10 Cheap Pharmaceutical Stocks to Buy According to Short Sellers

8. Sanofi (NASDAQ:SNY)

Short Interest as % of  Shares Outstanding: 0.44%

Number of Hedge Fund Investors In Q2 2024: 28

Sanofi (NASDAQ:SNY) is a French pharmaceutical giant that is one of the biggest and most diversified pharma companies in the world. Its product portfolio stretches from branded products to generic drugs, general healthcare products, and vaccines. The firm’s cash and equivalents of EUR8.8 billion also provide it with considerable resources to invest in new production or research facilities for new drug development. These days, Sanofi (NASDAQ:SNY)’s story surrounds its Dupixent drug which is the European Union’s first approved drug for chronic obstructive pulmonary disease or COPD. This market is estimated to be worth $61.5 billion by 2032, and Sanofi (NASDAQ:SNY)’s early mover advantage should provide it with key patents that it can milk for most of the market’s early growth phase. The firm’s R&D dominance is also evidenced by its pipeline which has 33 products in Phase 3 trials. This aggressive growth has come at a cost though as evidenced by Sanofi (NASDAQ:SNY)’s decision to abandon its target of 32% operating margin in 2025 due to a focus on R&D. Any further similar announcements, particularly those surrounding a consumer healthcare spinoff could mean trouble for the stock especially since P/E of 29.58 is quite higher than rival GSK’s 14.

Sanofi (NASDAQ:SNY)’s management shared important details for its pipeline during the Q2 2024 earnings call:

“On my last slide, I would like to highlight the exciting upcoming news flow for the next 18 months in support of increased R&D productivity. We plan 12 phase 3 readouts, 13 submissions, nine regulatory decisions, and we look forward to keeping you updated on the progress. Before handing back to Paul, I’d like to extend my sincere thanks to every colleague in the R&D team for the work they do for patients.”