Many European pharmaceutical industry executives have something in common with Olympic athletes. As this summer’s Paris Olympics will show, being an “underdog” can be brutal. Sponsors love winners, even if other competitors have compelling stories. In the pharmaceutical sector, the approach of investors is no different.
The market’s obsession with weight-loss treatments has reached such a level that pharmaceutical groups focused on other therapeutic areas (or that have entered the obesity game late) are fighting for attention. There is a valuation gap of almost 60% between Danish weight-loss drug group Novo Nordisk and the other major European pharmaceutical companies, based on profit estimates for 2025.
“We’re living through something of a[obesity drug]fad at the moment,” said Stuart Harris, Cavendish’s research director. The “losers” have not always served their own interests. Companies such as Sanofi and Roche need to impress with the progress of their drug pipelines if they want to attract even a little attention.
Second-quarter results showed encouraging signs. Last week, Sanofi said it no longer expected earnings per share to decline this year, following strong sales of its blockbuster asthma and eczema drug Dupixent. More importantly, however, results were also promising for newer launches, such as Altuviiio, a drug used to control bleeding in patients with haemophilia A.
Chief Executive Paul Hudson has braced the market for lower profits as he boosts research and development to address concerns that the group is too reliant on Dupixent. Investors are encouraged: Sanofi expects 12 late-stage data readouts in 2024-25. The stock has gained 6 per cent so far this year, but more positive trial results will be needed to drive further improvement.
Roche also raised its annual profit forecast after new drugs such as eye treatment Vabysmo helped lift group sales in the first half by 5%, excluding currency effects. But Roche has suffered high-profile late-stage failures in recent years, most notably in Alzheimer’s treatments. Boss Thomas Schinecker will unveil its products in September. An easier win might be to focus on cost cutting: Citi expects “significant” cost efficiencies to be announced.
Schinecker, however, is betting on obesity drugs after acquiring early-stage assets through a $3.1 billion deal for California-based Carmot Therapeutics. The Swiss group’s market value rose by more than $16.5 billion in one day in July when it published encouraging results from a trial of its obesity pill, even though it was only in the early stages. Still, Roche has gained just 5.5 percent over the past 12 months.
The losers still have to work harder to deserve a place on the podium.
nathalie.thomas@ft.com
JOBs Apply News
For the Latest JOBs Apply News, Follow ©JOBs Apply News on Twitter Page.