Sanofi signals return to growth in 2018

Sanofi announced Wednesday that fourth-quarter sales fell 2 percent year-over-year to 8.7 billion euros ($10.8 billion), meeting analyst estimates, hit by declining revenue from diabetes products in the US. The company noted that quarterly sales in its diabetes segment plunged 21.2 percent to 1.5 billion euros ($1.9 billion), with revenue from Lantus down 26.5 percent to 1.1 billion euros ($1.4 billion).

However, CEO Olivier Brandicourt said "we managed the challenges in US diabetes as well as the impact from sevelamer generics and Dengvaxia." In the quarter, sales of prescription drugs slipped 2.8 percent to 7.3 billion euros ($9 billion), while revenue from vaccines climbed 2.4 percent to 1.4 billion euros ($1.7 billion).

For other products, sales of Dupixent, which was approved last year in the US and Europe to treat adults with moderate-to-severe atopic dermatitis, reached 118 million euros ($146 million). Meanwhile, sales in Sanofi's Genzyme unit rose 9.2 percent to 1.7 billion euros ($2.1 billion).

The drugmaker noted that it recorded an impairment of tangible assets of 87 million euros ($107 million) in the three-month period related to its dengue vaccine Dengvaxia, following safety issues in the Philippines after a national immunisation programme was halted. Data disclosed late last year suggest that Dengvaxia may increase the risk of severe disease in people who had never been exposed to the virus. "The Dengvaxia question of course is very worrisome to us," Brandicourt said, adding "we have not seen any reaction similar to the one in the Philippines in other countries."

In the quarter, Sanofi posted a profit of 129 million euros ($159 million), down 83.9 percent on the prior-year period, as the company recorded a charge of 631 million ($780 million) primarily related to recent US tax reform.

For 2017, sales rose 3.6 percent to 35.1 billion euros ($43.4 billion), with revenue from prescription drugs up 2.4 percent to just under 30 billion euros ($37.1 billion). Meanwhile, annual profit jumped 79.1 percent to 8.4 billion euros ($10.4 billion).

FirstWord Reports: Providing insight, analysis and expert opinion on important Pharma trends and challenging issues <Click here>

Brandicourt noted Sanofi "recently...announced a series of strategic steps - we are obtaining the global rights to fitusiran and plan to acquire Bioverativ and Ablynx - which will establish Sanofi as a new global leader in rare blood disorders." The executive said "after a period of significant reshaping since 2015, we are positioned to drive growth in 2018."

Looking ahead, the company indicated that business earnings per share will grow between 2 percent and 5 percent this year on a constant exchange rate basis. Sanofi noted that the guidance includes the anticipated contribution from the recently announced acquisitions, while its predicted tax rate will be around 22 percent in 2018 as a result of US reforms. For further analysis, read ViewPoints: Sanofi's outlook justifies recent deal making.

The drugmaker added Wednesday that it expects to finalise a deal to sell its European generics unit in the third quarter. Sanofi indicated in 2016 that it plans to divest its European generic-drug business within the next year or two. Bidders for the unit reportedly include private equity firms Advent International, BC Partners, Carlyle Group, and a consortium of Blackstone Group and Nordic Capital, as well as at least one other pharmaceutical company.

To read more Top Story articles, click here.