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Sanofi (SNY - Analyst Report) recently entered into a collaboration Transgene for the production of immunotherapy products and creating of an industrial platform for the same. The platform will include Transgene’s candidates.

Sanofi and Transgene, a French biopharmaceutical company, will invest €10 million in the platform, which will be located at the Genzyme Polyclonals site at Lyon, Gerland. The platform will be solely owned by Sanofi. We note that Genzyme Polyclonals site is already engaged in manufacturing polyclonal antibodies for the global markets. The platform possesses the capability to facilitate the registration of immunotherapy candidates in the US and EU.

Construction, qualification and validation of the manufacturing facility are expected to commence in the third quarter of 2013. Sanofi expects the first batch of commercial grade drugs to be available in 2015.

Under the terms of the agreement, Sanofi and its subsidiary, Genzyme will function as Contract Manufacturing Organization (CMO) for Transgene. Sanofi will manufacture Transgene’s immunotherapy drugs, including modified vaccinia ankara vaccine, for clinical studies as well as commercial purposes. For 15 years, Transgene will be recognized as a preferred customer of the manufacturing facility.

The signing of the deal comes close on the heals of the positive recommendation issued by the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) for Aubagio (teriflunomide). The company is looking to get Aubagio approved for the treatment of relapsing forms of multiple sclerosis (RMS) in adult patients.

We are pleased with Sanofi’s efforts to develop its pipeline, which should fetch significant revenue contributions upon approval. We believe that the pipeline at Sanofi must deliver, since many of its drugs are facing generic competition.

Sanofi carries a Zacks Rank #3 (Hold) in the short run. However, large cap pharma stocks such as Novo Nordisk (NVO - Analyst Report), Eli Lilly and Company (LLY - Analyst Report) and Abbott Laboratories (ABT - Analyst Report) currently look more attractive. All three stocks carry a Zacks Rank #2 (Buy).

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