Sanofi still must convince markets it is able to deliver on a sustainable growth and exciting path as to battle with new difficulties in its vaccines sector and looks ready for another poor year with its diabetes sector, say investors.
The French pharmaceutical company holds a Wednesday innovation day to talk about its lineup of new drugs in the pipeline, while attempting to overcome the fallout from a new row involving safety in the Philippines over its vaccine for dengue.
Already bothered by no large acquisition since 2015 when Olivier Brandicourt became the CEO, some investors are beginning to lose their patience.
Sanofi shares are trading near 10 month lows and are down over 4% in 2017, after a decline in 2016 of 2.2%.
During the last five years, the company has struggled and lagged in the sector, increasing only 3% against a gain of nearly 49% for the healthcare index STOXX Europe 600.
Nothing has taken place related to business development and very little new news is in the pipeline, and what took place recently with the dengue vaccine is also shocking and very negative, said an asset manager in Europe.
The Philippines health ministry suspended a program of national immunization last week after recent findings by Sanofi showed that its vaccine Dengvaxia could, in certain cases, increase risk of developing severe dengue in those recipients who have not been infected previously by the deadly virus.
Government health officials launched their investigation and stopped all sales of the vaccine.
Once touted to be a blockbuster product with $1 billion in sales per year, Dengvaxia’s initial sales in 2016 were just 55 million euros equal to $65 million and industrial analysts have dialed back their expectations.
The blow from Dengvaxia follows a pair of other setbacks at Sanofi Pasteur, the vaccines unit of the group.
The division stopped developing an experimental vaccine to be used against clostridium difficile infection this month, and also pulled out of a vaccine program for Zika with the military from the U.S. this past summer.
In November, Sanofi said that sales for its diabetes unit were likely to shrink by between 6% and 8% per year from 2015 to 2018 after results from the third quarter came in below expectations.
Sanofi previously forecast between a 4% and 8% fall citing persistent pressures on prices in the U.S., the largest healthcare market in the world, where Lantus, its blockbuster insulin drug lost its patent protection.