General presentation of the Sanofi Company:
The Sanofi group is the European leader in the pharmaceutical industry. Its activity affects various sectors of activity related to pharmaceutics such as the production of pharmaceuticals and generic drugs which represents almost 85.1% of the group's turnover along with the production of human vaccines or even veterinary products with almost 14.9% of turnover.
Due to more than 75 production centres around the world, the group supplies both Europe with 27.4% of its revenue along with the United States with nearly 33.5% of its turnover, Japan with 5% of its turnover, Asia with 11.5%, Latin America with 7.6%, Africa and the Middle East with 6.5% and the rest of the world with 8.5%.
Knowing Sanofi shares competition:
The Sanofi group has been one of the leaders in pharmaceutical research and production in the world for several years now. Particularly in the vaccine market and in emerging markets and has recorded a significant increase in its turnover in the diabetes sector. However, despite this relative financial stability, it faces very strong competition from other big names in this sector. A complete and conclusive study of the Sanofi share requires sound knowledge of the company's direct competition as well as a comparative of the results of the different companies concerned. Here's a list of Sanofi's main competitors on the international market:
The strategic alliances set up by the Sanofi group:
For many years, Sanofi has forged strategic partnerships with various companies engaged in activities related or not to its own. Here are the main alliances of the Sanofi group and its main partners.
- Coca-Cola: Sanofi is partners with Coca-Cola and decided to develop a healthy drink in 2012.
- GDF-Suez: In 2013, Sanofi also joined forces with GDF-Suez in a joint project aimed at reducing worldwide energy consumption.
- Google: In 2015, the Sanofi group announced a partnership with Google by pooling their skills and know-how in the fight against diabetes with easier detection of glucose levels.
- Denali Therapeutics: In 2018, the Sanofi group set up a partnership with the Denali Therapeutics company aimed at jointly developing different molecules for the potential treatment of different neurodegenerative and inflammatory systemic diseases. As a result, Sanofi has planned to pay Denali 125 million dollars initially as well as other future payments according to the progress of the stages for a total amount greater than one billion dollars.
- Regeneron: Even more recently, in 2019, Sanofi allied with its competitor Regeneron in the United States again aimed at developing an immuno-oncology treatment, focusing mainly on two flagship products already under clinical development.
Introduction and stock quote of the Sanofi share:
The Sanofi share price owes its developments to innovations and other controversies that affect the world of drug or vaccine production. Therefore, it's easy to quickly obtain information on the up and down trend possibilities.
It is also important to follow the group's financial activity very closely.
In addition to a full technical analysis of this value, it's also necessary to use a maximum of external fundamental indicators such as data from the pharmaceutical market in general with, among other things, a complete analysis of the competition for this activity.
Stock market data
To understand all of the issues affecting Sanofi's share on the stock market, please check out some overall data about this security and its position on the stock market.
- In 2019, the total market capitalization of the Sanofi Company amounted to 92,432.78 million EUR.
- The total number of securities issued by Sanofi and in circulation on the market during the same period is 1,250,105,261.
- The Sanofi share price is currently listed on compartment A of the Euronext Paris market in France.
- The Sanofi group is also included in the composition of the French national index CAC 40.
- Sanofi's shareholding is made up of 82.34% of floating assets, 9.48% of L'Oréal shares, 5.7% of BlackRock shares, 0.16% in auto-control and 1.7% of employee shares.
- In 2004, Sanofi bought the group and became the third group in the international pharmaceutical sector.
- In 2008, Sanofi participated in the marketing of the first generic drugs. The same year, the group changed directors with Christopher Viehbacher.
- In 2009, Sanofi became the world's number 11 in the generic pharmaceutical industry after the acquisition of the Czech company Zentiva.
- In 2010, the group bought the American laboratory Genzyme for 18.5 billion dollars.
- In 2015, AstraZeneca sold Caprelsa, a drug against a rare form of cancer, to Sanofi for 300 million dollars and Sanofi signed a partnership with Regeneron on cancer research for 2 billion dollars. In 2016, Sanofi considered the resale of Mérial versus a division of non-prescription drugs from Behringer and a down payment of $ 4.7 billion. The same year, Sanofi launched the dengue vaccine Dengvaxia in Brazil, whereas it was already authorized in Mexico and the Philippines.
- Also in 2015, the group collaborated with Google Life Science to improve clinical results against diabetes. They created a joint company in 2016 allowing Sanofi to engage in real-time blood sugar control thanks to new devices on which Google had worked.
- Also in 2016, the Sanofi group announced the acquisition of Medivation for $ 9.3 billion, an American company specializing in cancer treatment. The offer was ultimately rejected by Medivation, which accepted Pfizer's offer made in August of the same year for $ 14 billion.
