1 Rare Disease With an Array of Drugs


French drugmaker Sanofi (NYSE: SNY) announced good news from its recent phase 3 trial of eliglustat tartrate, a drug targeting Gaucher disease. The trial met its primary endpoint of statistically significant improvement in spleen size at nine months for patients taking the drug. No safety concerns were raised during the study.

Crowded house?
Gaucher disease affects less than 10,000 people across the world. But prospective treatments for this rare disease aren't quite so rare these days.

Sanofi already maintains a significant presence in the market for Gaucher disease with its Cerezyme injection. Cerezyme is considered the standard of care for patients with type 1 of the disease.

However, Shire PLC (Nasdaq: SHPG) has made inroads with its Vpriv drug. Shire trumpeted clinical data in June that showed that patients receiving Vpriv experienced better lumbar spine bone mineral density than patients taking Cerezyme. The FDA granted orphan status to Vpriv in 2009, with the European Commission following in 2010. The drug is currently approved for use in 40 countries.

Pfizer (NYSE: PFE) and partner ProtalixBioTherapeutics (NYSE: PLX) also compete in the Gaucher disease drug market. Pfizer markets Elelyso in countries other than Israel, where Protalix owns the rights for the drug. The FDA approved Elelyso in May, but the drug failed to gain European approval because of Vpriv's orphan exclusivity.

Elbow room
With two rival drugs and a product already viewed as the standard of care, why would Sanofi move forward with yet another drug for this tiny market?

For one thing, all of the other products are injections. Eliglustat tartrate, though, is a capsule taken orally. This convenience gives the drug an advantage.

Sanofi also undoubtedly recognized that Cerezyme's dominance couldn't last forever. If the company didn't take some action, its market share likely would erode with challenges from Shire and the Pfizer/Protalix alliance.

Price could be another tactic for Sanofi to elbow its way past rivals. The company makes around $200,000 per year per patient with Cerezyme, the most expensive Gaucher disease drug. Shire charges $170,000 for Vpriv. Pfizer and Protalix offer Elelyso at the relative bargain price of $150,000. Any price for eliglustat tartrate at the low end of this price range would likely be attractive for health-care payers.

Foolish take
Sanofi's phase 3 results represent good news for the company and its shareholders. More importantly, those suffering from Gaucher disease receive promise of a more convenient treatment, assuming the drug gains regulatory approval.

While Sanofi faces challenges from the expiration of some patents, including Eloxatin and Plavix, the company has some solid pipeline candidates. Its valuation of less than 12 times forward earnings, combined with a nice dividend yield approaching 4%, make this stock one that investors might want to adopt for their portfolios.

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