An FDA advisory panel recently recommended the approval of Sanofi's (NYSE:SNY) multiple sclerosis drug, Lemtrada. However, that approval came among some mixed and contradictory opinions about the drug and the efficacy of Sanofi's trials.

On Nov. 13, the FDA panel voted 12-6 that Sanofi had provided enough evidence of Lemtrada's efficacy in patients with relapsed MS, but at the same time voted 11-6 that the company's trials had not been conducted thoroughly enough to properly assess the drug. After those seemingly contradictory opinions, the panel voted 14-0 that the drug should still be approved in December, despite its potential to cause cancer and other problems.

So, what does all this mean for the future of Lemtrada, one of the main drugs that Sanofi acquired in its $20.1 billion takeover of Genzyme in 2011? Will it still stand a chance in a crowded market split between Novartis' (NYSE:NVS) Gilenya, Biogen Idec's (NASDAQ:BIIB) Tecfidera, Teva Pharmaceutical's (NYSE:TEVA) Copaxone, and Sanofi's own Aubagio?

The importance of Genzyme
In a previous article, I pointed out that Sanofi has two primary areas of strength -- its diabetes business and Genzyme, which focuses on treatments for rare diseases and multiple sclerosis.

Last quarter, the diabetes segment -- which accounts for 20% of its top line -- reported 20% year-over-year growth. Sales at Genzyme, which accounts for 6% of the top line, climbed 21%.

Let's take a look at how Genzyme's drug portfolio fared last quarter.



3Q Revenue

Growth (YOY)

Percentage of Genzyme Revenue


Gaucher disease

$222 million




Pompe disease

$171 milion




Fabry's disease

$129 million





$51 million




Multiple sclerosis

$59 million



Source: Sanofi quarterly earnings report.

Sanofi notably reports the first four drugs together as Genzyme's "rare disease segment," whereas Aubagio is categorized by itself in the MS category. Lemtrada, which was approved in the EU in September, will be Sanofi's second approved MS treatment.

Sales of Aubagio and Lemtrada will become more important over the next year, since both Cerezyme and Fabrazyme, which together account for half of Genzyme's revenue, face rising pressure from Shire's competing treatments for Gaucher disease and Fabry's disease.

According to analysts polled by Thomson Reuters, Lemtrada could generate annual peak sales of $752 million by 2018 -- making it the second most important drug in Genzyme's portfolio after Cerezyme.

The current market for MS treatments
Patients with MS are accustomed to some very bad side effect profiles from current treatments.

There are currently three approved oral treatments on the market, Novartis' Gilenya, Sanofi's Aubagio, and Biogen's Tecfidera. Tecfidera currently has been one of Wall Street's favorite new drugs, with peak sales estimates of $3.3 billion by 2017. Tecfidera is also considered a replacement for Biogen's Tysabri, an infused treatment which can cause liver damage as well as a rare brain infection. It could also replace Biogen's Avonex, a widely used first-line injectable MS treatment.

All of these treatments have adversely affected sales of Teva's Copaxone, an injectable MS treatment which accounts for more than a fifth of its revenue. In addition, Copaxone will face generic competition soon, further fragmenting the market for MS treatments.

Here's a snapshot of the current state of the market leaders in MS treatments.


MS Treatment

Revenue (most recent quarter)

Growth (YOY)



$518 million




$59 million


Biogen Idec


$286 million


Biogen Idec


$403 million


Biogen Idec


$733 million




$1.05 billion


Source: Company quarterly reports.

We can see that demand for older treatments like Copaxone, Avonex, and Tysabri has flattened out, and that demand for newer orally administered treatments like Gilenya is soaring. We can also see the massive threat that Tecfidera poses, reporting $286 million in sales in its second full quarter on the market -- a 49% jump from the previous quarter.

Will Lemtrada be able to squeeze into this crowded market?
With so many treatments on the market, where does that leave Sanofi's Lemtrada? One major disadvantage Lemtrada has is its safety profile. The FDA stated that the treatment had "serious and potentially fatal safety issues", including a higher risk of cancer as well as autoimmune and thyroid diseases.

Lemtrada is also given to patients in annual infused doses -- a far less frequent dosage than that of other infused treatments like Tysabri, which is given to patients every four weeks. Some analysts are hailing Lemtrada's annual infusions as a step toward a long-term "cure" for MS, but skeptics believe that the significant risks may outweigh the benefits.

If approved, Lemtrada will be given to patients with relapsed MS as a second-or third-line treatment. Patients with relapsed MS now have ten different treatment options available -- including Tecfidera, Tysabri, Copaxone, and Aubagio.

The Foolish takeaway
An increased selection of MS treatments is good news for the estimated 250,000 to 350,000 people diagnosed with debilitating neurological disease. Increased competition should spur innovation and lower prices. Yet as a result, the MS market is looking increasingly like the diabetes market -- a crowded place which will only reward the most revolutionary treatments, like Biogen's Tecfidera.

Nevertheless, the FDA panel opinion on Lemtrada was a positive development for Sanofi, since it needs to keep Genzyme's portfolio well-balanced to deal with competitive threats from Shire.

Editor's Note: A previous version of this article included incorrect information regarding Gilenya's side-effects. The Fool regrets the error.

Fool contributor Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.