Dupixent drives increase in Sanofi's Q4 sales, though swings to loss on impairment charges

Headline results for the fourth quarter:

Prescription drug sales

€6.5 billion ($7.1 billion)

+4.3%

Overall revenue

€9.6 billion ($10.6 billion; in line with forecasts)

+6.8%

Loss

€10 million ($11 million)

Versus profit of €254 million ($279 million)

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

What the company said:

"I am encouraged by the fourth-quarter results," commented CEO Paul Hudson, adding "the acceleration in sales performance was mainly driven by the impressive growth of Dupixent…and by our differentiated vaccines portfolio." The company indicated that impairment charges of €1.6 billion ($1.8 billion), related to Eloctate and Zantac, were recorded in the three-month period.

"We are making great progress in our ambition to transform Sanofi R&D and I am particularly excited by the positive proof-of-concept data for our BTK inhibitor, a potentially practice changing therapy for multiple sclerosis, announced today," Hudson remarked. In December last year, Sanofi detailed an overhaul of its research operations, halting work on diabetes and cardiovascular treatments to focus growth efforts on Dupixent and vaccines. 

Other results:

  • Genzyme unit: €2.8 billion ($3.1 billion), up 21.6%
    • Dupixent: €679 million ($747 million), up 142.5%, with US sales 135% higher at constant exchange rates to €545 million ($599 million), driven by continued growth in atopic dermatitis together with rapid uptake in asthma and launch in chronic rhinosinusitis with nasal polyposis
    • Eloctate: €177 million ($195 million), down 9.7%, with US sales hit by ongoing competitive pressure
  • Diabetes unit: €1.3 billion ($1.4 billion), down 7.8%, with US sales falling 20.5% at constant exchange rates to €454 million ($499 million), partly as a result of the increased contribution to the coverage gap related to Medicare Part D
    • Lantus: €729 million ($801 million), down 15.8%, with US revenue hit by lower average net prices and sales in Europe affected by biosimilar glargine competition
    • Toujeo: €234 million ($257 million), up 10.9%
  • Aubagio: €482 million ($530 million), up 8.1%, led by the US, where sales rose 7.1% at constant exchange rates to €343 million ($377 million)
  • Praluent: €75 million ($82 million), down 8.5%, with sales in the US declining 26.9% at constant exchange rates to €39 million ($43 million) as a result of significantly higher rebates
  • Vaccines division: €1.9 billion ($2.1 billion), up 25%, as the majority of US influenza vaccines shipments occurred in the quarter, reflecting the delay in strain selection by the WHO
  • Emerging markets: €2.7 billion ($3 billion), up 1.8%, as growth in vaccines and diabetes was largely offset by lower sales of established prescription drugs
  • Full-year revenue: €36.1 billion ($39.7 billion), up 4.8%
  • Full-year profit: €2.8 billion ($3.1 billion), down 34.8%

Looking ahead:

Sanofi expects business earnings per share this year to grow around 5% at constant exchange rates.

What analysts said:

Citi analyst Peter Verdult remarked "we continue to like the set-up and see clear evidence that Sanofi is transitioning from perennial value trap to offering investors growth at a reasonable price."

Pipeline updates:

Sanofi confirmed that it has removed the viral vector prime and rgp120 boost vaccine from its pipeline following the recent failure of the HIV vaccine candidate HVTN 702. The regimen comprises the drugmaker's ALVAC-HIV canarypox-based vaccine and GlaxoSmithKline's GP120 protein subunit vaccine.

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