(News Bulletin 247) – The French pharmaceutical group fell sharply on the stock market on Tuesday, while the German bank went from “holding” to “selling” on the value.

After a good start to the year, with particularly good news for its blockbuster Dupixent, Sanofi is struggling on the stock market. And it is not Deutsche Bank which will help the group. The German establishment on Tuesday lowered its opinion on the value for sale, while leaving its target price unchanged, which is therefore maintained at 90 euros. On the Paris Stock Exchange, the action fell by 2.2%, accusing the second largest decline in the CAC 40, around 1:45 p.m.

Deutsche Bank said it lowered its advice following the company’s first quarter results, which it said came out “mixed”. At constant exchange rates, the company’s sales increased by 5.5% to 10.22 billion euros while net income from activities increased by 11.9% to 2.7 billion euros. Results which then proved to be superior to expectations.

Nevertheless, and as Stifel then pointed out, exceptional elements then explained the group’s outperformance compared to the consensus, with in particular 167 million euros in revenue linked to the sale of booster vaccines against Covid-19. By restating the impact of these exceptional items, the results were in line with expectations or even slightly below, indicated Stifel.

A not-so-cautious medium-term profitability target

For Deutsche Bank, these results confirm that Sanofi has little chance of exceeding its promises in 2023.

Despite the fairly vigorous growth of the first quarter, Sanofi confirmed last week that it is aiming for growth in its net earnings per share (EPS) this year “in the low single-digit range”, (i.e. between 1% and 4% but closer to 1%), a relatively cautious target.

In addition, Deutsche Bank believes that it is becoming increasingly clear that the group’s medium-term business operating margin target – more than 32% in 2025 – is not that low.

The establishment also points to the group’s dependence on the growth of Dupixent, even if it nevertheless welcomes its recent success in clinical trials. At the end of March, Dupixent had reached its primary endpoint in a phase III study (the last stage of clinical trials before possible marketing) evaluating its use to treat chronic obstructive pulmonary disease, a respiratory disease nicknamed “smoker’s bronchitis”.

Last week, Credit Suisse wanted to be more optimistic on Sanofi, reiterating its opinion of “outperformance”. “Even if the growth of Dupixent remains crucial, we see a diversification with the launches of Altuviiio and Beyfortus”, underlined the Swiss bank.

Altuviiio is a bleeding drug for people with hemophilia A. It was recently approved by the US Food and Drug Administration in late February and is in the process of being launched. Beyfortus is also due to launch in the coming months. This drug was approved late last year by the European Commission to treat respiratory syncytial virus (RSV) in infants and newborns.