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Sanofi (SNY - Free Report) reported third-quarter 2022 adjusted earnings of $1.45 per American depositary share, beating the Zacks Consensus Estimate of $1.31 per share as well as our estimate of $1.33 per share. Earnings rose 32.1% on a reported basis and 17.9% on a constant currency rate (“CER”) basis, driven by higher sales and improved margins.
Net sales increased 19.7% on a reported basis and 9% on a CER basis to $12.57 billion (€12.48 billion) on higher sales of Dupixent and vaccines. Exchange rate movements boosted sales by 10.7 percentage points in the quarter. Sales beat the Zacks Consensus Estimate of $11.99 billion.
Sales rose 15% at CER in the United States and 4.5% in the Rest of the World (including China, Japan, Brazil and Russia). In Europe, sales increased 4.6%.
All growth rates mentioned below are on a year-on-year basis and at CER.
Segment Performance
Pharmaceuticals sales rose 5.1% in the quarter to €7.9 billion, driven by the continued strong performance of the Specialty Care segment.
Sanofi Specialty Care GBU sales increased 19.9% to €4.4 billion, mainly driven by Dupixent.
Dupixent generated sales of €2.31 billion in the quarter, up 44.5% year over year. Sales of the drug in the United States rose 45.1%, driven by strong demand for its approved indications, atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyposis indications. In the United States, Dupixent’s new prescription share and total prescription share rose 49% and 38%, respectively.
Dupixent sales rose 38.7% in Europe and 46.6% in the Rest of the World as the company expanded in newer markets and younger age groups.
In the immunology and neurology franchise, Aubagio sales declined 3.7% to €521 million due to competitive pressure and price in the United States. Kevzara recorded sales of €88 million in the quarter, down 2.4% due to a difficult comparison with the third quarter of 2021, which had benefited from a temporary increase in demand for IL-6 receptor blockers.
Sanofi markets Dupixent and Kevzara in partnership with Regeneron (REGN - Free Report) . While sales are recorded by Sanofi, Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara.
Sales of rare disease drugs rose 7.7% to €900 million, driven by the Pompe and Gaucher franchises, which benefitted from favorable buying patterns in the Rest of the World region. In the Pompe franchise, Myozyme sales declined 10.2% to €255 million due to patients switching to Nexviazyme. The new drug Nexviazyme recorded sales of €58 million in the third quarter compared with €43 million in the previous quarter. Fabrazyme sales were €240 million, up 5.7%. In the Gaucher franchise, Cerezyme sales rose 8.8% to €181 million, driven by favorable buying patterns in the Rest of the World region.
Oncology sales declined 8.4% to €224 million due to a lack of consolidation of Libtayo sales. In 2022, Sanofi restructured its immuno-oncology collaboration with Regeneron regarding Libtayo by granting Regeneron the worldwide exclusive license rights of the drug. Prior to that, the companies co-commercialized the drug in the United States and shared worldwide operating profits.
Sarclisa sales rose 54.2% to €79 million. Jevtana’s sales declined 13.3% to €101 million due to the entry of generic competition in some countries in Europe.
The rare blood disorders franchise recorded sales of €336 million, up 3.5% year over year, as higher sales of Alprolix and Cablivi were offset by lower Eloctate sales. Alprolix sales rose 8.9% year over year to €126 million. While Cablivi sales were up 14.3% to €52 million, Eloctate sales declined 7.6% to €151 million in the quarter.
Sales in General Medicines GBU declined 8.5% to €3.49 billion, as the growth of core drugs (like Multaq, Toujeo, Praluent and Rezurock) was more than offset by lower sales of non-core drugs (like Lantus and Aprovel).
Lantus sales decreased 17.7% to €559 million in the quarter. Toujeo generated sales of €304 million in the reported quarter, up 17.2% year over year. Lovenox sales declined 23% to €307 million due to decreasing demand from COVID-19. Aprovel sales rose 11.2% to €129.0 million. Praluent sales rose 33.9% to €83 million.
Vaccines GBU sales gained 23.5% to €3.32 billion in the quarter, mainly due to strong demand for influenza vaccines. Sales were also supported by improvement in Travel vaccines and growth of Meningitis and PPH franchises.
While sales of flu vaccines rose 32.4%, sales of PPH vaccines rose 9.1% in the quarter. Meningitis vaccine sales rose 11.9%. Sales of travel and other endemic vaccines rose 64.6% in the quarter. Booster vaccine sales rose 1.3% in the quarter.
Consumer Healthcare (CHC) stand-alone unit generated sales of €1.27 billion, up 1.9%, driven by growth in Europe and the Rest of the World region while sales declined in the United States. The CHC segment witnessed strong growth in Digestive Wellness and Cough & Cold categories. Sales in the CHC segment were partly hurt due to a difficult comparison with the third quarter of 2021, which had benefited from COVID-related higher demand.
Costs Rise
Business selling, general and administrative expenses increased 16.7% at CER in the quarter, reflecting increased investments in Specialty Care and costs incurred for the acceleration of cloud migration and application development. Business research and development expenses increased 20.2% at CER due to higher investments behind priority assets to boost the pipeline.
