Sanofi was weighed down by fresh delays on its drug tolebrutinib and a notice from UBS
If the market is very cautious on Tuesday, on the eve of the crucial inflation figure in the United States for the month of July, this is even more true for one of the ratings heavyweights, Sanofi, which lost more than 2% against the US dollar in the first few minutes of trading , the biggest drop in the Cac 40.
Two explanations for this. First, the company acted on the advice of the independent data monitoring board (independent data monitoring committee or iDMC). These are three studies conducted by the pharmaceutical company for three indications: Hercules in non-recurrent secondary progressive multiple sclerosis, Perseus in primary progressive multiple sclerosis and Ursa in myasthenia gravis, an autoimmune disease that disrupts the communication between nerves and muscles.
This decision by Sanofi is not based on any new safety findings since the implementation of the FDA’s partial clinical suspension at the end of June, the group specifies in its press release. As recommended by iDMC, all participants currently receiving tolebrutinib in the studies will continue treatment according to study protocols.
It’s time for a “break”
The second explanation, which has traditionally had a significant impact on the stock market, is that UBS is no longer a buyer of Sanofi. Despite the underperformance of the action over the past month (-4% in the stock market, versus an 8% rise in the Cac 40 index), the Swiss investment bank downgrades its opinion from “Buy” to “Neutral” , with a score of 118 price target revised to 103 euros. In L’equity history Society’s hour is “break,” estimates Laura Sutcliffe, in charge of the files. In fact, she sees few catalysts by the end of the year, at a time when tolebrutinib and amcenestrant, which itself has suffered a Phase II failure in the treatment of advanced or metastatic breast cancer.
Two underperformances that will weigh on 2023 earnings growth, UBS says, while Aubagio’s patent expires next year and the lab faces lawsuits in the Supreme Court of Colombia (Canada) over claims the gastrointestinal drug Zantac can take multiple forms of cancer or other diseases. That Food and Drug Administration (FDA, US Food and Drug Administration) applied in early April 2020 to withdraw the drug from the market on the grounds that one of its ingredients, ranitidine hydrochloride, leads to the presence of the carcinogen NDMA in the body after ingestion. The drugmaker’s revenue growth should therefore slow in 2023 for a more token 1% to 5% increase in earnings per share.