From tolebrutinib to the Zantac affair, Sanofi loses 20 billion in market capitalization in three sessions

For analysts from Oddo BHF, it is ” a start of the week to forget as soon as possible “. What could be more obvious, observing Sanofi’s plunge of more than 15% on the stock market in just three sessions, which caused the company to lose some 20 billion in market capitalization. At the origin of this fall, the announcement, Tuesday, by the pharmaceutical company, of the suspension of recruitment on a global scale within the framework of the trials carried out on its drug tolebrutinib in certain multiple sclerosis.

This notably led the UBS research office to review the situation and downgrade its recommendation on the stock from “buy” to “neutral”. Investors in particular seem to recall that Sanofi will soon face lawsuits over allegations that the gastrointestinal drug Zantac could cause several forms of cancer or other ailments.

In court in Illinois in a few weeks

The drug distributed in the United States by Sanofi was voluntarily and immediately removed from the market as a preventive measure in 2019 after questions from the FDA, recalls Oddo BHF in its note of the day. ” Used against heartburn, it contains N-nitrosodimethylamine (“NDMA”), a potential carcinogen in humans. The objective here is to demonstrate for the plaintiff that the pharmaceutical company knew that the drug could lead to risks (including cancer) and that they failed to warn the general public. “, explains the cabinet again.

The Zantac litigation in the United States is brought in federal multi-district court. The case should thus be studied in that of Florida before the end of this year, but also in Illinois in a few weeks or in February 2023. Sanofi is not the only accused. The British GSK, the American Pfizer and the German Boehringer Ingelheim, initially the sole owner of the drug, are also concerned.

2 to 4 billion per company

At the start of the year, 3,100 people had sued Sanofi, but there could be tens of thousands if the first verdict in Illinois proves in favor of the plaintiffs. “, anticipates Oddo BHF, who nevertheless judges that “ this figure is overestimated because the demonstration of long-term use of the drug does not seem so obvious to justify (taking at least Zantac once a week for a year before the onset of cancer). »

To go a little further in the calculations, from the mentioned number of 100,000 potential complainants and assuming a cost of 250,000 dollars per complainant for a rate of 50% of proven cases, according to the scenario established by Oddo BHF, “ we would arrive at an overall amount of 12.5 billion dollars to be shared between the four companies mainly involved, namely 2 to 4 billion per company. »

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