Sanofi to expand cost savings as Q3 sales, profit fall

Headline results for the fourth quarter:

  • Prescription drug sales: €6.3 billion ($7.6 billion), down 3.9%
  • Overall revenue: €9.4 billion ($11.3 billion; forecasts of €9.6 billion), down 2.4%
  • Profit: €1.1 billion ($1.3 billion; forecasts of €741.9 million), versus loss of €10 million ($12 million) in the prior year

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

What the company said:

Sanofi indicated that it expects additional cost savings of €500 million ($601 million) by 2022, raising its target set in 2019 to €2.5 billion ($3 billion). The company noted that the savings, which will be "derived from continued operational excellence," will be fully reinvested to further drive top line growth and fund its pipeline. Sanofi said that it achieved around €1.7 billion ($2 billion) of savings in 2020.

"We are tracking ahead of schedule on our plans for growth, efficiencies and cutting edge science in our pipeline," remarked CEO Paul Hudson, adding that "the reshaping of our general medicines and consumer healthcare business units will enable both to become even more significant contributors to Sanofi's growth and profitability."

Other results:

  • Specialty care unit: €2.8 billion ($3.4 billion), up 11.3%, driven by the "strong" performance of Dupixent
    • Dupixent: €982 million ($1.2 billion), up 44.6%, with sales in the US jumping 52.7% to €773 million ($930 million), driven by continued "strong demand" in atopic dermatitis, as well as asthma and chronic rhinosinusitis with nasal polyposis
    • Aubagio: €472 million ($567 million), down 2.1%, with growth in Europe led by an earlier price increase in Germany, while US sales were flat as a result of fewer new patient starts related to increased competition
    • Eloctate: €156 million ($187 million), down 11.9%, due to lower US sales as a result of ongoing competitive pressure
  • Diabetes unit: €1.1 billion ($1.3 billion), down 14.3%, hit by a continued decline in average US glargine prices and the impact of the COVID-19 pandemic
    • Lantus: €587 million ($705 million), down 19.5%, mainly due to falling prices in the US, as well as patients switching to Toujeo and biosimilar competition
    • Toujeo: €221 million ($266 million), down 5.6%, with US sales hit by a continued decline in the average price
  • Praluent: €65 million ($78 million), down 13.3%, with growth in Europe more than offset by lower sales in the US
  • Vaccines division: €2.1 billion ($2.5 billion), up 8%, boosted by record demand for differentiated influenza vaccines and continued growth of polio/pertussis/Hib vaccines
  • Consumer healthcare: €1 billion ($1.2 billion), down 10.8%, hit by decreased sales of cough and cold products in Europe
  • Sales in China: €492 million ($591 million), up 9.9% on a constant exchange rate (CER) basis
  • Full-year prescription drug sales: €25.7 billion ($30.9 billion), down 0.1%
  • Full-year revenue: €36 billion ($43.4 billion), down 0.2%
  • Full-year profit: €12.3 billion ($14.8 billion), up 338.8%, boosted by a one-time gain of more than €7 billion ($8.4 billion) from the sale of shares in Regeneron Pharmaceuticals

Looking ahead:

Sanofi expects business earnings per share to grow in the high-single digits this year on a CER basis. Meanwhile, chief financial officer Jean-Baptiste de Chatillon suggested that Dupixent "will become accretive to business operating margin by the end of 2022," with the company noting that the drug is on a "clear path" to reaching more than €10 billion ($12 billion) in annual sales.

Pipeline updates:

Sanofi disclosed a number of changes in its mid-stage pipeline, including that development of the anti-IL4/IL13 bispecific monoclonal antibody romilkimab in systemic scleroderma will not be pursued. In addition, the anti-IL-33 therapy itepekimab will not be pursued in asthma, while isatuximab in combination with cemiplimab for lymphoma was discontinued. Further, the company said that a Phase II study of venglustat in Parkinson's disease with GBA mutations failed to meet its primary endpoint and the indication was halted.

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