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    AZN   GB0009895292

ASTRAZENECA PLC

(AZN)
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Delayed Quote. Delayed London Stock Exchange - 09/24 11:35:14 am
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Analysis-Sanofi's COVID-19 vaccine setback, drug pipeline cast long shadow

08/05/2021 | 06:43am EDT
FILE PHOTO: Paul Hudson, CEO of Sanofi, delivers a speech at the French drugmaker's vaccine unit Sanofi Pasteur plant near Lyon

PARIS (Reuters) - Pharmaceutical company Sanofi remains under pressure to launch new drugs and overcome setbacks in the COVID-19 vaccine race, despite a $3.2 billion deal to tighten its grip on promising mRNA technology.

On Tuesday, Sanofi agreed to buy U.S. partner Translate Bio as it bets on next-generation vaccines and particularly as the French drugmaker, one of the world's top flu vaccine makers, seeks to see off competition in one of its major markets.

The two companies have been partnering since 2018 and are developing a COVID-19 mRNA shot together that has entered clinical trials, as well as an influenza jab.

The messenger RNA (ribonucleic acid) approach, an area of Translate Bio expertise, instructs human cells to make specific proteins that produce an immune response to a given disease.

The technology has proven to be successful in COVID-19 vaccines developed by Pfizer/BioNTech and Moderna.

"Although the platform of Translate Bio is not yet proven, it is a smart move by Sanofi," Wimal Kapadia, an analyst with Bernstein said. "Bringing the asset in-house will allow them to move quicker."

The transaction, backed by the U.S. company's largest shareholder, is expected to close in the third quarter. It follows Sanofi's acquisition of another, smaller, mRNA player, Tidal Therapeutics, in April.

But analysts cautioned it won't be enough to ease pressure on chief executive Paul Hudson to revive the company's drug pipeline with a blockbuster product and boost the share price.

Sanofi's shares barely moved on the news on Tuesday and fell to near three-month lows on Wednesday.

"The key for this stock to work is convincing the market that you know how to develop drugs. And bringing in another company or another technology does not really reflect that, and there is a lot of frustration with the stock," Kapadia said.

The stock has risen just 1% since the start of the pandemic in March last year while rivals in the COVID-19 vaccine race, Pfizer, Johnson & Johnson and AstraZeneca have seen double-digit percentage growth of 43%, 29% and 22% respectively. (Graphic: Sanofi shares have lagged rivals during pandemic, https://fingfx.thomsonreuters.com/gfx/mkt/zjvqkqgqbvx/sanofi.PNG)

REVAMP

In 2018, the company hired a former Roche executive, John Reed, to revamp its research and development operations.

Sanofi said last month it expects several pipeline milestones in the second half, including pivotal trial readouts for Amcenestrant, a breast cancer treatment, and Sarclisa for multiple myeloma.

That was followed by Hudson's appointment almost two years ago to reduce the group's focus to fewer but faster-growing segments such as cancer and reduce dependence on Dupixent, its star eczema and asthma treatment that has been leading its growth.

"The CEO is clearly going in the right direction and the Translate Bio deal highlights that," a Sanofi investor speaking on the condition of anonymity told Reuters.

"But Hudson's tenure was rapidly overshadowed by the coronavirus pandemic and snags with the (COVID-19) vaccine," the investor said, referring to delays developing another COVID-19 shot with Britain's GlaxoSmithKline.

"Now, we will want to see Sanofi be bolder when it comes to deals if we look at the group's profile in the longer term."

That means looking beyond 2025, analysts said.

Martial Descoutures, an analyst with Oddo BFH, said Sanofi's growth profile was well established until then, with Dupixent expected to make ever greater contributions to profits and exceeding 10 billion euros ($11.89 billion) in peak sales.

"(But) we do need more visibility in the longer term. Right now, the pipeline is the main issue."

($1 = 0.8410 euros)

(Reporting by Matthias Blamont; Editing by Josephine Mason and Elaine Hardcastle)

By Matthias Blamont


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ASTRAZENECA PLC 2.04% 8845 Delayed Quote.18.35%
GLAXOSMITHKLINE PLC -1.84% 1388 Delayed Quote.5.37%
MODERNA, INC. -5.38% 430.14 Delayed Quote.335.15%
ROCHE HOLDING AG -0.64% 340.4 Delayed Quote.10.87%
SANOFI -1.01% 82.02 Real-time Quote.5.29%
TRANSLATE BIO, INC. -0.13% 37.36 End-of-day quote.0.00%
All news about ASTRAZENECA PLC
01:15pHealth Care Stocks Retreat Friday
MT
12:19pEurostoxx 50 : European stocks slip on Evergrande woes, weak German business morale
RE
11:21aEuropean ADRs Move Lower in Friday Trading
MT
10:06aASTRAZENECA : Receives a Buy rating from Barclays
MD
09:21aWall Street Tumbles Pre-Bell, Evergrande Risks Resurface
MT
09:15aHealth Care Stocks Slip Pre-Bell Friday
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08:59aIMPERIAL COLLEGE LONDON : Imperial RNA technology to be developed by VaxEquity with AstraZ..
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08:26aDEPARTMENT OF HEALTH AND SOCIAL CARE : check the rules for travel to England from abroad
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07:35aASTRAZENECA : Lynparza in combination with abiraterone significantly delayed disease progr..
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06:46aASTRAZENECA : LYNPARZA« (olaparib) in combination with abiraterone significantly delayed d..
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Analyst Recommendations on ASTRAZENECA PLC
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Financials (USD)
Sales 2021 35 401 M - -
Net income 2021 5 006 M - -
Net Debt 2021 24 250 M - -
P/E ratio 2021 33,3x
Yield 2021 2,37%
Capitalization 188 B 187 B -
EV / Sales 2021 6,00x
EV / Sales 2022 4,86x
Nbr of Employees 76 100
Free-Float 96,3%
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Mean consensus BUY
Number of Analysts 27
Last Close Price 118,94 $
Average target price 136,24 $
Spread / Average Target 14,5%
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Managers and Directors
Pascal Soriot Chief Executive Officer & Executive Director
Aradhana Sarin Chief Financial Officer & Executive Director
Leif Valdemar Johansson Non-Executive Chairman
Menelas NICOLAS Pangalos EVP-Biopharmaceuticals Research & Development
Pam P. Cheng Executive VP-Operations & Information Technology
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