Multiple Sclerosis ("MS") patients got another treatment option this week as the FDA granted approval to Sanofi's (SNY) Aubagio.
The drug, which was transferred from Sanofi's pipeline to the Genzyme banner following Sanofi's acquisition, enters a crowded, yet lucrative market.
Multiple sclerosis needs new treatment options.
MS is one of the most common neurological disabilities among young people, particularly in women. That does pose a risk for the drug. MS affects young women at a 2:1 rate to men and Aubagio's label requires a negative pregnancy test prior to prescription.
Despite the label warning, there remains a significant need for alternative treatments. Many patients avoid treatment altogether to avoid unwanted side affects. And Aubagio's side affects are less severe than other alternatives, such as Novartis Gilenya, which has been tied to heart rate problems.
Sanofi has priced the drug at $45k annually, which undercuts rivals. Novartis' Gilenya is nearly 30% more expensive. Avonex and Teva's (TEVA) Copaxone are pricier too.
Investors will also need to consider that while Aubagio's ability to reduce relapses is in line with the injectibles, it trails Gilenya. Aubagio reduced relapses by 30%, while Gilenya reduced them by 50%. And, Biogen has filed for approval of its BG-12, an oral drug with better results too.
Given the MS treatment market is nearly $10 billion globally, there's a lot of room for different players.
There are 2.5 million patients globally. And it's a chronic disease requiring a lifetime of treatment. Last quarter, Gilenya racked up over $182 million in sales during its first quarter on the market. Copaxone had sales of nearly $800 million. And, Avonex generated $414 million in sales.
According to Reuters, analysts expect Aubagio will carve $400 million in annual sales by 2016. Some predict Aubagio could reach blockbuster status, depending on whether patients opting to forgo treatment embrace it and whether new MS treatments in the pipeline falter.
Regardless, patients likely welcome the development and new products coming to market. And, Sanofi also hopes to follow up its Aubagio with Lemtrada, which is being refiled and could see FDA action next year. If it gains approval, the two drugs have a good shot at eventually adding nearly $1 billion in annual sales for Sanofi shareholders.
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