Jefferies analysts wrote Dupixent revenue is likely to peak at $12.5 billion, according to an article in FiercePharma. That's about 8% higher than Sanofi CEO Paul Hudson has set for the medication.
Dupixent is the first biologic medication approved by the Food and Drug Administration for adults and children aged six years and up with moderate to severe atopic dermatitis for whom topical treatments have not worked or are not advised.
Atopic is the most common type of eczema, affecting more than 9.6 million children and about 16.5 million adults in the United States, according to the National Eczema Association. It's a chronic condition that can come and go for years or throughout life and can overlap with other types of eczema. The condition triggers inflammation that damages the skin barrier, leaving it dry and prone to itching and rashes.
As of the second quarter, Dupixent sales have been running at about $1 billion every three months. Jeffries thinks that number could double by 2028 as the patient population for atopic dermatitis expands and the drug makes inroads into treatment for asthma and several additional indications.
Other companies have eczema drugs in testing, but it appears they will present little challenge to Dupixent because of their side effects. One is abrocitinib from Pfizer Inc. (PFE, Financial), the other is Rinvoq from AbbVie Inc.(ABBV, Financial).
In addition to making Dupixent Sanofi's key growth driver, Hudson, a year into his tenure at the company's helm, has launched a program to cut about $2.5 billion in costs by 2022. He's also focusing the company's research and development so it yields drugs that are "first-in-class" or "best-in-class." To supplement in-house research, Sanofi has been busy scouting for outside help. It recently closed a $3.7 billion acquisition of Principia Biopharma. According to the terms of the deal, the Paris-based company gets drugs to treat conditions such as multiple sclerosis, immunological and inflammatory diseases.
Jeffries analysts acknowledge Sanofi is much more than Dupixent, pointing to the company's flu vaccines, robust pipeline and cost-cutting initiatives. In a bit of high praise, Jeffries said that from an investment perspective, Sanofi is the "most compelling" among large European pharma companies.
Sanofi is also engaged in the fight against Covid-19. The company recently began a phase 1/2 clinical trial of the vaccine it is developing in conjunction with GlaxoSmithKline (GSK, Financial). The company said it anticipates results will be available in December, and if the shot passes muster, Sanofi could ask for regulatory approval in the first half of 2021.
Sanofi currently trades just below $50, It's year-to-date range is $37.62 to $55. Its dividend yields nearly 3.4%. According to CNN Money, the 19 analysts offering 12-month price forecasts have a median target of $62.62, with a high estimate of $68.99 and a low estimate of $50.27. They rate Sanofi a buy.
Disclosure: The author holds positions in Sanofi and Pfizer.
Read more here:
- Did Gilead Pay Too Much for Immunomedics?
- Former Gilead Executive Heading One of 3 Biotechs Going Public
- Jeffries Rates IGM Biosciences a Buy in Health Care Sector
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.