Sanofi's stock suffered its worst single-day decline in recent memory, falling more than 10% and erasing nearly $13 billion in market capitalization after Phase III trial results for its experimental inflammatory disease drug amlitelimab failed to meet investor expectations. The French pharmaceutical giant became the biggest decliner on Europe's blue-chip STOXX 600 index as concerns mounted over the company's ability to replace its blockbuster drug Dupixent ahead of patent expiration.
Phase III Results Meet Technical Endpoints But Disappoint Investors
The company reported that amlitelimab successfully met all main goals in its Phase III study for atopic dermatitis, a severe form of eczema. The drug demonstrated statistically significant improvements in skin clearance and disease severity compared with placebo after 24 weeks of treatment. However, the efficacy data appeared weak when compared against Dupixent, Sanofi's best-selling medicine that treats the same condition.
JPMorgan analysts confirmed that while amlitelimab met all primary and secondary endpoints, its efficacy metrics fell below anticipated levels and showed inferior performance compared to Dupixent. The investment bank had warned ahead of market opening that "given the weaker than anticipated efficacy, we expect the shares to underperform by at least 5% today."
Pipeline Concerns Drive Market Reaction
The market's severe reaction reflects deeper concerns about Sanofi's post-Dupixent strategy. Barclays analyst Emily Field explained that investors had viewed amlitelimab as Sanofi's lead pipeline asset to follow Dupixent ahead of the data release. "That's why we're seeing a big reaction in the stock, because of the concern that Sanofi is not going to have enough in its pipeline to replace Dupixent after patent expiry," Field told Reuters. "This is increasingly looked at as a cliff stock."
Dupixent, jointly developed and co-owned with Regeneron, generated approximately 13 billion euros ($15.22 billion) in sales for Sanofi in 2024. The drug is approved not only for eczema but also for other immune-related conditions, including severe asthma, making it a critical revenue driver with patent protection extending until 2031.
Mixed Analyst Reception Despite Safety Profile
Despite the efficacy concerns, some analysts identified potential advantages for amlitelimab. Jefferies noted that while the Phase III results fell short of earlier trials and rival biologic drugs, the drug's safety profile and convenient 12-week dosing schedule could still support clinical use.
UBS analysts characterized the drug's efficacy as "solid despite it being weaker than Dupixent," suggesting that the advantage of less frequent dosing could appeal to injection-averse patients. This dosing convenience represents a potential differentiating factor in a competitive atopic dermatitis market.
Strategic Implications for Sanofi's Immunology Focus
With Dupixent's patent expiry approaching, Sanofi has doubled down on immunology research, positioning amlitelimab as a cornerstone of that strategic effort. The company had billed the experimental drug as a potential successor to Dupixent, making Thursday's results particularly consequential for the company's long-term growth prospects.
The disappointing trial data raises questions about Sanofi's pipeline depth in immunology and its ability to maintain market leadership in inflammatory diseases beyond Dupixent's patent cliff. Shares closed down 10.3% at 0950 GMT, reflecting investor skepticism about the company's transition strategy.
