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Sanofi (SNY) Q1 Earnings & Sales Beat, Keeps 2021 EPS View

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Sanofi (SNY - Free Report) reported first-quarter 2021 adjusted earnings of 97 cents per American depositary share, which beat Zacks Consensus Estimate of 83 cents per share. Earnings rose 5.2% on a reported basis and 15% on constant currency rates (“CER”) basis.

First-quarter net sales declined 4.3% on a reported basis to $10.39 billion (€8.59 billion) due to currency headwinds of 6.7%. At CER, sales rose 2.4% year over year driven by higher sales of Sanofi’s blockbuster eczema medicine, Dupixent, and vaccines. Sales slightly beat Zacks Consensus Estimate of $10.37 billion.

Sales rose 6.4% at CER in the United States and 4.6% in the Rest of the World (includes China, Japan, Brazil and Russia). However, sales declined 5.6% in Europe.

All growth rates mentioned below are on a year-on-year basis and at CER.

Segmental Performance

Pharmaceuticals sales rose 3.8% in the quarter to €6.56 billion as strong performance of Dupixent was partially offset by lower sales in General Medicines in United States and Europe.

Sanofi Specialty Care GBU sales increased 15.3% to €2.89 billion, mainly driven by Dupixent.

In immunology and neurology franchise, Dupixent generated sales of €1.05 billion in the quarter, up 45.6%. Sales of the drug in the United States rose 41.6% driven by continued growth in atopic dermatitis and rapid uptake in asthma and chronic rhinosinusitis with nasal polyposis indications. Sales rose 52.2% in Europe and 71.2% in Rest of the World.

Kevzara recorded sales of €57 million in the quarter, up 10.5%. Please note that Sanofi markets Dupixent and Kevzara in partnership with Regeneron (REGN - Free Report) . Aubagio sales declined 1.1% to €500 million.

Sales of rare disease drugs rose 4.4% to €770 million as demand growth in Rest of World was partially offset by softer sales performance in Europe. Myozyme sales rose 0.8% to €235 million. Fabrazyme sales were €208 million, up 4.7%. Cerezyme sales rose 4.2% to €178 million.

Oncology sales increased 25.8% to €221 million driven by launches of Sarclisa and Libtayo. Key cancer drug, Jevtana’s sales declined 2.9% to €126 million.

Rare blood disorders franchise recorded sales of €272 million, down 0.7% year over year as industrial sales of Alprolix and Eloctate to collaboration partner, Sobi, were lower than 2020 levels. Excluding industrial sales to Sobi, first quarter sales were up 5.1% driven by Alprolix and Cablivi. Sales of Eloctate declined 9.9% to €134 million in the quarter.

Sales in General Medicines GBU declined 3.8% to €3.67 billion hurt by lower Lantus and Aprovel/Avapro sales and some negative COVID-19 impact.

The Diabetes franchise declined 1.7% to €1.18 billion mainly due to lower sales in United States and Europe. Sales of diabetes drugs in the United States declined 5.3%. In Europe, sales fell 10.2% while in Rest of the World, sales rose 5.3%.

Lantus sales decreased 3.7% to €652 million in the quarter due to pricing pressure, patients switching to Toujeo and biosimilar competition. Toujeo generated sales of €253 million in the reported quarter, up 5.1% year over year.

Sales of Cardiovascular and Established Rx Products came in at €2.31 billion, down 5.6% mainly due to the impact of the pandemic, divestments and lower sales Aprovel/Avapro.

Vaccines GBU sales rose 5.3% to €915 million in the quarter driven by demand growth for influenza vaccines and higher sales of Polio/Pertussis/Hib vaccines. The sales growth was partially offset by lower sales of travel and adult booster vaccinations due to the impact of the pandemic.

Consumer Healthcare (CHC) stand-alone unit generated sales of €1.13 billion, down 7.3% due to lower demand for cough and cold products in Europe thanks to social distancing measures. Moreover, non-core divestments and difficult comparision from first quarter of 2020 which benefited from pandemic related pantry loading, also hurt sales.

Cost Discussion

Selling, general and administrative expenses declined 0.7% at CER in the quarter, reflecting increased investments in Specialty Care and Vaccines, which offset the benefit from cost savings. Research and development expenses decreased 1.7% at CER as higher investments behind priority assets was partially offset by lower costs on mature products.

2021 Guidance

Sanofi continues to expect earnings to grow in a high single-digit range in 2021. However, it anticipates a negative currency impact in the range of 4.0%-5.0% on earnings, lower than prior expectation of 4.5%-5.5%.

Our Take

Sanofi’s results were strong as it beat estimates for both earnings and sales. Dupixent continued its outstanding performance in the quarter. The drug has, in a very short time, become the key top-line driver for Sanofi. The Vaccines unit also delivered growth in its core segments in the quarter. The French drug giant also kept its full year outlook intact.

Shares were up around 2% in pre-market trading on Wednesday. Sanofi stock has risen 6.2% this year so far compared with an increase of 2.8% for the industry



Meanwhile, Sanofi is working on two COVID-19 vaccine candidates, one each in partnership with Glaxo (GSK - Free Report) and Translate Bio (TBIO - Free Report) . A phase I/II study on Sanofi/Translate Bio’s mRNA-based COVID-19 vaccine began in March while a phase II study on Sanofi and Glaxo’s adjuvanted recombinant protein-based COVID-19 vaccine candidate began in February. Enrollment in the phase II study on recombinant COVID 19 vaccine candidate is complete with data expected next month. Meanwhile, Sanofi is providing manufacturing support for Moderna, J&J and BioNTech’s COVID-19 vaccines.

Sanofi currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sanofi Price, Consensus and EPS Surprise

  Sanofi Price, Consensus and EPS Surprise

Sanofi price-consensus-eps-surprise-chart | Sanofi Quote

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