Les mauvaises nouvelles s’accumulent pour Sanofi

published on Wednesday, August 17, 2022 at 2:30 p.m.

Painful August for Sanofi. The pharmaceutical giant, whose image had already suffered due to his difficulties in developing an anti-Covid vaccine, now worries the markets in the face of a host of bad news.

“Sanofi is finalizing the global clinical development program for amcenestrant,” the group announced on Wednesday, lowering its share price by nearly 5% on the Paris Stock Exchange.

This molecule was intended to fight certain advanced breast cancers. But Sanofi has taken note of the insufficiently conclusive clinical trials.

For the group, this is new bad news after the beginning of August already weighed down by an unprecedented lack of confidence in the markets for several years, having lost its title by more than 15% since July.

It is true that Sanofi’s image had already faded among the general public due to its delays and difficulties in developing a vaccine against covid.

However, this topic has never really worried investors. However, if Sanofi’s recent problems are less visible to the general public, they are seen as far more problematic for its prospects.

Markets reacted badly to the failure of amcenestrant in a context where Sanofi had focused heavily on fighting cancer in recent years, to the detriment of the diabetes market in particular.

Certainly, unlike smaller pharmaceutical groups, an isolated failure does not threaten Sanofi’s future, but it risks making the group less attractive to investors.

According to analysts at Cowen Bank, amcenestrant’s sales should have accounted for €350m in 2027, compared to revenue of roughly €38bn earned by the group last year.

For some observers, what is in question is mainly the communication of the group: the poor results of the treatment had been known since March, but Sanofi did not decide to abandon it immediately.

“Investors, with good reason, will doubt the speech of the leaders”, comments Wimal Kapadia, an analyst at the firm Bernstein, quoted by the Bloomberg agency.

– Concerns about a dispute –

But more generally, the failure of this cancer drug has fueled a major concern among analysts at Sanofi: is the group relying too heavily on its flagship drug, Dupixent?

This drug, used in particular against asthma and certain skin diseases, currently allows Sanofi to see life in pink with sales on the rise. But Dupixent now accounts for a fifth of the group’s revenue, and investors are concerned it is struggling to develop promising new treatments.

Shortly before stopping amcenestrant, Sanofi had already worried the markets by suspending trials of a treatment for multiple sclerosis, tolebrutinib.

It is not, this time, a definitive resignation. Serious problems have been detected in some patients, and Sanofi needs to establish if there is a direct link, before possibly resuming trials.

Even so, this interruption will constitute, at the very least, a considerable setback. And his announcement is all the less welcome as it comes amid renewed concerns on another front, this time the judiciary.

Investors are concerned about the financial fallout from a dispute over a treatment, Zantac, long sold in the United States and Canada for heartburn but withdrawn from the market in 2019.

In fact, studies have established that this treatment breaks down in the body into a carcinogenic component, even if it hasn’t been shown to actually cause cancer.

However, the first trials will open this month in the United States, with patients accusing Sanofi and other groups of contributing to their cancer by selling Zantac.

Is this for Sanofi the beginning of a case similar to that of Dépakine? The group has been facing justice for a long time because of this antiepileptic responsible for multiple disorders in children exposed in the womb.

It is a bit early to say, however, some analysts stress, who consider it difficult to establish a link with a treatment as punctual as the painkiller, and for which Sanofi reacted quite quickly from the first worrying studies.

“The possible impact seems difficult to quantify today,” say Oddo analysts, who consider the market reaction “excessive.”

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