Sanofi's New Head of R&D: The Immunology Giant's Shift

Last October, Sanofi CEO Paul Hudson announced a strategic shift, including increased R&D spending and a lowered long-term profit forecast. Following this, the company's market value dropped by $21 billion, marking the largest single-day loss for a major biopharmaceutical company.

Now, Sanofi’s market value has recovered, and its immunology-focused product line is moving forward, with around 12 potential blockbuster drugs in development. At that time, Houman Ashrafian, who had just transitioned from the healthcare venture capital firm SV Health Investors, was still adapting to his new role as Sanofi's head of R&D. Undoubtedly, Ashrafian will be crucial to Sanofi's future R&D efforts.

Earlier this month, Endpoints News interviewed Ashrafian, reflecting on his first year in the role and discussing the future of this $140 billion company. The following is a summary of those insights.

A "Pure" Biopharma Company

Regarding stock price fluctuations, Ashrafian emphasized that the company is focused on the long term. "I have a 3-year, 5-year, 10-year, and 15-year plan, but I’m working to ensure Sanofi becomes and remains the best pure biopharma company in the world. The stock price is just a byproduct."

Last week, Sanofi announced that it has entered negotiations with U.S. private equity firm Clayton Dubilier & Rice (CD&R) to explore the sale of a 50% controlling stake in its consumer healthcare business, Opella.

Sanofi’s plan to spin off its consumer healthcare division is a key step in the company’s "Play to Win" strategy, which aims to focus resources on innovative drugs and vaccines, boosting R&D productivity and market competitiveness.

Opella, Sanofi's consumer healthcare unit, holds 100 well-known brands, including Allegra, Doliprane, Novanight, Icy Hot, and Dulcolax, making it the world’s third-largest OTC (over-the-counter) and vitamin, mineral, and supplement company.

According to financial reports, Opella accounted for approximately 13.3% of Sanofi’s total business in the first half of this year. In Q2, Opella’s revenue grew by nearly 10%, thanks to the acquisition of Qunol.

The Post-Dupixent Era?

As the world’s first IL-4Rα-targeted monoclonal antibody to be approved, Dupixent has shown outstanding market performance. According to financial reports, Dupixent’s sales reached $6.66 billion in the first half of 2024, a 125% increase compared to the first half of 2023. Meanwhile, Dupixent’s sales surpassed AbbVie’s Humira ($5.084 billion) and Johnson & Johnson’s Stelara ($5.336 billion), taking the crown as the top-selling autoimmune drug.

Ashrafian mentioned that Dupixent is still at its peak, with eight years remaining until its expected loss of exclusivity in 2032. Sanofi has several strategies to mitigate the impact of this exclusivity loss, and it wouldn't be surprising if this date were extended.

Supporting this claim, in July this year, Dupixent was approved by the EU for the treatment of chronic obstructive pulmonary disease (COPD). In September, the FDA also approved Dupixent for COPD treatment, and on the same day, Dupixent was approved in China for the same indication. This new indication is expected to drive a second wave of growth for Dupixent’s overall sales.

Regarding Sanofi’s post-Dupixent growth, Ashrafian believes that the company is almost fully covered across late, mid, and early-stage pipelines, as well as external innovations, ensuring continuous growth beyond Dupixent.

Future Opportunities

Immunology is undoubtedly a major future opportunity, with Dupixent laying the foundation for everything. For Sanofi, the development of immunology drugs is a natural progression. Ashrafian revealed that there are some early-stage studies happening internally, but it’s still too early to tell if they will succeed.

In the weight-loss race, where many pharmaceutical companies are competing for a share, Sanofi has shown some interest. At this year’s JP Morgan conference, Ashrafian mentioned that Sanofi is working on a "version 2.0" of weight-loss drugs. He noted that issues like muscle loss, potential effects on bone density, rebound problems after stopping the drug, and manufacturing challenges all contribute to these complexities.

Earlier this month, Novo Nordisk’s Ozempic and Wegovy, as well as Eli Lilly’s Mounjaro and Zepbound, were removed from the FDA’s shortage list. When asked whether a duopoly between Novo Nordisk and Eli Lilly would emerge, Ashrafian stated that it remains to be seen, as the scope of diseases and complications is too broad, allowing new companies to enter this field.

Unlike other pharmaceutical companies using GLP-1 for weight loss, Sanofi’s GLP-1 diabetes drug Soliqua has performed well globally. So far, Soliqua has been approved in over 80 countries. While Soliqua is not effective for weight control, Paul Hickey, CEO of Reshape Life Sciences, said that if Sanofi enters the obesity market, its well-established global distribution system could bring huge advantages.

Sanofi has not abandoned its oncology efforts either.

Last month, Sanofi signed a licensing agreement with radiopharmaceutical companies RadioMedix and Orano Med for €100 million upfront. This deal focuses on the AlphaMedix project, which consists of a peptide compound targeting SSTR labeled with lead-212 (212Pb), acting as an in vivo generator of alpha particles. The AlphaMedix project, co-developed by RadioMedix and Orano Med, is nearing the completion of its Phase II clinical trials.

Ashrafian also affirmed the role of AI in supporting the company's growth, stating that by 2040, the workforce will be significantly different. Sanofi will shift to a "techbio" model, becoming a tech company with deep therapeutic capabilities, and employees will move fluidly within the organization.