Dupixent's Rare Disease Play: A New Era for Sanofi and Regeneron

The FDA's June 20, 2025 approval of Dupixent (dupilumab) for bullous pemphigoid (BP) marks a pivotal moment for Sanofi (SAN.PA) and Regeneron (REGN) in their quest to dominate therapies targeting type 2 inflammation. As the first and only targeted therapy approved for BP in the U.S., Dupixent is poised to capitalize on a $20 billion opportunity in rare inflammatory diseases, leveraging its unique mechanism, robust clinical data, and strategic partnerships to drive long-term growth.

The BP Approval: A Catalyst for Market Expansion

BP, a rare autoimmune skin disorder affecting ~27,000 U.S. adults and up to 500,000 patients globally, is characterized by severe blistering, chronic itching, and reliance on systemic corticosteroids—a regimen fraught with complications like infections, cardiovascular risks, and mortality. The pivotal ADEPT trial demonstrated Dupixent's transformative potential:
- 18.3% of patients achieved sustained remission (vs. 6.1% on placebo), defined as corticosteroid-free remission for 20 weeks.
- 38.3% saw ≥4-point reductions in peak pruritus scores (vs. 10.5% placebo).
- Cumulative corticosteroid use dropped by 32% in the Dupixent group, addressing a critical unmet need.

This approval not only fills a therapeutic void but also positions Dupixent as a non-immunosuppressive alternative—a game-changer for elderly patients, who constitute over 90% of BP cases.

The Type 2 Inflammation Advantage

Dupixent's mechanism—inhibiting IL-4 and IL-13 signaling—targets the core of type 2 inflammation, a pathway central to BP and other diseases like atopic dermatitis and asthma. Unlike broad immunosuppressants, this precision approach minimizes systemic risks, making it ideal for chronic conditions. The drug's efficacy in BP aligns with its success across eight approved indications, including:
- Atopic dermatitis: $8.5B in 2024 sales (JMP Securities).
- Asthma and nasal polyps: Key contributors to its $14B+ annual revenue run-rate.

Addressable Markets and Pipeline Diversification

While BP's U.S. patient pool is ~27,000, global incidence rates range from 0.25 to 4.28 per 100,000, with rising trends driven by aging populations and DPP-4 inhibitor-linked cases (36% of BP cases in a Greek cohort). Sanofi and Regeneron are already targeting 30–50% market penetration in BP, but the real upside lies in its pipeline:
- Chronic pruritus: A condition affecting millions with no FDA-approved therapies.
- Lichen simplex chronicus: A severe skin disorder with overlapping type 2 inflammation pathways.
- Eosinophilic esophagitis: A gastrointestinal indication where Dupixent is in late-stage trials.

The partnership's global regulatory momentum is equally compelling. Submissions for BP are under review in the EU, Japan, and China, with approval timelines expected by early 2026. Meanwhile, access programs like DUPIXENT MyWay®—which includes home injection training and financial support—will accelerate adoption.

Investment Case: High Margins, Sustainable Growth

Dupixent's 90%+ gross margins (vs. ~70% for traditional biologics) and low manufacturing costs position it as a cash flow powerhouse. With a patent expiry extending to 2035 in key markets and a pipeline that could add $10B in annual sales by 2030, Sanofi and Regeneron are securing a decade of growth.

Risks and Considerations

• Competitor threats: Roche's omalizumab (Xolair) and up-and-comers like anifrolumab (AstraZeneca) could encroach on niche markets.
• Global regulatory hurdles: BP's lower incidence in Asia may slow uptake in markets with cost-sensitive healthcare systems.

Conclusion: A Rare Opportunity

Dupixent's BP approval is more than a regulatory win—it's a blueprint for future growth in rare diseases. With its precision mechanism, expanding pipeline, and a first-mover advantage in underserved markets, Sanofi and Regeneron are building a fortress in type 2 inflammation. For investors, this is a high-conviction buy, with upside driven by underpenetrated markets and a moat against generic and biosimilar competition.

Investment Grade: Buy.
Target Price Range: Sanofi €75–€85, Regeneron $550–$600.
Key Catalysts: EU BP approval (Q1 2026), chronic pruritus trial readouts (2026), and U.S. Medicare coverage expansions.

Data sources: FDA approvals, ADEPT trial results, WHO epidemiology reports, company disclosures.