Sanofi - Zantac Settlement Deep-Dive (BUY, TP EUR132 [135], 14 pgs)
To assess the risk for Sanofi (and GSK) we analyse various elements of the potential settlements that the industry may make on Zantac and show a timeline of events and ownership. There are considerable barriers that have been implemented for plaintiffs, including tumour type (we estimate only 12% of cancer diagnoses are included), proof of Zantac use for 12 months, statute of limitations and severity of injury, amongst others. We show the scientific evidence is unclear as to whether Zantac causes cancer even if NDMA has been shown to do so in animal studies. We show that the Vioxx settlement ($5bn) is a good proxy & estimate a worst-case settlement would be ~$9bn across 4 co’s based on what plaintiff attorneys think payouts could be. Indemnifications also further limit exposure for some companies, with Sanofi seeking indemnity from BI. We conservatively include $3bn of settlement cost in our Sanofi SOTP (~€2.50/share). We see no reason to cut our forecasts for the business & deem a CIA highly unlikely for the Pharma biz leaving Dupixent untouched.For access to the full note, please contact Naresh Chouhan ( )
GlaxoSmithKline is a global healthcare company. Co.'s segments include: Pharmaceuticals; Vaccines; and Consumer Healthcare. The Pharmaceuticals segment is focused on developing new medicines in respiratory, HIV, oncology and immuno-inflammation, with discovery research exploring these and other areas. The Vaccines segment has a portfolio and pipeline of vaccines to help protect people throughout life. Co. delivers vaccines to people living in over 160 countries. The Consumer Healthcare segment develops and markets consumer-preferred brands in oral health, pain relief, respiratory, nutrition/gastro-intestinal and skin health.
Sanofi is an integrated, global healthcare company focused on patient needs and engaged in the research, development, manufacture and marketing of healthcare products. Two segments make up Co.'s business: Pharmaceuticals and Vaccines. The Pharmaceuticals segment covers research, development, production and marketing of medicines, consisting of flagship products, plus a broad range of prescription medicines, generic medicines, and consumer health products. The Vaccines segment includes research, development, production and marketing of vaccines in five areas: pediatric vaccines, influenza vaccines, adult and adolescent booster vaccines, meningitis vaccines, and travel and endemic vaccines.
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