Sanofi’s Setback in Inflammation Drug Trials and Implications for Its Innovation Pipeline

Sanofi’s recent setbacks in its inflammation drug pipeline, particularly the mixed results from the HS-OBTAIN phase 2a trial for brivekimig, underscore the inherent risks and strategic recalibrations in the biopharma sector. Brivekimig, a dual-target nanobody inhibiting tumor necrosis factor (TNF) and OX40 ligand (OX40L), was evaluated for hidradenitis suppurativa (HS) but faced challenges in demonstrating sufficient monotherapy efficacy despite achieving HiSCR50 (a 50% reduction in inflammatory lesions) in some patient cohorts [1]. While the safety profile remained consistent with expectations, the drug’s limited standalone potential has prompted Sanofi to explore combination therapies, reflecting a broader industry trend of pivoting toward multi-modal treatment strategies [2].

Risk Rebalancing: From Efficacy Gaps to Strategic Reallocation

The HS-OBTAIN trial’s shortcomings highlight the delicate balance between innovation and commercial viability. Sanofi’s decision to pivot brivekimig toward combination regimens mirrors its approach with other assets, such as balinatunfib, an oral TNF inhibitor that missed its phase 2 psoriasis trial primary endpoint [3]. These setbacks have accelerated Sanofi’s reallocation of capital from high-risk monotherapies to diversified pipelines. For instance, the company has redirected resources toward its Dupixent franchise, which achieved €3.8 billion in Q2 2025 sales, and its recent acquisitions, including Blueprint Medicines and Vigil Neuroscience, to strengthen its foothold in oncology and neurology [4].

The biopharma sector’s response to such risks has been a shift toward late-stage, de-risked assets. According to a report by Excedr, venture capital funding for phase 2 and beyond biotech deals increased by 36% in 2025 compared to 2023, as investors prioritize projects with clearer clinical readouts [5]. Sanofi’s own R&D spending rose 17.7% to €1.9 billion in H1 2025, reflecting this trend [6]. However, the company’s stock price declined 10.2% in the three months preceding September 2025, partly due to broader sector-wide concerns over regulatory scrutiny and macroeconomic pressures [7].

Capital Reallocation and Sector-Wide Shifts

Sanofi’s strategic divestment of its consumer health division, Opella, for $17.4 billion in 2025, exemplifies the sector’s pivot toward high-margin biopharma innovation. The proceeds have funded partnerships like the $89 million investment in Agomab Therapeutics and collaborations with Orano Med on radioligand therapies [8]. These moves align with industry-wide capital reallocation trends, where companies like GSK and Johnson & Johnson are similarly prioritizing specialty therapeutics over over-the-counter products [9].

Investor sentiment, however, remains mixed. While Deutsche Bank and JPMorgan upgraded Sanofi to “Buy” in Q2 2025, citing its robust Dupixent growth and R&D momentum, others expressed caution over its elevated R&D costs and tax burdens [10]. The biotech IPO market’s stagnation—only seven deals in H1 2025—further underscores the sector’s risk-averse posture, with firms opting for private funding or partnerships to de-risk early-stage programs [11].

Competitive Dynamics and Future Outlook

Sanofi’s challenges in inflammation are not unique. Competitors like Merck and Roche face similar hurdles in autoimmune and inflammatory disease pipelines, yet Sanofi’s focus on nanobody technology and dual-target mechanisms positions it to differentiate in the long term. The company’s recent phase 2b trial for amlitelimab in atopic dermatitis and its expansion into rare diseases with rilzabrutinib highlight its commitment to high-impact innovation [12].

For investors, the key takeaway lies in Sanofi’s ability to balance short-term setbacks with long-term strategic clarity. While the HS-OBTAIN trial’s mixed results may delay brivekimig’s path to approval, the company’s capital reallocation toward de-risked assets and partnerships suggests a resilient pipeline. As the biopharma sector navigates a post-pandemic landscape marked by regulatory scrutiny and economic volatility, Sanofi’s focus on innovation—despite its risks—may yet position it as a leader in immunology and beyond.

Source:
[1] Media Update: EADV: Sanofi builds on legacy in immunology [https://www.sanofi.com/en/media-room/press-releases/2025/2025-09-03-05-00-00-3143274]
[2] Brivekimig - Drug Targets, Indications, Patents [https://synapse.patsnap.com/drug/16d092b853c24015bae5c9f19ffd5e52]
[3] Sanofi's oral TNF inhibitor misses mark in phase 2 psoriasis trial [https://www.fiercebiotech.com/biotech/sanofis-oral-tnf-inhibitor-misses-mark-phase-2-psoriasis-trial-prompting-focus-combos]
[4] The Sanofi pipeline in 2025 [https://www.labiotech.eu/in-depth/sanofi-pipeline-2025/]
[5] 2025 Trends in Biotech Venture Capital Funding [https://www.excedr.com/blog/trends-in-biotech-venture-capital-funding]
[6] Sanofi's 2025 Half-Year Surge: A Resilient R&D-Driven ... [https://www.ainvest.com/news/sanofi-2025-year-surge-resilient-driven-biopharma-powerhouse-2508/]
[7] Sanofi Down 10% in 3 Months: How Should You Play the Stock [https://www.nasdaq.com/articles/sanofi-down-10-3-months-how-should-you-play-stock]
[8] From consumer health to pure biopharma: Inside Sanofi's investment strategy [https://www.labiotech.eu/in-depth/sanofi-investment-strategy/]
[9] Biopharma Trends 2025 [https://www.bcg.com/publications/2025/biopharma-trends]
[10] Sanofi (SNY) Analyst Ratings, Estimates & Forecasts [https://finance.yahoo.com/quote/SNY/analysis/]
[11] Q2 2025: Life Sciences Capital Markets Recap [https://biotechbriefings.gibsondunn.com/q2-2025-life-sciences-capital-markets-recap/]
[12] Press Release: EADV: Sanofi builds on legacy in immunology [https://www.sanofi.com/en/media-room/press-releases/2025/2025-09-03-05-00-00-3143274]