Sanofi (SNY) Relies on Dupixent and Vaccines to Drive Growth

French drugmaker Sanofi’s SNY immunology medicine, Dupixent, has become the key top-line driver. Dupixent is being jointly marketed by Regeneron REGN and Sanofi under a global collaboration agreement. Sanofi records global net product sales of Dupixent, while Regeneron records its share of profits/losses in connection with the global sales of the drug.

Dupixent is now annualizing at close to €6.0 billion in sales after around five years on the market. Sanofi expects Dupixent to achieve more than €13 billion in peak sales. Dupixent now is approved in the United States and the EU for three type II inflammatory diseases, namely severe chronic rhinosinusitis with nasal polyposis, severe asthma and moderate-to-severe atopic dermatitis. It was approved for the fourth disease indication, eosinophilic esophagitis, in the United States in May 2022. The frequent label expansion approvals are driving the drug’s sales higher. With outside U.S. revenues accelerating and multiple approvals for new indications and expansion in younger patient populations expected in the near future, sales are expected to be higher

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 vaccine unit has become the primary top-line driver. Sanofi expects sales in its Vaccine unit to grow at a mid-to-high single-digit CAGR from 2018 to 2025. Sanofi is also developing an adjuvanted recombinant protein-based COVID-19 vaccine candidatein partnership with GSK GSK. The vaccine is being developed by combining Sanofi’s recombinant protein-based technology with Glaxo’s pandemic adjuvant technology.

Glaxo and Sanofi began a pivotal phase III study on the candidate in May. Meanwhile, a booster study is also planned to complement the phase III study.

Sanofi’s R&D pipeline is strong. Several data readouts are expected in 2022.Sanofi has also launched several new drugs in the past couple of years. Some recent key drug approvals are Nexviazyme (avalglucosidase alfa) for the treatment of late-onset Pompe disease, a rare degenerative muscle disorder and Enjaymo (sutimlimab-jome) for hemolysis in adult patients with cold agglutinin disease, a rare blood disorder, in 2022.

Sanofi is also expanding its pipeline through M&A deals. The Principia acquisition in 2020 added BTK inhibitors like tolebrutinib and rilzabrutinib to its pipeline, which can address a variety of serious illnesses. The acquisition of Translate Bio in September 2021 accelerated Sanofi’s efforts to develop transformative vaccines and therapies using mRNA technology. The Kadmon acquisition added Rezurock, Kadmon’s FDA-approved treatment for chronic graft-versus-host disease to Sanofi’s portfolio.

Conclusion

Sanofi faces its share of headwinds, including the weak performance of diabetes drugs and generic competition for many drugs. Also, macroeconomic headwinds such as increased cost of energy, transportation, as well as labor costs are hurting margins. The impact of volume-based procurement in China is also expected to hurt gross margins. Nonetheless, the strong performance of Dupixent, above-market sales growthof the Consumer unit, consistent pipeline innovation and regular accretive collaboration deals should keep the stock afloat in the second half and thereafter.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
 
Sanofi (SNY) : Free Stock Analysis Report
 
GSK PLC Sponsored ADR (GSK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research