Sanofi Stock Update: Mergers, Licensure Agreements To Boost Company Revenue in 2016

Sanofi Stock Update: Mergers, Licensure Agreements To Boost Company Revenue in 2016
January 10 01:53 2016 Print This Article

Given a strong drug pipeline and company financials, analysts expect Sanofi stock to do well in 2016.

Sanofi ADR (NYSE:SNY) shares closed down 1.68% on December 31, 2015. The stock’s beta value is 1.00. The company has a total market capitalization of $112.90 billion, with 1.31 billion outstanding shares. In terms of sales, the drugmaker was in a strong position with net sales of €33.770 million in 2014. Currently, the stock trades in the 52-week range of $42.63-43.00.

Dengvaxia Launch
In December, Sanofi acquired three approvals for its dengue virus medication, Dengvaxia, in Mexico, Brazil, and the Philippines. The vaccine has showed its efficacy and safety profile in the four serotypes of dengue — meant to reduce mortality and morbidity rates in affected countries. Around 40,000 affected participants were enrolled to prove the safety and clinical efficacy of the drug.

The drug is expected to achieve WHO goals i.e. to reduce mortality by 50% and morbidity by 25% by 2020. According to consensus, Dengvaxia is expected to generate €510 million between 2015 to 2019.

Negotiations on Business Swap Deals
Sanofi and Boehringer Ingelheim started negotiations on the exchange of Sanofi’s animal health business, Merial, in December. The total enterprise cost is €11.4 billion.

Boehringer Ingelheim Consumer Health Care (CHC) business has an enterprise value of €6.7 billion, excluding the CHC business in China. It will have to pay a sum of €4.7 billion in cash to Sanofi if the deal is finalized.

The deal would make Sanofi number one in CHC space, inclusive of pro formal sales of €5.1 billion in 2015, along with a global market share close to 4.6%.

Sanofi and Regeneron Pharmaceuticals, Inc. completed enrollment for global Phase 3 ODYSSEY OUTCOMES trial in November, which is meant to be an evaluation of the potential cardiovascular benefits of Praluent® (alirocumab) injection among acute coronary syndrome (ACS) patients. The trial is expected to be completed in 2017.

Exchange of Chemical Compounds
Sanofi and AstraZeneca announced in November that they are in the process of exchanging 210,000 compounds from their respective proprietary compound libraries.

SarilumabPhase 3 Trial Positive Results
Sanofi and Regeneron have announced the results of Phase 3 trial for sarilumab. The study proved its efficiency and safety profile, and met the primary endpoint in improving the signs and symptoms of rheumatoid arthritis (RA), along with improvements in the physical condition of patients.

Sales for the period of 2015-2019 are expected to clock in at €397 million. Other competitors in the market are: Enbrel by Amgen, which clinched sales of $4,688 million; Remicade, marketed by Merck, which has a market share of $2,372 million; and Bristol-Myers Squibb’s Orencia, which had a share of $1,652 million in 2014.

Sanofi’s License Agreement
The drugmaker was successful in securing license agreements with multiple companies in November 2015. Sanofi has announced plans to acquire license for the development of experimental long-acting diabetes treatment with Hanmi Pharmaceuticals Co. Ltd. Under the agreement, Hanmi will be eligible for an upfront payment of €400 million, and will also acquire €3.5 billion under the segments of development, registration, and sales.

Sanofi and BioNTech A.G. agreed on a multi-year collaboration and license agreement, which involved the usage of scientific expertise to research and develop five cancer immunotherapies that use synthetic messenger RNAs (mRNAs). Sanofi will pay an upfront amount of $60 million in addition to near-term milestone payments to BioNTech. On achieving the developmental, regulatory, and commercialization milestones, BioNTech could adhere to over $300 million per product.

Patent Settlement for Lantus and SoloSTARwith Eli Lilly
The patent settlement between Sanofi and Eli Lilly (NYSE:LLY) resolved in late September this year; both companies have agreed to pull out from the lawsuit worldwide.

Product Pipeline
Sanofli’s drug pipeline is very hefty and robust. A total of $4.82 million were invested in research and development (R&D) activities. In the transition period from 2014 to 2020, 18 new medications and vaccines will be inducted in the market.

The drug pipeline comprises asthma, diabetes, idiopathic pulmonary fibrosis, sarcopenia, multiple myeloma, and rheumatoid arthritis drugs.

Analysts’ View
AnalystRatings.Net reports that 17 brokerage firms have given Sanofi stock a Hold rating. Previously, the stock got an upgrade at Morgan Stanley from an Equal Weight to Overweight rating on October 15, 2015.

Article courtesy of  Business Finance News, Written by Raheel Farooq