Zealand: Clouded future for Lantus/Lyxumia fix-flex combination
SELL vs BUY, Fair Value DKK80 vs 152 (-20%)
In an R&D update released today by Sanofi with FY results, the French company announced that the device for the Lantus/Lyxumia combo has recently encountered a technical issue during the last stages of development. This Fix-Flex device development has been more than difficult with several delays but the latest indications pointed to a start in mid-2013. Today’s announcement is therefore an important setback with Sanofi mentioning that the phase III will not start in 2013 and that the development timeline is to be reassessed. In our view, this deals a clear blow to the future of the project, which may well be delayed indefinitely. In view of today’s news, as well as the potential competition of once-weekly GLP-1 such as albiglutide (GSK), dulaglutide (Lilly) or semaglutide (Novo) and lower speculative appeal, we downgrade to SELL with a fair value of DKK80.
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