Genzyme rejects Sanofi skepticism on sales

By Toni Clarke

BOSTON (BestGrowthStock) – Genzyme Corp (GENZ.O: ) defended its peak-year sales forecast of up to $3.5 billion for its experimental multiple sclerosis drug Campath after French drugmaker Sanofi-Aventis SA (SASY.PA: ) said on Thursday that the estimate was “unrealistic.”

Sanofi, which has launched a tender offer to acquire the Cambridge, Massachusetts-based biotech company for $18.5 billion, or $69 a share, is seeking to downplay the value of Campath, while Genzyme is looking to play it up.

Chris Viehbacher, Sanofi’s chief executive, has said he expects sales of Campath, which is already approved as a cancer treatment, to be about $700 million, a figure he says is in line with Wall Street estimates.

Sanofi has proposed a “working group” with Genzyme to more precisely gauge the value of Campath, but Genzyme said on Thursday that it does not think a working group is “necessary.”

Mark Enyedy, head of Genzyme’s genetics, oncology and multiple sclerosis business, said in an interview that Genzyme expects Campath sales in the $700 million to $800 million range in 2013, its first full year on the market, but expects peak sales of about $3 billion in 2016 and $3.5 billion in 2017.

He said the $3 billion estimate is in line with the conclusions formed by an independent consulting organization which canvassed hundreds of physicians and payors around the world.

Some analysts have expressed concern that European payors, which are more restrictive than those in the United States, will refuse to pay a higher price for Campath for use in multiple sclerosis than they do for use in cancer.

“I can safely say, through the payor research we’ve undertaken, that we will obtain value-based pricing in Europe,” Enyedy said. “If Sanofi is not giving us any credit in Europe that would account for a significant difference in our estimates for the product.”

Campath will compete, if approved, with numerous other multiple sclerosis drugs, including Biogen Idec Inc’s (BIIB.O: ) Avonex and Tysabri, and, most recently, Gilenya, the first oral MS drug, made by Swiss drugmaker Novartis AG (NOVN.VX: ).

Analysts expect Gilenya to grab a significant share of the multiple sclerosis market, which Genzyme estimates will be worth about $14 billion in 2012, at the time it launches Campath.

Enyedy conceded that Gilenya will likely be a big player, but said the long-term effects of the drug have still to be established.

Campath, which has its own set of potentially serious side effects, is already approved to treat cancer but generated less that $150 million in sales in 2009.

Enyedy said Genzyme has had “significant” discussions with payors in its major markets, including Europe, and is confident it can make its case for pricing that is at least consistent with other MS drugs on the market, including Gilenya, which costs just under $50,000 per patient per year.

There are an estimated 1.2 million to 2 million multiple sclerosis patients worldwide, he said, and though he declined to estimate what percentage of the market the company will gain on a patient basis, he said it will likely be less than 20 percent.

The company is considering various mechanisms for gaining a higher price, including a controlled distribution system under which it would provide Campath to named cancer patients for no charge. The drug would then only be available on a reimbursed basis for MS, but cancer patients who needed it would be able to receive it.

“We will be looking at a variety of approaches,” Enyedy said, “but we are confident it is feasible and we have had a great deal of experience with reimbursement around the world.”

(Reporting by Toni Clarke, editing by Maureen Bavdek, Gary Hill)

Genzyme rejects Sanofi skepticism on sales