Sanofi Growth Concerns Eclipse Raised Earnings Guidance

Sanofi raised its forecast for the year as the French drugmaker gains new patients for blockbuster drug Dupixent and introduces three medicines.

(Bloomberg) — Sanofi raised its forecast for the year as the French drugmaker gains new patients for blockbuster drug Dupixent and introduces three medicines.

Earnings per share, excluding some items, will likely grow by a mid-single-digit percentage at constant currencies, the company said Friday. The outlook change was largely anticipated and the stock fell as much as 4.1% in Paris trading as investors focused on the need for new sources of growth.

Sanofi is working to launch new medicines as generic competition ramps up for its multiple sclerosis drug Aubagio, and expand the market for its blockbuster Dupixent. The antibody treatment recently showed promise in treating a chronic lung disorder, an indication that could add billions to potential sales.

The new prescription drugs include Altuviiio for hemophilia and Beyfortus for respiratory syncytial virus in young children, which won regulatory clearance in the US this month. There’s also Tzield for type-1 diabetes, a drug it picked up in its acquisition of Provention Bio.

What Bloomberg Intelligence Says:

With currency headwinds increasing, the net result is likely to see consensus earnings estimates unchanged. The 2H performance will likely be of greater focus for investors as Altuviiio continues to roll out, Beyfortus is launched and Aubagio genericization continues.

—John Murphy, BI pharmaceuticals analyst

Sanofi also expects to record about €400 million ($439 million) in one-off sales of its Covid shot in the second half of the year. That’s the last time it expects to commercialize the product, Chief Financial Officer Jean-Baptiste Chasseloup de Chatillon said on a call with reporters.

Covid revenue will boost the vaccines division, where sales rose 9.1% in the second quarter thanks to demand for a five-in-one pediatric shot in China.

Separately, the company announced an agreement to buy Qunol, a closely held US dietary supplements brand whose sales are growing at double digits and will soon exceed €250 million, according to Chatillon.

Dupixent Surge

Earnings per share in the second quarter rose to €1.74, excluding some items, the company said. That surpassed analysts’ €1.68 estimate. Revenue growth was weaker than expected. Sales of Dupixent, which is prescribed for asthma, severe eczema and some skin conditions, surged 34% at constant currencies.

–With assistance from Jonas Ekblom.

(Updates with sales growth in last paragraph)

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