Sanofi posts rise in first-quarter sales, profit, but warns of upcoming drag from COVID-19 pandemic

Headline results for the first quarter:

Prescription drug sales

€6.8 billion ($7.3 billion)

+8.1%

Overall revenue

€8.97 billion ($9.7 billion)

+6.9%

Profit

€1.7 billion ($1.8 billion)

Versus profit of €1.1 billion ($1.2 billion)

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

What the company said:

"I am proud of the way Sanofi employees responded to the immense challenges of the COVID-19 pandemic," CEO Paul Hudson remarked, adding "this is exemplified by the multi-pronged approach to fight COVID-19 with the accelerated development of vaccine candidates and therapeutics while sustaining the impressive growth of Dupixent, the strength of the vaccines business as well as driving efficiencies and cash flow."

Sanofi suggested that COVID-19 stocking in channels explains about half of the sales growth in the first quarter. Hudson said "while the duration of the pandemic remains unknown at this point, I am confident Sanofi is well positioned to navigate these challenges."

Other results:

  • Specialty care unit: €2.7 billion ($2.9 billion), up 33.4%, driven by Dupixent and double-digit growth for Aubagio and rare disease drugs, sales of which grew 11% to €794 million ($858 million)
    • Dupixent: €776 million ($838 million), up 135.9%, with sales in the US climbing 123.7% at constant currencies to €613 million ($662 million), driven by continued growth in atopic dermatitis
    • Aubagio: €541 million ($584 million), up 23.8%, boosted by the US and European performance
    • Eloctate: €161 million ($174 million), down 7.5%, with US sales down 16.1% at constant currencies to €119 million ($129 million) as a result of ongoing competitive pressure
  • Diabetes unit: €1.3 billion ($1.4 billion), down 0.9%, with lower sales of Lantus and Toujeo in the US, partly offset by increases in the rest of the world and patient stockpiling due to the COVID-19 pandemic, notably in Europe
    • Lantus: €724 million ($782 million), down 6.5%, with US sales falling 21.5% at constant exchange rates to €230 million ($248 million) as a result of lower average net prices
    • Toujeo: €257 million ($278 million), up 21.8%, boosted by a "strong" performance in Europe due to patient switches from Lantus
  • Praluent: €73 million ($79 million), up 30.4%, led by growth in the US and rest of the world, while European sales were flat reflecting the suspension of marketing in Germany in August 2019 amid ongoing patent litigation 
  • Vaccines division: €909 million ($982 million), up 4.1%, with a "marginal" impact from COVID-19, as favourable effects on influenza vaccine sales were offset by negative impacts on travel vaccines
  • Consumer healthcare: €1.3 billion ($1.4 billion), up 3.3%, primarily due to higher demand related to COVID-19
  • Sales in China: €680 million ($734 million), down 14.4% on a constant exchange rate basis, hit by the country's volume-based procurement programme, which mainly impacted sales of Plavix and the Aprovel family

Looking ahead:

Sanofi still expects business earnings per share (EPS) this year to grow around 5% at constant exchange rates. The company added that the "favourable" first-quarter COVID-19 impact on sales and business EPS is predicted to be mainly offset during the second quarter.

The company is focusing on a number of strategies to develop a vaccine against COVID-19, including a recent agreement with GlaxoSmithKline that will combine technology from both drugmakers. However, Hudson said Friday "there is less concern about finding a successful vaccine than there is about making the volumes needed," adding "Sanofi is one of only a few companies that will be able to manufacture a vaccine at scale," with the possibility of ramping up production to more than 1 billion doses within 12 months.

Pipeline updates:

Sanofi disclosed that Phase II development of the anti-IL33 monoclonal antibody SAR440340 in atopic dermatitis, as part of a collaboration with Regeneron Pharmaceuticals, was discontinued due to lack of efficacy. Meanwhile, mid-stage development of SAR422459 for Stargardt disease was halted, with Sanofi seeking an out-licensing partner for the ABCA4 gene therapy.

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