Sanofi slumps as stagnation and litigation collide

Sanofi’s terrible week started with news of a global recruitment pause on tolebrutinib, the group’s BTK inhibitor that is mired in liver injury concerns. The project is for now Sanofi’s most valuable pipeline asset, according to Evaluate Pharma, although forecasts are under threat. Analysts at UBS this week halved their tolebrutinib peak sales estimate to €1bn, citing the liver toxicity issue, and raised serious concerns about the company’s lack of growth. The note also flagged approaching Zantac litigation court cases – the drug was withdrawn in 2019 on a link with cancer – an issue to which the market seems to have just woken up. Zantac rights were passed around over the years, and the numerous companies involved are already fighting among themselves, seeking indemnification from losses. Morgan Stanley says damages could reach $45bn. Sanofi, Haleon and GSK are bearing the brunt of the concerns, but investors appear to be fearing the worst for all associated. All of which could not have come at a worse time for Sanofi, which looks like ending the week nursing a drastic valuation slump: its shares hit an 18-month low today and are down 16% since Monday.