Sanofi was quite a while on my watchlist. It has solid market opportunities for example in oncology (FDA approval of Sarclisa for the treatment of multiple myeloma) or multiple sclerosis (Lemtrada). It has strong financial figures with 42.21 billion in revenues, 5.48% revenue growth and is sitting on a huge amount of cash (10.7billion). However, these numbers can also be found with other pharma companies and the reason why I got in for 77,12€/share was the hope, that it will bring a first relive in the COVID-19 situation by a label extension of an existing drug.
Sanofi in cooperation with Regeneron Pharmaceuticals Inc (WKN: 881535) has initiated a clinical trial program to evaluate Kevzara (sarilumab) as a potential treatment for pulmonary symptoms associated with the coronavirus.
The rationale is that Kevzara is an antibody against Interleukin-6 (IL-6) and IL-6 may play a key role in driving the inflammatory immune response that causes acute respiratory distress syndrome (ARDS) in patients who become critically ill from COVID-19. There is some evidence from a 21-patent, single-arm Chinese trial with Roche's Actemra (tocilizumab) another IL-6 blocking agent. COVID-19 patients treated with Actemra experienced reduced fevers and 75% of patients reduced their need for supplemental oxygen within days. Based on this small study, China updated its COVID-19 treatment guidelines to include the use of Actemra to treat patients with severe or critical disease based on that data. Hopes are that the drug that can suppress a so-called cytokine storm, which happens when the immune system overreacts and attacks the body's organs.
There are two controlled trials starting, one starting in the US (lead by Regeneron) and one outside the US including areas most affected by the pandemic such as Italy (lead by Sanofi).
The development of a drug (including a vaccine), from finding the compound, upscaling it to amounts required for clinical testing and sufficient for selling it to the market, as well as the clinical testing including efficacy and safety (including some data about 3 or 5 months long term safety) is a very lengthy process. Therefore, (also with speed up regulatory processes) it is not very realistic to expect a vaccine for Covid-19 in the short term. However, treating a patient that severely suffer from the COVID-19 infection with a drug that is already on the market, is a much faster approach and might become crucial in the coming months. Therefore the trial above has given the extra opportunity for a stock that looks fair priced (whatever that means in the current situation). We will see how things will play out.
