Sanofi (ENXTPA:SAN) Faces MS Setback While Reinforcing Alzheimer’s And Autoimmune Pipeline

• Sanofi halted development of tolebrutinib in primary progressive multiple sclerosis after the drug missed its Phase 3 primary endpoint.
• The company signed a licensing deal worth up to $1.04 billion with ADEL for an investigational Alzheimer’s antibody.
• Sanofi expanded its collaboration with Dren Bio to advance next generation B cell targeted therapies for autoimmune diseases.
• Regulatory progress includes approvals for new rare disease medicines in China and EMA orphan designation for an alpha 1 antitrypsin deficiency therapy.

Sanofi (ENXTPA:SAN), trading around €82.1, is navigating a mixed period marked by both clinical setbacks and pipeline reinforcements. The tolebrutinib failure in primary progressive multiple sclerosis removes a key late stage asset, adding pressure on a business already contending with a negative year to date share price move of about 13 percent.

At the same time, high value licensing in Alzheimer’s disease, deeper investment in autoimmune therapies, and incremental rare disease approvals underline a strategy of broadening and de risking the pipeline. The progress of these newer assets through development and regulation will be central to reshaping Sanofi’s profile in the coming years.

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How Sanofi stacks up against its biggest competitors

The tolebrutinib setback removes a potential growth pillar in multiple sclerosis, a therapy area Sanofi had strengthened through its Principia acquisition. It will likely force leadership to reassess capital allocation across late stage neurology programs. At the same time, the Alzheimer’s and autoimmune deals, along with China rare disease approvals, indicate that management is leaning harder into partnered innovation and specialty indications. This may help diversify away from single asset risk and reduce reliance on Dupixent over the next decade.

Sanofi Narrative, Rerated but Still Execution Dependent

The latest moves largely reinforce the existing narrative that future returns depend on disciplined execution of the late stage pipeline rather than outsized revenue growth from any one drug. With analysts already incorporating roughly 4 percent annual revenue growth and higher margins, the tolebrutinib failure slightly weakens the neurology leg of the story. However, the high value Alzheimer’s and autoimmune optionality help preserve the case that Sanofi could still grow earnings toward the €9.6 billion level targeted for 2028 if newer assets perform in line with current plans.

Balancing Risks And Rewards In Sanofi’s Pipeline Pivot

• ⚠️ Concentration risk persists if newer neurology and autoimmune projects do not offset setbacks in MS and any future pressure on Dupixent.
• ⚠️ Higher business development spend and milestone obligations could weigh on near term cash flows if partnered assets underdeliver or face regulatory delays.
• 🎁 The stock is currently viewed by some analysts as undervalued relative to their assessed fair value, with published forecasts for earnings growth of about 12 percent per year. This could create upside if pipeline execution stabilizes.
• 🎁 Expansion in China and rare diseases, supported by orphan and specialty approvals, broadens Sanofi’s profit mix toward higher margin franchises. This may support the margin uplift embedded in consensus models.

What To Watch Next For Sanofi Leadership

Investors may wish to monitor how management updates its pipeline priorities at the late stage review call. Areas of focus include any impairment related to tolebrutinib, clarity on regulatory timelines for remaining MS indications, and concrete milestones for the ADEL and Dren Bio partnerships. For a deeper view on how this could shape the longer term story, readers can explore community perspectives at https://simplywall.st/community/narratives.

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