French drugmaker Sanofi (NASDAQ:SNY) is at the forefront when it comes to the development of a coronavirus treatment or vaccine, and yet its shares haven't benefited from the efforts. While Sanofi has outperformed the S&P 500 index (down 26% this year), it has still lost 20% over that time. Meanwhile, the coronavirus outbreak became a pandemic, with cases now totaling more than 207,000 worldwide.

Researchers work in a lab and take note of data.

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No one can say Sanofi isn't a big part of the fight against COVID-19, the illness caused by the new coronavirus. Last month, its vaccine business announced a collaboration with the U.S. Department of Health and Human Services to advance a coronavirus vaccine. The company is using its previous research and development in treatments for severe acute respiratory syndrome (SARS) as a basis for its work.

This week, Sanofi and Regeneron Pharmaceuticals (NASDAQ:REGN) said they have started a clinical trial using their rheumatoid arthritis treatment, Kevzara, to treat COVID-19 patients in New York. And in further news this week, Sanofi plans to offer millions of doses of its antimalaria drug, Plaquenil, to French authorities for the treatment of patients. A company spokesperson told Agence France-Presse that initial trials on a small group of patients were "promising."

Why has Sanofi lost out?

None of this news has lifted Sanofi shares, yet a handful of other biotech companies working on coronavirus treatment and prevention have seen their shares skyrocket. For example, Moderna (NASDAQ:MRNA) has climbed 43% so far this year, while Inovio Pharmaceuticals (NASDAQ:INO) has nearly doubled. So why has Sanofi lost out? It has less to do with the quality of the company's treatment and more to do with how investors view a big pharmaceutical player versus a small biotech company.

Investors bet on clinical-stage biotech companies for fast-moving innovation -- especially in a race to treat a pandemic. Though the treatment of outbreaks doesn't mean a huge financial advantage for companies, the discovery of a therapy or vaccine can offer a young biotech company a significant boost. It may validate a new technology or put the company on investors's -- or acquirers's -- radar screens.

Sanofi investors are more focused on how new chief executive officer Paul Hudson plans to reposition the company as sales of older blockbuster drugs decline. News so far has been positive. Hudson announced he would end diabetes and cardiovascular research and favor higher-growth areas such as immuno-oncology. The company is also putting resources behind eczema drug Dupixent, which was the largest contributor to growth in the fourth quarter, generating $733 million in sales for a 135% increase year over year. And in additional positive news, the U.S. Food and Drug Administration earlier this month approved Sarclisa, Sanofi's drug for patients with relapsed refractory multiple myeloma, a cancer of plasma cells.

Exposure to China

If a pandemic weren't shaking market confidence, at least some of this news might have lifted Sanofi's shares. At the moment, however, the drugmaker has followed its big-pharma peers lower. For example, Novartis (NYSE:NVS) has dropped 20%, while GlaxoSmithKline (NYSE:GSK) has fallen 27%. Work on coronavirus treatments hasn't been enough to lift Sanofi shares, and the company's exposure to China -- where the outbreak began, resulting in quarantines and business shutdowns -- may be weighing on the stock ahead of the next earnings report. Sanofi made 7.5% of its net sales in China in 2019 and, like its peers, depends on the country for active pharmaceutical ingredients.

The next catalyst for Sanofi likely will be that upcoming earnings report, which is set for April 24. At that point, pharmaceutical investors may learn more about the coronavirus outbreak's impact on the first quarter. I expect that any effects will be temporary, and I still believe in the long-term Sanofi story. In the meantime, though, Sanofi shares could be in for more declines as the outbreak weighs on the general market.