Sanofi boosts annual earnings guidance as Q2 sales growth led by Dupixent, vaccines

Headline results for the second quarter:

Prescription drug sales

€6.5 billion ($7.2 billion)

+3.4%

Revenue

€8.6 billion ($9.6 billion)

+5.5%

Loss

€87 million ($97 million)

-111.4%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Sanofi continued its growth phase with a solid business performance in the second quarter, led by the strong launch of Dupixent," remarked CEO Olivier Brandicourt, adding that "specialty care and vaccines were significant contributors across all geographies."

The company explained that the loss in the quarter was due to €1.8 billion ($2 billion) impairment charge mainly related to Eloctate after lower sales in the US and a revision of sales projections. "It is a non-cash event of course but it is clear that the competition from Hemlibra was a surprise to everyone and it is indeed putting pressure," chief financial officer Jean-Baptiste de Chatillon said.

Other results:

  • Genzyme unit: €2.6 billion ($2.9 billion), +26.5%
    • Dupixent: €496 million ($552 million), +181.8%, with US sales of €403 million ($448 million), +152.3% on a constant currency basis, driven by continued growth in atopic dermatitis
    • Eloctate: €171 million ($190 million), -2.8%, reflecting ongoing competitive pressure from Roche's Hemlibra, with US sales of €135 million ($150 million), -16.4% on a constant currency basis
  • Diabetes unit: €1.3 billion ($1.4 billion), -5.6%
    • Lantus: €758 million ($843 million), -14.9%, with sales in the US hit by lower average net prices and in Europe by biosimilar glargine competition
    • Toujeo: €220 million ($245 million), +1.4%, with sales in the US hit by lower average net prices, offset by growth in Europe and emerging markets
  • Aubagio: €466 million ($518 million), +15.3%, supported by performance in the US and Europe
  • Praluent: €66 million ($73 million), +6.5%, driven by growth in Europe
  • Vaccines division: €1 billion ($1.1 billion), +25.9%, mainly reflecting the recovery and growth of Pentaxim in China and a low basis for comparison
  • Emerging markets: €2.7 billion ($3 billion), +10% on a constant currency basis, supported by higher vaccines and rare disease sales

Looking ahead:

Sanofi now expects business earnings per share to grow approximately 5% on a constant currency basis, with the currency impact estimated to be between 1% and 2%. Previous guidance estimated that business earnings per share would grow between 3% and 5% on a constant currency basis, with the currency impact estimated to be around 2%.

What analysts said:

"Business [earnings per share] outlook is raised to the top-end, but suggests only minor potential upgrades to consensus, at most, in our view," remarked Jefferies analyst Peter Welford.

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