Deutsche Bank upgrades Sanofi to “buy,” lifts PT to €110 on Amlitelimab outlook

Sanofi (EPA:SASY) received an upgrade to 'buy' from 'hold' by Deutsche Bank, with its price target lifted to €110 from €90. The upgrade is primarily driven by anticipated positive late-stage trial results for amlitelimab, an experimental treatment for atopic dermatitis. This new drug is considered crucial for Sanofi's valuation outlook, as the company currently faces investor concerns regarding its significant reliance on Dupixent, which accounts for a large portion of revenue and faces patent expiry in 2031.

Analysis

Deutsche Bank has upgraded Sanofi (SASY) from 'hold' to 'buy', increasing its price target to €110 from €90, which represents a significant premium over its last closing price of €84.69. The upgrade is fundamentally driven by the upcoming late-stage trial results for amlitelimab, an experimental drug for atopic dermatitis. This catalyst is viewed as critical for Sanofi's valuation, which has been suppressed by investor concerns over its heavy reliance on the blockbuster drug Dupixent. The company's dependence is substantial, with Dupixent facing a patent cliff in 2031 and projected to account for approximately 50% of pharmaceutical revenues at that time. This concentration risk has resulted in Sanofi trading at a discounted multiple of around 11 times earnings. The potential success of amlitelimab is particularly noteworthy because atopic dermatitis represents over 70% of Dupixent's revenue, positioning the new drug as a direct successor and a key solution to mitigate the impact of the patent expiration. The analyst's note suggests that positive data could materially improve sentiment and offers an attractive risk/reward profile given the current depressed valuation.

Key Decisions for Investors

• Investors should view the Deutsche Bank upgrade as a signal that the risk/reward profile for Sanofi has become favorable ahead of the pivotal amlitelimab trial results, which could act as a major near-term catalyst.
• The primary factor to monitor is the outcome of the amlitelimab Phase 3 trials; a positive result would significantly de-risk Sanofi's future revenue stream and challenge the prevailing bearish narrative centered on the 2031 Dupixent patent cliff.
• Given the stock's current valuation at a depressed multiple of 11x earnings, a successful pipeline development with amlitelimab presents a clear path to a potential re-rating, justifying a re-evaluation of current holdings or initiating new positions.