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Fabry drug move a blow for Shire, boon for Sanofi
March 15, 2012 / 8:20 AM / 6 years ago

Fabry drug move a blow for Shire, boon for Sanofi

LONDON (Reuters) - An unexpected decision by Shire (SHP.L) to pull its U.S. application to sell Fabry disease drug Replagal is a blow for the firm’s aspirations in treating rare diseases but a boon for rival Sanofi (SASY.PA).

Shares in Shire fell 1.3 percent in early trading on Thursday, following the overnight news. French drugmaker Sanofi, whose Genzyme unit makes the competing medicine Fabrazyme, was up 0.1 percent.

Shire said it decided to drop its bid because the U.S. Food and Drug Administration (FDA) was likely to need more clinical studies before approving Replagal for treating the rare genetic disorder.

Analysts at Jefferies estimated a substantial new trial would take at least two years and was probably not economically justifiable.

The FDA, which in the past had encouraged Shire to file Replagal for approval because of shortages of Fabrazyme, said it was disappointed by Shire’s decision not to proceed.

But analysts said the agency was probably less concerned about the drug supply situation now that Fabrazyme production was returning to normal levels.

Jefferies said removing U.S. Replagal sales would trim Shire’s earnings per share by 2-3 percent - but the move would also hit sentiment about prospects for the company’s ambitions in treating rare genetic disorders.

Deutsche Bank analyst Mark Clark sees an earnings hit of just under 2 percent over the next 3-5 years but said he never expected Replagal to become a major seller in the U.S. market.

“While disappointing - as it will take away from some of the upside to Shire’s outlook this year - we did not view Replagal U.S. as a significant opportunity given that Sanofi is well on its way in restoring full U.S. Fabrazyme supply,” he said.

Both Replagal and Fabrazyme are enzyme replacement therapy for Fabry disease, which causes fat to build up in the body.

Shire had filed in November for FDA approval for Replagal, “in anticipation of a quick review process,” the company said.

Shire has been permitted to supply the drug to the U.S. market after manufacturing problems in 2009 led to short supplies of Genzyme’s Fabrazyme.

The FDA said Shire had also decided to end that treatment programme over the next few months. As a result, the drug will no longer be available to around 140 U.S. patients.

Shire said the agency did not express concerns over Replagal’s safety. But recent interactions with the FDA had led the company to believe that it will require additional controlled trials for approval.

The company said the “likely additional studies would cause a significant delay, and an approval of Replagal for U.S. patients would only be possible in the distant future.”

Replagal has been on the market in Europe since 2001.

Sanofi said earlier this month that it had begun U.S. deliveries of Fabrazyme from its newly approved manufacturing plant in Framingham, Massachusetts. The French company expects a full return to normal supply levels to begin in the second quarter.

Reporting by Ben Hirschler; editing by Paul Sandle

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