French pharma giant Sanofi (SNYNF) says its COVID-19 vaccine will cost under €10, and has also announced its intention to take its active pharmaceutical ingredients (API) division public in the coming months.
According to a MarketWatch report, president of Sanofi France, Olivier Bogillot, told France Inter radio that the company’s coronavirus vaccine candidate, which it is developing with the UK’s GlaxoSmithKline (GSK) was likely to be priced at under €10 per shot. However, he added that a final price was yet to be fixed.
Bogillot also revealed to France Inter radio that Sanofi wants to press ahead with the initial public offering of its API unit, which the company first announced in February. According to Reuters’ sources the standalone company could have a value of between €1 billion to €2 billion.
“The idea is to create a champion of active ingredients at the European level,” Bogillot commented, adding that the IPO would reduce the industry’s “heavy reliance” on drug ingredients sourced from Asia. The new company would rank as the world’s second largest API company with approximately €1 billion in expected sales by 2022.
It would combine Sanofi’s API commercial and development activities with six of its European API production sites : Brindisi (Italy), Frankfurt Chemistry (Germany), Haverhill (UK), St Aubin les Elbeuf (France), Újpest (Hungary) and Vertolaye (France).
Sanofi’s Philippe Luscan says: “This new entity would help ensure a greater stability in supplying drugs to millions of patients in Europe and beyond… [it] would be agile as a standalone company, and able to unlock its growth potential, especially in capturing new third-party sales and all the opportunities of a market growing at a pace of 6 % per year.”
Shares in Sanofi are trading flat year-to-date but the stock scores a bullish Strong Buy Street consensus, with 12 recent buy ratings and just 2 hold ratings. Meanwhile the average analyst price target indicates 25% upside potential lies ahead.
SVB Leerink analyst Geoffrey Porges has a hold rating on Sanofi, but bumped up his price target after the company announced a savvy $3.7B deal for Principia Biopharma.
“This deployment of capital by SNY makes us more constructive about the company’s stock,” said Porges, adding that Principia’s multiple sclerosis drug (which it was co-developing with Sanofi) “adds another real and substantial long term value driver to SNY’s growing [research] portfolio.” (See SNYNF stock analysis on TipRanks)
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