2022 Guidance
Sanofi raised its financial guidance for 2022. The company now expects adjusted earnings to grow approximately 16% at CER in 2022 versus the prior expectation of approximately 15%. It also anticipates a positive currency impact in the range of 9.5%-10.5% on earnings, up from the previous 7.5%-8.5% range
Sanofi expects its business operating income margin to improve to 30% in 2022
Our Take
Sanofi’s quarterly results were impressive as it beat estimates for both earnings and sales. The company, once again, raised its earnings growth expectations for the year, driven by a strong performance in vaccines and the specialty care business. Shares were up 2.3% in pre-market trading in response to the earnings and sales beat and guidance increase.
Sanofi’s stock has declined 17% in the year so far compared to the industry’s rise of 1.8%.
Image Source: Zacks Investment Research
Dupixent continued its outstanding performance in the quarter. The drug, has, in a very short time, become the key top-line driver for Sanofi. It was approved for its fifth indication in the United States in the quarter, prurigo nodularis, making it the first and only treatment indicated for this dermatology disease.
With outside U.S. revenues accelerating and multiple approvals for new indications, Dupixent’s sales are expected to be higher. Higher vaccine sales, mainly flu vaccines, contributed to driving top-line growth in the quarter. The French drug giant’s earnings growth expectations for 2022 are quite encouraging.
Some better-ranked biotech stocks are Castle Biosciences (CSTL - Free Report) and Codiak BioSciences , both with a Zacks Rank #1.
In the past 60 days, 2022 loss per share estimates for Castle Biosciences have narrowed from $3.07 to $2.81, while that for 2023 have narrowed from $3.08 to $2.93. Shares of Castle Biosciences have declined 48.7% in the year-to-date period.
Earnings of Castle Biosciences beat estimates in two of the last four quarters and missed the mark twice, witnessing an earnings surprise of 19.46%, on average.
In the past 60 days, estimates for Codiak BioSciences’ 2022 loss per share have narrowed from $1.94 to $1.81. During the same period, the loss estimates per share for 2023 have narrowed from $2.14 to $1.53. Shares of Codiak BioSciences have lost 93.8% in the year-to-date period.
Earnings of Codiak BioSciences beat estimates in three of the last four quarters and missed the mark just once, delivering an earnings surprise of 35.40%, on average.
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Sanofi (SNY) Q3 Earnings Beat, Dupixent, Flu Jabs Push Sales
Sanofi (SNY - Free Report) reported third-quarter 2022 adjusted earnings of $1.45 per American depositary share, beating the Zacks Consensus Estimate of $1.31 per share as well as our estimate of $1.33 per share. Earnings rose 32.1% on a reported basis and 17.9% on a constant currency rate (“CER”) basis, driven by higher sales and improved margins.
Net sales increased 19.7% on a reported basis and 9% on a CER basis to $12.57 billion (€12.48 billion) on higher sales of Dupixent and vaccines. Exchange rate movements boosted sales by 10.7 percentage points in the quarter. Sales beat the Zacks Consensus Estimate of $11.99 billion.
Sales rose 15% at CER in the United States and 4.5% in the Rest of the World (including China, Japan, Brazil and Russia). In Europe, sales increased 4.6%.
All growth rates mentioned below are on a year-on-year basis and at CER.
Segment Performance
Pharmaceuticals sales rose 5.1% in the quarter to €7.9 billion, driven by the continued strong performance of the Specialty Care segment.
Sanofi Specialty Care GBU sales increased 19.9% to €4.4 billion, mainly driven by Dupixent.
Dupixent generated sales of €2.31 billion in the quarter, up 44.5% year over year. Sales of the drug in the United States rose 45.1%, driven by strong demand for its approved indications, atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyposis indications. In the United States, Dupixent’s new prescription share and total prescription share rose 49% and 38%, respectively.
Dupixent sales rose 38.7% in Europe and 46.6% in the Rest of the World as the company expanded in newer markets and younger age groups.
In the immunology and neurology franchise, Aubagio sales declined 3.7% to €521 million due to competitive pressure and price in the United States. Kevzara recorded sales of €88 million in the quarter, down 2.4% due to a difficult comparison with the third quarter of 2021, which had benefited from a temporary increase in demand for IL-6 receptor blockers.
Sanofi markets Dupixent and Kevzara in partnership with Regeneron (REGN - Free Report) . While sales are recorded by Sanofi, Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara.
Sales of rare disease drugs rose 7.7% to €900 million, driven by the Pompe and Gaucher franchises, which benefitted from favorable buying patterns in the Rest of the World region. In the Pompe franchise, Myozyme sales declined 10.2% to €255 million due to patients switching to Nexviazyme. The new drug Nexviazyme recorded sales of €58 million in the third quarter compared with €43 million in the previous quarter. Fabrazyme sales were €240 million, up 5.7%. In the Gaucher franchise, Cerezyme sales rose 8.8% to €181 million, driven by favorable buying patterns in the Rest of the World region.
