The French drugmaker holds an "innovation day" on Wednesday to
discuss its pipeline of new drugs while it attempts to overcome
fallout from a safety row in the Philippines over its dengue
vaccine.
Already irked by the lack of a large acquisition since Olivier
Brandicourt was appointed as chief executive in 2015, some investors
are losing patience that has been stretched for months.
Shares in Sanofi are trading close to a 10-month low and are down
more than 4 percent this year after a 2.2 percent decline last year.
Over the past five years they have lagged the sector, rising about 3
percent against a 49 percent gain for the STOXX Europe 600
Healthcare index<.SXDP>.
"Nothing is happening in terms of business development and there is
very little news in the pipeline. What just happened with dengue is
negative and shocking," said Rudi Van Den Eynde, of asset management
firm Candriam.

DENGVAXIA BLOW
The Philippines suspended a national immunization program last week
after Sanofi's recent findings that its Dengvaxia vaccine could, in
some cases, increase the risk of severe dengue in recipients not
previously infected by the virus.
Manila launched an investigation and halted the sale of the
medication.
Once touted out as a potential $1 billion-a-year blockbuster
product, Dengvaxia's initial sales last year were only 55 million
euros ($65 million) and industry analysts have been dialing back
expectations.
The Dengvaxia blow follows two other snags at Sanofi Pasteur, the
group's vaccines unit.
The division ended the development of an experimental vaccine for
clostridium difficile infection this month and pulled out of a Zika
vaccine program with the U.S. military this summer.
PRESSURE AHEAD
Last month Sanofi said that currency-adjusted sales at its diabetes
franchise were likely to have shrunk by 6-8 percent a year between
2015 and 2018 after third-quarter results below expectations.
It had previously forecast a 4-8 percent drop owing to persistent
pricing pressure in the United States, the world's largest
healthcare market, where its blockbuster insulin drug Lantus has
lost its patent.
"What is frustrating is that we constantly feel Sanofi is one step
behind the competition," another London-based investor said, asking
not to be named.
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"We are not expecting anything magical during the innovation day.
Management is likely to talk at length about its monoclonal antibody
candidate in multiple myeloma, isatuximab, but Genmab <GEN.CO> and
Johnson & Johnson (J&J)<JNJ.N> already have a drug on the market,
Darzalex, that sells well."
NO CHEAP TARGETS
Sanofi has said several times this year that it has felt no urge to
engage in a large acquisition and that investors were lauding its
financial discipline.
The group has, however, failed to land major deals after losing
California-based cancer specialist Medivation to Pfizer <PFE.N> in
2016 and Swiss biotech company Actelion to U.S. drugmaker J&J in
January.
"Looking back, Sanofi would maybe have overpayed for Medivation. In
that regard, their discipline is healthy, yet we see that the
company is struggling at laying out a strategy and getting us
excited," Moneta Asset Management's Gregoire Uettwiller said.
Moneta and Candriam are both long-term investors with small stakes
in Sanofi of around 0.1 percent, Reuters data shows.
Candriam's Van Den Eynde, meanwhile, says Sanofi needs to shed its
qualms about splashing out on a big deal.


"Once you see that your pipeline is not paying off, you cannot be
naive, you must engage in M&A," Van Den Eynde said.
"Hiding behind the fact that targets are expensive is not doing it.
In the modern world, no interesting firm will be available at low
valuations."
(Editing by David Goodman)
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