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Lilly wins EU backing for copy of Sanofi's top insulin Lantus

By Ben Hirschler

LONDON (Reuters) - European regulators have for the first time recommended approval of a copycat insulin for diabetics, posing a threat to French drugmaker Sanofi SASY.PA whose top-selling Lantus is now set to face a cheaper rival in 2015.

The new drug, known as Abasria, is made by U.S. rival Eli Lilly LLY.N, which has developed it as a so-called biosimilar version of Sanofi's $8 billion-a-year Lantus, or insulin glargine.

The green light from the European Medicine Agency (EMA) for Lilly and its partner Boehringer Ingelheim marks another step forward for biosimilar medicines, which are copies of biotech drugs that promise to cut the cost of treatment.

Industry analysts expect the new copycat version to be priced significantly lower than Lantus, in order to attract patients and healthcare providers.

Because biotech drugs are made from living cells it is impossible to manufacture exact copies, as happens with simple chemical medicines, so European regulators have devised an approval process for products that are similar enough to do the job.

The EMA, which announced its recommendation at the end of a monthly meeting of experts in London, said clinical studies had shown Abasria to have a comparable quality, safety and efficacy profile to Lantus.

The positive recommendation from the agency's Committee for Medicinal Products for Human Use (CHMP) will now go to the European Commission for final approval, but Lilly will not be able to launch immediately as Sanofi still has patent protection.

CASH COW

With the European compound patent on Lantus set to expire in May 2015 in most markets, Deutsche Bank analyst Mark Clark said he expected Lilly to start rolling out the drug for type 1 and type 2 diabetes from around the middle of next year.

Although a challenge for Sanofi, Clark said the financial impact of European approval of biosimilar Lantus would be limited as Europe accounted for only 14 percent of the product's global sales of 5.7 billion euros ($7.8 billion) last year.

The U.S. market accounts for two-thirds of Lantus sales and the rules for biosimilars are different there, suggesting no direct read-across from the EMA decision.

Sanofi is also developing an improved successor to its long-running cash cow. This follow-on, Toujeo, could also be ready for launch in mid-2015.

The EMA said a pharmacovigilance plan would be implemented for Lilly's product as part of its marketing authorization. Lilly's drug was previously known as LY2963016.

($1 = 0.7359 Euros)

(Editing by Kate Kelland and Sophie Hares)

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