Oncology sales declined 8.4% to €224 million due to a lack of consolidation of Libtayo sales. In 2022, Sanofi restructured its immuno-oncology collaboration with Regeneron regarding Libtayo by granting Regeneron the worldwide exclusive license rights of the drug. Prior to that, the companies co-commercialized the drug in the United States and shared worldwide operating profits.
Sarclisa sales rose 54.2% to €79 million. Jevtana’s sales declined 13.3% to €101 million due to the entry of generic competition in some countries in Europe.
The rare blood disorders franchise recorded sales of €336 million, up 3.5% year over year, as higher sales of Alprolix and Cablivi were offset by lower Eloctate sales. Alprolix sales rose 8.9% year over year to €126 million. While Cablivi sales were up 14.3% to €52 million, Eloctate sales declined 7.6% to €151 million in the quarter.
Sales in General Medicines GBU declined 8.5% to €3.49 billion, as the growth of core drugs (like Multaq, Toujeo, Praluent and Rezurock) was more than offset by lower sales of non-core drugs (like Lantus and Aprovel).
Lantus sales decreased 17.7% to €559 million in the quarter. Toujeo generated sales of €304 million in the reported quarter, up 17.2% year over year. Lovenox sales declined 23% to €307 million due to decreasing demand from COVID-19. Aprovel sales rose 11.2% to €129.0 million. Praluent sales rose 33.9% to €83 million.
Vaccines GBU sales gained 23.5% to €3.32 billion in the quarter, mainly due to strong demand for influenza vaccines. Sales were also supported by improvement in Travel vaccines and growth of Meningitis and PPH franchises.
While sales of flu vaccines rose 32.4%, sales of PPH vaccines rose 9.1% in the quarter. Meningitis vaccine sales rose 11.9%. Sales of travel and other endemic vaccines rose 64.6% in the quarter. Booster vaccine sales rose 1.3% in the quarter.
Consumer Healthcare (CHC) stand-alone unit generated sales of €1.27 billion, up 1.9%, driven by growth in Europe and the Rest of the World region while sales declined in the United States. The CHC segment witnessed strong growth in Digestive Wellness and Cough & Cold categories. Sales in the CHC segment were partly hurt due to a difficult comparison with the third quarter of 2021, which had benefited from COVID-related higher demand.
Costs Rise
Business selling, general and administrative expenses increased 16.7% at CER in the quarter, reflecting increased investments in Specialty Care and costs incurred for the acceleration of cloud migration and application development. Business research and development expenses increased 20.2% at CER due to higher investments behind priority assets to boost the pipeline.
2022 Guidance
Sanofi raised its financial guidance for 2022. The company now expects adjusted earnings to grow approximately 16% at CER in 2022 versus the prior expectation of approximately 15%. It also anticipates a positive currency impact in the range of 9.5%-10.5% on earnings, up from the previous 7.5%-8.5% range
Sanofi expects its business operating income margin to improve to 30% in 2022
Our Take
Sanofi’s quarterly results were impressive as it beat estimates for both earnings and sales. The company, once again, raised its earnings growth expectations for the year, driven by a strong performance in vaccines and the specialty care business. Shares were up 2.3% in pre-market trading in response to the earnings and sales beat and guidance increase.
Sanofi’s stock has declined 17% in the year so far compared to the industry’s rise of 1.8%.
Image Source: Zacks Investment Research
Dupixent continued its outstanding performance in the quarter. The drug, has, in a very short time, become the key top-line driver for Sanofi. It was approved for its fifth indication in the United States in the quarter, prurigo nodularis, making it the first and only treatment indicated for this dermatology disease.
With outside U.S. revenues accelerating and multiple approvals for new indications, Dupixent’s sales are expected to be higher. Higher vaccine sales, mainly flu vaccines, contributed to driving top-line growth in the quarter. The French drug giant’s earnings growth expectations for 2022 are quite encouraging.
Zacks Rank
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-eps-surprise-chart | Sanofi Quote
Stocks to Consider
Some better-ranked biotech stocks are Castle Biosciences (CSTL - Free Report) and Codiak BioSciences , both with a Zacks Rank #1.
In the past 60 days, 2022 loss per share estimates for Castle Biosciences have narrowed from $3.07 to $2.81, while that for 2023 have narrowed from $3.08 to $2.93. Shares of Castle Biosciences have declined 48.7% in the year-to-date period.
Earnings of Castle Biosciences beat estimates in two of the last four quarters and missed the mark twice, witnessing an earnings surprise of 19.46%, on average.
In the past 60 days, estimates for Codiak BioSciences’ 2022 loss per share have narrowed from $1.94 to $1.81. During the same period, the loss estimates per share for 2023 have narrowed from $2.14 to $1.53. Shares of Codiak BioSciences have lost 93.8% in the year-to-date period.
Earnings of Codiak BioSciences beat estimates in three of the last four quarters and missed the mark just once, delivering an earnings surprise of 35.40%, on average.