Sanofi grows on Dupixent as its new CEO prunes the pipeline

Sanofi is a fast-growing commercial business with a pipeline that its new leadership has just cut back. Second-quarter sales rose 17.8% at constant rates to EUR 11.6 billion, and the company raised 2026 guidance to about 10% sales growth. The same quarter brought a EUR 952 million impairment and the end of three development programs.

The technology

Sanofi is built around immunology. Dupixent, an antibody whose profits Sanofi shares with Regeneron, sold EUR 5.2 billion in the second quarter, about 44% of group sales. Behind it are launch products in rare blood disorders, oncology and rare disease, including ALTUVIIIO, Ayvakit, Sarclisa and Wayrilz, plus a vaccines business that sold EUR 1.1 billion in the quarter.

The pipeline now centers on a smaller set of bets. Duvakitug, a TL1A antibody partnered with Teva, is in four phase 3 trials in ulcerative colitis and Crohn's disease. Venglustat is under FDA priority review in type 3 Gaucher disease. Tolebrutinib won EU approval as Cenrifki in non-relapsing secondary progressive MS, with liver monitoring required. Frexalimab has phase 3 data in relapsing MS listed for 2027.

The odds

Sanofi's recent record in late-stage immunology is weak. It dropped amlitelimab in atopic dermatitis despite positive extension data, ended itepekimab in COPD, stopped balinatunfib in inflammatory bowel disease and halted the riliprubart MOBILIZE trial for futility, according to the second-quarter report.

The base rates favor what is already filed. In the BIO/Informa/QLS 2011-2020 data, rare disease applications were approved 93.6% of the time, which is the relevant rate for venglustat's November decision. Duvakitug faces the general phase III odds: 57.8% of phase III programs reached a filing in that analysis. Its phase 2b maintenance data were descriptive and from responders only.

The money

Sanofi is profitable. First-half free cash flow was EUR 3.7 billion. Net debt rose to EUR 15.5 billion at June 30 from EUR 11.0 billion at the start of the year, after the Dynavax acquisition, a EUR 1.0 billion buyback and EUR 4.9 billion in dividends, and was net of EUR 6.35 billion of cash. Sanofi also holds a 48.2% interest in the company that owns consumer health business Opella, and it will take a 26.4% stake in Cheplapharm in exchange for 20 mature drugs.

The risks

Dupixent concentration is the largest risk. The company's 2030 plan assumes about EUR 25 billion of Dupixent sales, so competition or pricing changes would hit the whole plan.

The pipeline is thinner. The cuts in 2026 removed several programs that had been presented as future growth, and the company now says it will look for external growth, which brings deal risk. Vaccines and China are soft: vaccine sales fell 4.7% and China sales 4.9% in the second quarter.

Our read

Sanofi under Belén Garijo is trading pipeline breadth for focus. The commercial engine is strong enough to fund that: Dupixent is still growing above 30%, and launches grew 48.3% in the quarter. The open question is what fills the gap after Dupixent, given that several in-house candidates have been dropped.

The near-term calendar is light on big readouts. Third-quarter results on October 30 and the venglustat FDA date of November 25 come first. Any deals will matter as much as trial data, since the company has said it will pursue external growth, and phase 3 results for duvakitug are further out. Investors will also want to see whether the pace of launches can hold as the second half slows.