August is a painful month for Sanofi. The pharmaceutical group, whose image had already suffered from its difficulties in developing a vaccine against Covid-19, is now worrying the markets in the face of an accumulation of bad news.
“Sanofi is ending the global clinical development program for amcenestrant,” the group announced on Wednesday August 17, lowering its share price by almost 5% on the Paris Stock Exchange. This molecule was intended to fight against certain advanced breast cancers. But Sanofi has taken note of insufficiently conclusive clinical trials.
For the group, this is new bad news after an early August already weighed down by unprecedented distrust in the markets for several years, its title having lost more than 15% since last July. If Sanofi’s image had already faded with the general public because of its delays and difficulties in developing an anti-Covid vaccine, this subject had never really worried investors. However, if Sanofi’s recent problems are less visible to the general public, they are considered to be much more problematic for its prospects.
The markets reacted badly to the failure of amcenestrant in a context where Sanofi had largely refocused in recent years on the fight against cancer, to the detriment in particular of the diabetes market. Certainly, unlike smaller pharmaceutical groups, an isolated failure does not threaten the future of Sanofi, but it nevertheless risks making the group less attractive to investors. According to analysts at Cowen Bank, amcenestrant sales should have represented 350 million euros in 2027, compared with the approximately 38 billion euros in revenue earned by the group last year.
For some observers, it is primarily the group’s communication that is in question: the poor results of the treatment had been known since March 2022, but Sanofi did not immediately resolve to abandon it. “Investors will, rightly, doubt the speech of the leaders”, remarks Wimal Kapadia, analyst for the firm Bernstein, quoted by the Bloomberg agency.
Sanofi too dependent on its flagship drug, Dupixent?
But, more generally, the failure of this anticancer comes to fuel a major concern of analysts on Sanofi: is the group too dependent 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 up sharply. But Dupixent now accounts for a fifth of the group’s revenue, and investors are concerned about its difficulties in developing 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 a question, this time, of a definitive renunciation. Serious problems have been detected in some patients, and Sanofi must establish whether there is a direct link, before possibly resuming trials.
Still, this interruption will, at the very least, constitute a considerable setback. And his announcement is all the less well received as it comes in the midst of renewed concerns on another front, judicial this time.
In the United States, the first trials around Zantac are coming
Investors are worried about the financial consequences of a dispute over a treatment, Zantac, long sold in the United States and Canada against heartburn but withdrawn from the market in 2019. Studies have, in established that this treatment degraded in the body into a carcinogenic component, even if it was not proven that it actually caused cancer. However, the first trials will open this month of August in the United States, patients accusing Sanofi and other groups of having contributed to their cancer by selling Zantac.
Is this for Sanofi the beginning of a case similar to Dépakine? The group has been facing justice for a long time because of this anti-epileptic responsible for multiple disorders in children exposed in their mother’s womb.
It is a little early to tell, however, underline some analysts, who consider it difficult to establish a link with such a punctual treatment as a painkiller, and for whom Sanofi reacted fairly quickly from the first worrying studies. “The possible impact seems to us today difficult to quantify”, estimate the analysts of the cabinet Oddo, who consider “excessive” the reaction of the markets.
The encouraging results of the candidate vaccine against Covid-19
Good news could, however, arrive for the pharmaceutical giant thanks to the vaccine against Covid-19. Sanofi is indeed developing a recombinant protein vaccine, which uses the Spike protein (the spicule) of the virus as an antigen to help the body recognize it. Sanofi, which has still not marketed a vaccine against Covid-19, has recorded encouraging results for this new generation vaccine candidate used as a booster dose against Covid-19 during two clinical trials on this serum which it is developing jointly with the British GSK, he announced on June 13.
In a press release published on June 24, the French group stated that a booster dose of its vaccine proved to be 72% effective (confidence interval between 45.8 and 86.6%) against symptomatic forms with the Omicron variant. In people who have already had Covid-19 and therefore also benefit from “natural” immunity, this protection rose to 93.2% (confidence interval between 73.2% and 99.2%). However, this study did not focus on the BA.5 sub-lineage of the Omicron variant, which is ultra-majority in France, but the effectiveness of current vaccines seems similar against each Omicron sub-variant.
While this vaccine has been under continuous review since July 2021, Sanofi submitted a marketing authorization application to the European Medicines Agency in March 2022.