Regeneron's Sanofi deal finally turns a profit, thanks to Dupixent

More than 10 years after Sanofi and Regeneron joined forces in a high-profile antibody drug partnership, the tie-up has recorded its first-ever profits—no thanks to the PCSK9 laggard Praluent, but with big bouquets for hard-driving Dupixent.

Fueled by Dupixent's $557 million in second-quarter sales, Regeneron on Tuesday reported that its Sanofi antibody partnership posted a $39 million profit, a big turnabout from the same period last year, when it cost Regeneron $69 million. 

Sanofi and Regeneron first joined forces way back in 2007, agreeing to split U.S. profits and losses 50-50 and ex-U.S. proceeds on a sliding scale. Along the way, Regeneron has opted to co-promote Dupixent, now approved to treat severe eczema, asthma and nasal polyps; cholesterol-fighter Praluent and the rheumatoid arthritis med Kevzara in the U.S. 

Sanofi recorded $557 million in Dupixent sales worldwide in Q2, plus $74 million for PCSK9 cholesterol drug Praluent and $56 million for rheumatoid arthritis med Kevzara. Dupixent and Kevzara beat analyst expectations, while Praluent fell short. 

SVP of commercial operations Marion McCourt said about 80% of asthma patients starting Dupixent haven’t taken a biologic before, while the rest are switches from rivals such as GlaxoSmithKline's Nucala. Both asthma and atopic dermatitis—a.k.a. eczema—were "major drivers" for the quarter, she added.

Dupixent will get another boost of fuel from a FDA nod, granted toward the end of Q2, to treat adults with nasal polyps caused by chronic sinus problems.

Regeneron CEO Len Schleifer said on Tuesday's call the drug’s combination of uses is "really resonating well" for patients and prescribers. Dupixent treats maladies that patients often suffer concurrently, so its ability to cover all of them is a "real advantage," he added. 

Praluent and Kevzara haven't been as successful as the superstar Dupixent, though, and that could threaten the partners' profits going forward. On Tuesday’s call, Schleifer declined to answer an analyst’s question about whether the companies would make the tough decision to pull the plug on Praluent after a launch that's never lived up to early commercial expectations.

Last year, Regeneron's share of partnership losses amounted to $227 million, an improvement over the $443 million it lost in 2017.

Despite the partners' success advancing meds to the market, they ended their R&D collaboration at the end of 2017. The commercialization agreements remain in place.

Aside from earnings on Tuesday, Sanofi and Regeneron also reported some additional wins for Dupixent. The drug picked up an approval to treat adolescents with moderate-to-severe atopic dermatitis in Europe and posted positive phase 3 topline results for severe atopic dermatitis in children ages 6 to 11.