Sanofi

DCF target price cut by 10.6% from €114 to €102: Despite investing more money in R&D activities, Sanofi has encountered notable setbacks on this front over the last two years. Amongst the recent ones, in September 2025, amlitelimab, in which the firm had high hopes, did not prove itself (in a late-stage trial), to be significantly superior to the existing lynchpin drug, Dupixent (c.35% of total sales) – raising growth concerns for the period after Dupixent loses exclusivity in the early 2030s. Earlier this month, Tolebrutinib failed to show its effectiveness in a subset of the multiple sclerosis (neuroscience disorder) population. These developments have prompted us to revise our out-year growth estimate to 1.5% (vs. 2% previously). Possibly, to compensate for the under-delivery on the internal R&D front, the firm has been active in the M&A space. This makes us wonder if it is too difficult for Sanofi to reduce its over-reliance on external innovation. This is one of the reasons behind Sanofi’s operating profitability and stakeholder returns being lower than most of the AV Big Pharmas.

We have also reduced our NAV target to €106 vs €116 to take these R&D setbacks into account, especially for the Immunology area. 

Since the share price has gone nowhere over the last four years, we wait to see if Sanofi’s board can swallow a bitter pill and take bold measures, similar to what Novo Nordisk’s largest shareholder did earlier this year. Investors now seem to have a much-reduced appetite for R&D failures.

That said, Sanofi still offers a healthy upside in our opinion, backed by 10% bottom-line CAGR expected over 2026-27, a fast-growing Dupixent for at least the next 5-6 years, a healthy balance sheet (2025e net debt-to-EBITDA of 1.8x), and a dominance in vaccines.