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Sanofi’s SNY stock has declined 10.2% in the past three months. However, a lot of this price decline was due to the downtrend of the overall drug and biotech sector, which performed poorly in the past three months after Trump announced the appointment of Robert F. Kennedy Jr., a vaccine skeptic, as the head of Health and Human Services, the agency that oversees the FDA.
This, coupled with disappointing third-quarter sales and profits, guidance cuts and pipeline setbacks, took a toll on the overall drug and biotech industry’s performance.
The decline in Sanofi’s stock price and the drug/biotech sector’s downturn have left investors confused about how to play the stock. Let’s understand the company’s strengths and weaknesses to better analyze how to play Sanofi’s stock amid the recent price decrease.
Dupixent: A Key Top-Line Driver for SNY
Sanofi’s immunology drug, Dupixent has become the key top-line driver as it enjoys strong demand across all approved indications and geographies. Dupixent is now approved in several countries, including the United States and EU, for six type II inflammatory diseases, namely severe chronic rhinosinusitis with nasal polyposis, severe asthma, moderate-to-severe atopic dermatitis, eosinophilic esophagitis, prurigo nodularis and chronic obstructive pulmonary disease (COPD).
Dupixent is now annualizing at close to €11.0 billion in sales after almost eight years on the market. It leads the new-to-brand prescription market share across all its approved indications in the United States. Outside the United States, the drug is now approaching blockbuster status in a single quarter. Sanofi expects Dupixent to achieve more than €13 billion in sales in 2024 and a low double-digit CAGR till 2030.
SNY Boasts a Strong Vaccine Segment
Sanofi possesses one of the world’s leading vaccine operations, with total annual sales of more than €5 billion in the past five years. Its Vaccines unit has delivered mid-to-high-single-digit sales growth since 2018, and the segment is expected to grow at a high single-digit range in 2024. Sanofi continues to expand its vaccine business further. Sanofi has at least five vaccine candidates, which are expected to enter phase III development by 2025. Sanofi expects annual net sales to be more than €10 billion from its Vaccines unit by 2030, backed by its innovation efforts.
SNY’s New Products & Strong Pipeline Can Drive Long-Term Growth
Sanofi’s new products like novel recombinant factor VIII therapy, Altuviiio, respiratory syncytial virus (RSV) antibody, Beyfortus (in partnership with AstraZeneca [AZN]), Pompe disease therapy, Nexviazyme and chronic graft-versus-host disease drug, Rezurock are contributing to top-line growth. Revenues from these products are offsetting the impact of generic competition on Aubagio's sales.