Sanofi (SNY -0.66%) When AstraZenecaof (AZN -0.70%) An application for a respiratory syncytial virus (RSV) vaccine candidate called nirsevimab was recently accepted for review by the US Food and Drug Administration (FDA) as a protective option for all infants.
Nirsevimab is known under the brand name Beyfortus in the European Union and the United Kingdom, and the FDA expects to make an RSV vaccine approval decision in the third quarter of this year. How much can this product boost Sanofi’s sales?
To answer this question, let’s examine the vaccine Phase 3 clinical trial results and the global RSV vaccine market.
Vaccines against the leading causes of infant hospitalization
RSV is a highly contagious seasonal virus that affects the lungs and respiratory tract. Symptoms of RSV include coughing, sneezing, and wheezing.
In healthy children and most adults, the infection is relatively mild and usually clears up within a week. Groups at particular risk include infants, adults over the age of 65, and adults with comorbidities such as congestive heart failure and chronic obstructive pulmonary disease.
In the United States alone, millions of children under the age of five and older adults are infected with RSV each year. This results in a staggering 58,000 to 80,000 hospitalizations in the former group, while in the latter group he experiences 60,000 to 120,000 hospitalizations.
Fortunately, there are several RSV vaccines currently in development. Pfizer, GSKMore, and Sanofi and AstraZeneca. Sanofi and AstraZeneca have enrolled more than 3,000 infants in a Phase 3 trial, randomized to receive either nircevimab or placebo at the start of the RSV season, at 50 mg doses. Infants in the vaccine group had a 76.8% reduction in the incidence of lower respiratory tract infection (LRTI)-related hospitalizations by 150 days after dosing compared to placebo.
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Great sales potential
It’s no exaggeration to say that nirsevimab keeps thousands of patients out of hospital each year. But what does that mean for Sanofi’s sales?
The unmet medical needs of RSV are enormous.This is an investment banking company Jeffries If Sanofi and AstraZeneca split 50/50, the drug’s peak annual sales are expected to reach $3 billion. Given the marketing and distribution power of Sanofi and AstraZeneca, this seems like an achievable number.
Compared to the average analyst revenue forecast of $48.2 billion in 2023, this would boost pharmaceutical company sales by 3.1%. By itself, it’s a solid growth catalyst. But given that Sanofi has a number of projects in various stages of clinical trials, this doesn’t scratch the surface of the company’s overall potential.
As such, analysts believe Sanofi’s earnings will grow 12.3% annually over the next five years. This is well above the average pharmaceutical industry forecast of 6.9% annual profit growth.
Sanofi stock is an attractive value
Sanofi is a rapidly growing company. But you can’t tell that by looking at the current valuation of the stock. Pharmaceutical stocks trade at a futures price/earnings ratio of 10.9, well below the pharmaceutical industry average of 14.9. Sanofi’s above-average growth prospects combined with below-average valuations make it a compelling acquisition for 2023 and beyond.
Kody Kester has held positions at GSK and Pfizer. The Motley Fool holds positions in and recommends Jefferies Financial Group and Pfizer. The Motley Fool recommends GSK. The Motley Fool’s U.S. headquarters has a disclosure policy.
