Memorandum

Sanofi licenses Hanmi Pharmaceutical’s portfolio of long-acting GLP-1 agonist and insulin candidates – November 5, 2015

Executive Highlights

  • Sanofi licensed the long-acting GLP-1 agonist efpeglenatide, the once-weekly basal insulin LAPSInsulin-115, and the once-weekly GLP-1 agonist/basal insulin combination LAPSInsulin Combo from Hanmi Pharmaceuticals.
  • The deal triggers an upfront payment of €400 million (~$434 million) to Hanmi, with the potential for up to €3.5 billion (~$3.8 billion) in development, registration, and sales milestone payments. Hanmi will also earn double-digit royalties on net sales of the products.

Sanofi announced a milestone partnership with Korea-based Hanmi Pharmaceuticals to develop and commercialize Hanmi’s portfolio of long-acting GLP-1 agonist and basal insulin pipeline candidates yesterday morning. The three candidates included are (i) efpeglenatide (HM11260C), a phase 2b GLP-1 agonist with the potential for once-weekly to once-monthly dosing, (ii) LAPSInsulin-115 (HM12470), a phase 1 once-weekly insulin, and (iii) LAPSInsulin Combo, a preclinical once-weekly fixed-ratio GLP-1 agonist/basal insulin combination of efpeglenatide and LAPSInsulin-115. Together, they are known as the “Quantum Project” – a futuristic name for a forward-looking endeavor. The three candidates were all developed using Hanmi’s proprietary LAPSCOVERY technology. Under the terms of the deal, Sanofi will provide Hanmi with an upfront payment of €400 million (~$434 million). Hanmi will also be eligible for up to €3.5 billion (~$3.8 billion) based on development, registration, and sales milestones and will earn double-digit royalties on net sales of the products. While Sanofi gains worldwide commercialization rights, Hanmi will retain an exclusive option to co-commercialize the products in South Korea and China. This deal certainly provides a boost to Sanofi’s mid- to late-stage diabetes pipeline at a challenging time for its marketed diabetes portfolio – read on for the benefits of the deal from Sanofi and Hanmi’s perspectives, what we know about the three candidates included in the agreement, and a look at other companies with long-acting injectable diabetes therapies in their pipelines.

