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SAN:FRA – Market expectations are for fading Uniform ROA, but management is confident about their pricing strategy and growth

September 17, 2018

  • Sanofi (SAN:FRA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 16.2x Uniform P/E. At these levels, the market has bearish expectations for the firm, however, management is confident in their price limiting strategy and growth in emerging markets
  • Specifically, management is confident that Kevzara will continue to capture new-to-brand prescriptions in IL-6 subcu, and in their ability to improve access to Praluent for new patients. Moreover, they are confident that headwinds from the Lantus and Sevelamer LOEs have now peaked, and in their ability to drive growth in the diabetes segment in emerging markets. Additionally, they are confident in their strategy of limiting price increases, and in their positioning as an early adopter of this strategy in the market. Finally, they are confident in the efficacy of Dupixent, and that there is still significant unmet need for the product

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