French pharmaceutical giant Sanofi announced it is leaving the field of diabetes research. They will still sell the popular long-acting Lantus insulin pens, but will no longer devote funds to research either diabetes or cardiovascular disease.
New Sanofi CEO Paul Hudson made the decision in order to boost profit margin to 32 percent by 2025 for the company. The company also aims to cut costs by 2 billion euros by 2023. Hudson comes from Swiss pharmaceutical group Novartis, and has only been at Sanofi since September.
Why the pivot?
Sanofi’s switch to devoting research to drugs for cancer and other conditions was made for several reasons. Among the top catalysts were:
- Cancer drugs require fewer and smaller clinical trials, and less money to develop
- Increasing government investigations into sky-high insulin prices
No longer a monopoly
Leaving diabetes research is a huge change for Sanofi, who has been one of three major players in the insulin market, along with Novo Nordisk and Eli Lilly. Sanofi is the biggest seller of insulin around the world, but they had been falling behind in offering the latest in technology for diabetes.
In addition, the patent expired on their biggest seller, Lantus, in 2015, and hence competing biosimilars entered the market, causing more competition.
New focus for Sanofi
According to Hudson, the company will now focus on hemophilia, oncology, hematology, rare diseases, and neurology. Specific areas of focus will be breast cancer, MS, eczema, and asthma.
Meanwhile, Sanofi still has a consumer healthcare division which sells Cialis and Tamilfu, among other popular nonprescription drugs, that will remain a separate business.
The news came out just one day after Sanofi acquired cancer drug company Synthorx for $2.5 billion.