- In 2016, Sanofi's results improved with turnover increase of 9.8% or 33.8 billion euros.
- In 2017, the Merial group was sold to the Boehringer-Ingelheim laboratories and the Sanofi group retrieved its prescription drug activity.
- In 2018, Sanofi bought the Bioverativ company in the United States, a hemophilia specialist for $ 11.6 billion. The same year, the group bid on the buyout of the Ablynx Company, in competition with Novo Nordisk and makes a proposal of 3.9 billion dollars. Novo Nordisk withdrew. Also in 2018, the group announced the sale of generics in Europe to the investment fund Advent International for 1.92 billion euros.
- In 2019, the group announced 230 job cuts in France, mainly pharmaceutical sales representatives, therefore planning for a voluntary departure for the end of the year.
The advantages and strengths of the Sanofi share as a stock market asset :
First of all, the Sanofi group benefits from a very interesting positioning in its sector of activity. Indeed, Sanofi is none other than the fourth largest pharmaceutical group in the world. At the European level, its positioning is even more interesting since it is the leader in its sector. It should also be recalled here that Sanofi is currently the world leader in vaccines.
Another important strength of the Sanofi share is the very likely growth of the pharmaceuticals sector over the coming years. This anticipated growth is based on a number of different factors and structural factors.
The good distribution of the Sanofi Group's various activities is also a real strength. Indeed, the group generates 31% of its revenues from established products, 20.5% from diabetes treatments, 9.5% from consumer health products, 10% from products for the treatment of rare diseases, 5% from generics, 4% from oncology treatments, 13% from vaccines and 7% from veterinary health products. As a result, the company does not present a significant risk in any single health area and can offset some of its losses in other markets.
From a geographical point of view, the Sanofi Group has also succeeded in positioning itself strategically. This is particularly the case with its positioning in emerging markets, which account for 33% of the Group's sales, of which only 12% are in Asia and which are currently growing rapidly. The United States market accounts for 36% of sales and Western Europe accounts for only 22% of sales.
Analysts specializing in this market also stress the importance of the strategy implemented by the Sanofi Group, which has already proved its worth. Indeed, the company is focusing on reducing its dependence on a few key compounds. In this way, it is tending to reduce the impact of patents and the rise of generic drugs, which have been causing problems for many laboratories for several years now.
We can also appreciate the fact that the Sanofi Group is on the way to becoming one of the major names in healthcare for the general public worldwide with its range of non-prescription medicines. To this end, it has decided to sell its veterinary health division to the German company Boerhinger Ingelheim in exchange for the purchase of the Lysopaïne, Dulcolax and Surbronc brands, which are marketed worldwide. This decision is an intelligent way of positioning itself in this future-oriented segment.
Stock market investors and shareholders also appreciate the visibility this company offers on its future growth. The group announces the release of new drugs in advance. To remain one of the leaders in its sector, Sanofi can also count on its many innovations. Indeed, investments in research and development should reach 6 billion euros by 2020.
Finally, the Sanofi Group has the advantage of having very significant cash resources, i.e. more than 8 billion euros, which enables it to regularly launch share buyback programs with very attractive payouts to its shareholders.
The disadvantages and weaknesses of Sanofi shares as a stock market asset :
First of all, and despite the many efforts made by the Group and its diversification strategy, the rise of generic drugs continues to be detrimental to the Group. Indeed, competition in this segment is becoming increasingly intense and aggressive, particularly with regard to certain very popular products. This competition results in a loss of patents for the company and has a significant impact on its profitability.
On the other hand, while the medical and healthcare sector is still booming, it is also a very difficult sector from a certain point of view. Indeed, companies in this sector, such as Sanofi, have to cope with pressure from the public health authorities and therefore have to cut costs drastically, which of course leads to a loss of revenue. Again because of the authorities, these groups are increasingly facing very restrictive regulatory barriers that can slow down their growth and development.
In the US market, the group is currently suffering numerous losses following the launch of the generic drug Lilly, which directly competes with its treatment Lantus. As a result, Lantus is increasingly excluded from the list of treatments reimbursed by insurance companies. In addition, and still in the United States, the group has to bear the negative consequences of the delay in marketing its anti-diabetic injection pen.
The year 2017 has not helped to restore investor confidence either. For three quarters in a row, Sanofi experienced a significant drop in sales outside the veterinary health sector. As a result of these disappointing results, the Group has also lowered some of its targets. This applies in particular to diabetes treatment products, but also to generics.
More generally, and to conclude with the negative points of the Sanofi group, it should be noted that profits showed lower growth than those of its competitors. In 2017, the group announced that the return to profitability expansion would be postponed to 2018.