Sanofi and Regeneron Report Positive COPD Data, Raising Dupixent's Peak Sales Potential

The efficacy of Sanofi and Regeneron's Dupixent appears to have extended to another inflammatory disease, as the phase 3 Boreas trial—focused on former or current smokers with type 2 inflammation and chronic obstructive pulmonary disease—has shown a statistically significant benefit for the drug on top of standard care by multiple measures. We now assume an 80% probability of approval in 2025, with potential sales peaking in 2029 around $2 billion in this indication; this puts our overall Dupixent peak sales estimate north of EUR 18 billion. This contributes to our Sanofi fair value estimate increase to EUR 113/$61 per share from EUR 110/$57. We would have included a low-single-digit increase in our Regeneron fair value estimate with this news, but we've also trimmed Eylea's sales in our model in 2028 and beyond to account for potential Medicare negotiation for the firm's high-dose version of the drug (on track to launch in 2023). We think Dupixent remains an important part of Sanofi’s wide moat and Regeneron’s narrow moat.