previous session, on growing concern that researchers are about to publish a damaging analysis of the company’s modern, or analog, insulin drug.
“Our information is that indeed a study is likely to be published soon raising the possibility of a link between Lantus use and a certain cancer type,” Sanford Bernstein analyst Tim Anderson said in a research note.
“We understand this will not come out in a small medical journal, but rather one of the major medical journals and it will be the first time that such a high-profile analysis has been published linking the drug to cancer in humans.”
Although nothing is in the public domain yet, the widespread talk is likely to negatively influence both doctors’ and patients’ perceptions and uptake of Lantus.
“Even if Lantus were cleared of a potentially increased cancer risk, media focus will likely dramatically alter the growth profile,” said Andrew Baum of Morgan Stanley.
Sanofi is relying on Lantus, which many analysts expect to be its second-biggest seller this year, to offset a fall in sales of other products, such as Plavix and Lovenox, that could soon face generic competition.
It cannot afford for Lantus sales to stall.
Sanofi has not commented on future studies about the safety of the drug, but a spokesman reiterated that past data from trials involving more than 70,000 patients, as well as data from post-marketing surveillance, showed a good safety profile.
The fear is that Sanofi might suffer the same fate as GlaxoSmithKline (GSK.L) in 2007, when safety concerns over its diabetes drug Avandia saw prescriptions tumble almost 50 percent in the United States within six months.
JP Morgan analyst Alexandra Hauber estimates that a 50 percent reduction in global Lantus sales forecasts from 2010 onwards would cut 2010-13 earnings by between 7 and 13 percent.
Most industry analysts expect Lantus to generate sales of around $4 billion this year and consensus forecasts compiled by Evaluate Pharma suggest this will rise to $6.4 billion in 2014, making it the world’s fifth biggest-selling medicine by then.
At the moment, analysts are holding fire on revising their forecasts, but that could change when any long-term safety data is published.
A link between Lantus and cancer does make some sense at a scientific level, according to analysts, and the issue could also affect other insulin analogues, such as Novo Nordisk’s (NOVOb.CO) Levemir.
In fact, the theoretical possibility of Lantus being a mitogenic, cancer-causing compound has been around for nearly a decade, said Bernstein’s Anderson, noting that U.S. Food and Drug Administration review documents dating back to 2000 mentioned findings of malignancies in rodents.
For Denmark’s Novo Nordisk, whose shares fell nearly 4 percent on Friday, the issue is something of a two-edged sword, according to Sam Fazeli of Piper Jaffray.
Novo could potentially gain from problems at its rival, and it might also benefit from any shift in demand toward its short-acting insulins. But there is a risk that users will be wary of all modern insulins and there may be a more general switch to older, cheaper insulin products.