Sanofi lowered to Neutral at UBS on lack of catalysts, lower growth

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• UBS downgraded the French drugmaker Sanofi (NASDAQ:SNY) (OTCPK:SNYNF) (GCVRZ) to Neutral from Buy on Tuesday, citing a potential slowdown and lack of catalysts for the remainder of the year.
• Noting that key development programs such as amcenestrant for breast cancer and tolebrutinib for multiple sclerosis have encountered obstacles recently, the analysts led by Laura Sutcliffe laments that Sanofi (SNY) lacks “meaningful” catalysts for the rest of the year.
• “After a FY22 guidance raise to c.15% EPS growth at 2Q we think the equity story will take a pause,” the team added.
• In addition to flat sales growth, the analysts project a low to mid-single digit core EPS growth for Sanofi (SNY) in 2023 due to the patent expiry of MS drug Aubagio and rising R&D expenses. The analysts also expect a legal overhang over heartburn therapy Zantac in early 2023 to impact company shares.
• Read: Seeking Alpha contributor Cavenagh Research argues that Sanofi (SNY) is undervalued based on its financials as well as the performance of its EU peers.