After the announcement of the end of the clinical development of amcenestrant, an anti-breast cancer molecule, the action of Sanofi fell by almost 5% on the Paris Stock Exchange.
Painful August for Sanofi. The pharmaceutical giant, whose image had already suffered from its difficulties in developing an anti-Covid vaccine, is now worrying the markets in the face of an accumulation of bad news. “Sanofi ends global clinical development program for amcenestrant“, announced this Wednesday the group, lowering its share of 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 July. Admittedly, Sanofi’s image had already faded with the general public because of its delays and difficulties in developing an anti-Covid vaccine. However, this subject has never really preoccupied 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. Unlike smaller pharmaceutical groups, an isolated failure does not threaten Sanofi’s future, but it does risk 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, but Sanofi did not immediately resolve to abandon it. “Investors will, rightly, doubt the speech of the leaders“, notes Wimal Kapadia, analyst for the firm Bernstein, quoted by the agency Bloomberg.
Concerns about litigation
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.
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 indeed established that this treatment degrades in the body into a carcinogenic component, even if it has not been proven that it has actually caused cancer. However, the first trials will open this month in the United States, with 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 difficult to quantify today“, estimate the analysts of the cabinet Oddo, who judge “excessive» the reaction of the markets.
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