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Sanofi Still Looks Promising Despite The COVID-19 Vaccine Delay

Mar. 02, 2021 8:05 AM ETSanofi (SNY)BNTX, GSK, PFE14 Comments
Guney Kaya profile picture
Guney Kaya


  • Sanofi's experimental COVID-19 was delayed in December, but they plan to apply for the regulatory submission in the H2 of 2021.
  • Sanofi can hugely benefit from vaccine revenues in 2022 and the Specialty Care growth as the economic recovery takes over.
  • On the other hand, Sanofi stands out as a quality Value Play with low valuation multiples in a time of extreme market valuations.

My original thesis was based on the idea that Sanofi (NASDAQ:NASDAQ:SNY) could soar as they announce the efficacy of their recombinant protein approach experimental COVID-19 vaccine. Sadly, initial findings were not satisfying, and the stock took a hit after the poor outcome of 1/2 vaccine trials. Although this was a clear setback in the vaccine development process, they quickly reinitiated vaccine production efforts with what they have learned from their failure. They are projecting the regulatory submission of the vaccine in the H2 of 2021. My initial thesis still stands as demand for the COVID-19 vaccines is still robust while supply is scarce. Therefore, it offers a better opportunity than ever to take a piece of this vaccine developer candidate at a bargain valuation.

There Is No Such A Thing As A Late COVID-19 Vaccine

Pfizer (NYSE:PFE), Moderna (NASDAQ:MRNA), and AstraZeneca (NASDAQ:AZN) were the first movers of the COVID-19 vaccine race. Sanofi was late from the start, but the unexpected negative results on December 11'th pushed the vaccine development process even further. Still, Sanofi got back on track with the vaccine development in collaboration with GlaxoSmithKline (NYSE:GSK), and they are planning to apply for regulatory submission by H2 2021, which means they will come up with the results of Phase 2 in a couple of months. Additionally, Sanofi is working towards its own mRNA approach-based vaccine, yet it is not likely to be ready until 2022 based on the latest disclosures.

Some people may think that Sanofi is too late for the COVID-19 vaccine development. I have previously explained why this is not the case when it comes to COVID-19 vaccines, and the last three months proved my view. World Health Organization repeatedly stated COVID-19 would be here for a long time even after normalization. Many other officials and vaccine-producing companies

This article was written by

Guney Kaya profile picture
I am working in Venture Capital. Currently in Turkey.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in SNY over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am not offering financial advice but only my personal opinion. Investors may take further aspects and their own due diligence into consideration before making a decision.

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Comments (14)

pat45 profile picture
I would not buy SNY for Covid vaccine...it did not work well, is different, and lots of competition.
Guney Kaya profile picture
Thanks @pat45 There are definitely more significant reasons to buy SNY; low valuation multiples, growing Free Cash Flow, Dupixent... Still, the Covid vaccine is a plus.

Although Covid vaccine margins are tight and there are many unknowns, these kinds of news can serve as a robust catalyst to the stock price, even though the real positive impact of it is not as significant.
Results today confirm your optimistic outlook for SNY, so good on you. With a nice dividend of 3.7% there is value still in SNY. Long and happy to finally see it gain traction.
Guney Kaya profile picture
@RealRural Thanks!
$SNY is a foreign company. How are dividends treated in US accounts, both taxable and tax advantaged?
Guney Kaya profile picture
@karibruce I am not a US citizen sorry.
Thank for the evaluation. Sanofi has been one of the laggards in my portfolio, with better times always around the corner. Maybe this time?
Guney Kaya profile picture
@RealRural Hopefully, I am looking forward to it.
For a Big Pharma with other products, like Pfizer, a vaccine does not contribute much.
Irrespective of PFE, Sanofi had a good future.
Dupixent will surpass $10 Billion in the next 3 to 5 years.
The pipeline is strong. Stronger in the 3 to 5 year window.
Patent related issues are totally behind them.
Dividend is excellent.
The drop in price is a good opportunity to pick up the stock.
Guney Kaya profile picture
@Jimghad I am confident in Dupixent and the future of the company, it is definetly a cheap value play.
02 Mar. 2021
this delay on vaccine could be the trigger for a fast revaluation: 1 they can avoid commercial and product mistakes 2 get better agreement 3 pfizer doesn’t seem to be so bullish from announce. But the true is that we don’t need covid vaccine to say this is a extremely cheap company now
Guney Kaya profile picture
@Fabio1 I agree !
Gio Danisi profile picture
I agree Sanofi is the best pharma stock from a value perspective now, but not for Covid vaccine hopes. I don't know if someone already disclosed margins by the vaccines but that will be slim for political reasons. Btw, doesn't it sound strange that 2 of the biggest vaccine manufacturers of the World joined together and yet didn't manage to develop a good candidate, while three start-ups like Biontech, Moderna and Oxford did it?
Guney Kaya profile picture
@Gio Danisi I find that very odd as well. GSK and Sanofi are vaccine giants, yet they are so behind in the race. Some vaccine producers didn't even share their revenue expectations from the vaccines, but margins should be tiny. My biggest reason to be bullish is increasing margins by focusing on more lucrative business lines. Still, Covid vaccines can generate significant revenues (if the vaccine works) as Sanofi has large production capacities.
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