  • This deal represents a welcome revitalization of Sanofi’s mid- to late-stage diabetes pipeline at a challenging time for its marketed diabetes portfolio. Based on Sanofi’s 3Q15 call, management clearly recognizes that the company’s diabetes portfolio is struggling and in need of a boost. Sanofi’s Lantus (insulin glargine) is still indisputably the leader among basal insulins in terms of revenue and market share, but its sales have been flagging as of late due to increasing payer pressure, competition from next-generation insulin analogs, and the arrival of biosimilars. Sanofi has few other diabetes products on the market or in its late-stage pipeline that are likely to be either best-in-class or first-in-class. Toujeo (U300 insulin glargine), Sanofi’s chosen successor to Lantus, has performed well so far but must contend with an increasingly crowded and uncertain market going forward.  Its GLP-1 agonist Lyxumia (lixisenatide) has been long-delayed in the US and will arrive fifth-to-market. The GLP-1 agonist/basal insulin combination LixiLan (lixisenatide/insulin glargine) will be submitted to the FDA by the end of the year and in Europe in 1Q16, making it likely second-to-market after Novo Nordisk’s Xultophy. Sanofi’s phase 3 insulin lispro biosimilar should bring in new sales, but likely not to the same extent as a new branded product. Inhaled insulin Afrezza is arguably the most innovative product in Sanofi’s diabetes portfolio, but its early uptake has been sluggish.
  • Hanmi Pharmaceuticals will benefit from Sanofi’s worldwide diabetes expertise and marketing savvy. This licensing agreement will likely facilitate the products’ entry to US and European markets, where Hanmi has far less of a foothold compared to Asian markets. The terms of the deal certainly represent a large influx of cash for Hanmi – now and in the future – and Hanmi will avoid shouldering the cost (and risk) of financing large phase 3 trials and cardiovascular outcomes trials for these products. The partnership could also help Hanmi gain expertise for an eventual launch of its long-acting GLP-1/glucagon dual agonist (HM12525A), which is currently in phase 1 and is not included as part of the Sanofi licensing agreement.
  • Hanmi entered into an agreement in July to source pens and auto-injectors from Ypsomed for all three candidates included in this agreement. We assume this agreement still stands in light of the new Sanofi licensing partnership.  The Ypsomed agreement also did not appear to include the GLP-1/glucagon dual agonist – this deal possibly marks the first move toward Hanmi “packaging” the three “Quantum Project” candidates together.
  • This deal with Hanmi brings fresh candidates that will allow Sanofi to compete in the next generation of GLP-1 agonists and basal insulins. Novo Nordisk is investigating phase 3 GLP-1 agonist semaglutide for once-weekly dosing and just completed phase 1 studies for a long-acting insulin (LAI287), which raises the possibility of the diabetes giant entering the longer-acting GLP-1 agonist/basal insulin combination arena in the future. PhaseBio plans to advance a once-weekly basal insulin (PE0139) into phase 2a trials and has a once-weekly GLP-1 agonist/basal insulin combination in the preclinical stages. The company’s once-weekly GLP-1 agonist candidate PB1023 was placed on hold as a monotherapy after failing to achieve non-inferiority vs. Novo Nordisk’s Victoza (liraglutide) in a phase 2b trial. AntriaBio has a once-weekly basal insulin (AB101) and a once-weekly GLP-1 agonist/basal insulin combination (AB301) in preclinical development.
  • Dr. Julio Rosenstock (Dallas Diabetes and Endocrine Center, Dallas, TX) offered a look at promising phase 2 data for efpeglenatide at ADA 2015. Efpeglenatide demonstrated impressive dose-dependent reductions in A1c, fasting plasma glucose (FPG), and seven-point daily glucose. In addition, 86% of participants on 4 mg efpeglenatide and 83% on 3 mg efpeglenatide achieved the A1c target of <7% (vs. 23% with placebo) and average weight loss was 3 kg (vs. 0.2 kg with placebo). Dr. Rosenstock noted that, overall, the 3 mg dose of efpeglenatide is fairly similar to liraglutide and the 4 mg dose is slightly better than liraglutide.
  • Dr. Nina Wronkowitz (German Diabetes Center, Düsseldorf, Germany) presented mechanistic data on LAPSInsulin-115 at ADA 2015. LAPSInsulin-115 was shown to have a similar receptor dissociation rate, mitogenic activity, and metabolic activity compared to human insulin, allaying concerns of a potential cancer-inducing effect. Furthermore, Dr. Wronkowitz reported that while regular insulin is known to cause downregulation of the insulin receptor in the chronic setting (>24 hrs), HM12470 does not induce insulin receptor downregulation, which suggests that each unit of HM12470 may have a more prolonged effect than each unit of regular insulin.
  • Also at ADA 2015, Dr. Michael Trautmann (Profil Institute for Clinical Research, San Diego, CA) presented a series of data on the LAPSInsulin Combo. The combination of efpeglenatide and LAPSInsulin-115 demonstrated similar PK/PD profiles to those of each component alone. When administered as a co-formulated once weekly product to rodents with diabetes, the combination of LAPSInsulin-115 resulted in greater A1c reductions than either product alone. Additionally, in a mild type 2 diabetes animal model, the weight gain seen with LAPSInsulin-115 was neutralized by the combination product. In switching studies, switching diabetic mice to treatment with the LAPS combo after an initial 14 days of treatment with glargine resulted in significantly greater A1c decreases at six weeks versus either staying on glargine or switching to LAPS insulin 115. Similar results were seen in studies where mice were initially treated with liraglutide rather than glargine.

Close Concerns Questions:

Q: Will Sanofi eventually license the GLP-1/glucagon dual agonist HM12525A as well?

Q: Sanofi is the first of the major players in the diabetes pharmaceutical industry to add a long-acting GLP-1 agonist/basal insulin combination to its pipeline. Will Novo Nordisk, Lilly, or AstraZeneca follow suit?

Q: What will the development timelines look like for each of the three products?

Q: Is there a chance the products will be commercialized in South Korea and China before the US and Europe?

-- by Helen Gao, Emily Regier, and Kelly Close