Sanofi’s shares closed lower in Tuesday trading despite the recent deal for selling its shares in the U.S. biotechnology company Regeneron. Sanofi will earn about $13 billion after selling a huge part of its 20.6% stake in Regeneron. Despite that, the company’s shares dropped 1% on Tuesday, along with other healthcare companies’ stocks.
On Monday, Regeneron stated that it will buy about $5 billion of its stock back from Sanofi. Meanwhile, there is a secondary offering for the rest of the shares held by Sanofi. The partnership between the two companies goes back a long way. Sanofi has been working with Regeneron ever since 2003 and one of their collaborative products is the eczema treatment medicine Dupixent.
Considering Regeneron’s closing share price of $569.91 on May 26, the deal is estimated to bring Sanofi a profit of €12 billion ($13.15 billion). After the sale, Sanofi will still own around 400,000 shares of the Regeneron common stock. This will allow the two companies to continue their successful business relationship.
In the last few months, Sanofi has shifted its efforts toward developing drugs and methods to treat cancer and some rare diseases. Prior to the changes in the company’s structure, Sanofi was working mainly on the development of drugs that will treat diabetes and cardiovascular diseases.
Even though Sanofi decided to sell its shares in Regeneron earlier than some investors predicted, many believe that this will not affect the U.S. biotech company’s stock. Even though there might be a new owner of Regeneron’s shares, analysts predict that the stock’s value per share will not be affected drastically.
Analyst stock price forecast and recommendation
According to CNN Money, the 12-month price forecasts for Sanofi SA offered by 20 analysts show a median target of $56.10, with a high estimate of $61.63 and a low estimate of $46.30. The median estimate represents a +18.71% increase from the last price of $47.26.
The same media also offers the recommendations of 23 investment analysts who participated in a Sanofi SA stock poll. About 13 of the surveyed analysts rated the company’s stock as “Buy”, 7 as “Hold” and 3 – as “Outperform”.