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France’s financial prosecutor has opened a preliminary investigation of pharmaceutical group Sanofi over allegations of market manipulation related to the launch of its hit drug Dupixent in 2017.
The prosecutor’s office, which opened the probe in March, is looking into allegations of “dissemination of false or misleading information and price manipulation” concerning financial communications by the group, according to a judicial official. The next step may or may not be a formal investigation, depending on the evidence.
Sanofi said: “We stand by the accuracy of our accounts,” adding that it “reserves the right to take legal action against any false or defamatory allegations”. The probe was first reported by French publication La Lettre A.
Dupixent, which is used to treat asthma and eczema, is Sanofi’s best-selling product. Sales increased 35 per cent in the first nine months of the year to €7.7bn, about a quarter of its total sales for the period. Shortly after he began in the role in September 2019, chief executive Paul Hudson said he wanted to increase sales of the drug and obtain approval for its wider use.
Dupixent sales subsequently quadrupled from €2bn in 2019 to €8.3bn in 2022. However, investors have become worried about the company’s dependence on Dupixent, which it developed with US biotech Regeneron.
Sanofi has marketed new prescription drugs recently — including haemophilia treatment Altuviiio, and Beyfortus for respiratory syncytial virus in young children — as it works to improve its drug pipeline. The company also acquired a type 1 diabetes treatment as part of its $2.9bn takeover of Provention Bio in March.
In October, Sanofi announced plans to spin off its consumer care division and increase investment in research and development as part of efforts to focus on new treatments for cancer and rare diseases. Sanofi said the spin-off could take place by the end of next year, most likely through a listing in Paris.
However, a cut to earnings forecasts because of the increased R&D budget caused shares to fall almost 20 per cent in one day, and they have remained in that range.
Shares fell 2 per cent on Tuesday to trade at about €84, giving Sanofi a market capitalisation of €106bn.
As part of turnaround plans announced when he took over as chief, Hudson said he would shift the company to focus on speciality medicines for cancer and rare diseases, moving it away from the mass-market products that had been its core business. Sanofi has since restructured its consumer division as a standalone business within the company.
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