We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sanofi (SNY) Beats on Q2 Earnings, Misses Sales, Stock Down
Read MoreHide Full Article
Sanofi (SNY - Free Report) reported second-quarter 2023 adjusted earnings of 99 cents per American depositary share, which beat the Zacks Consensus Estimate of 88 cents. Earnings rose 0.6% on a reported basis and 8.1% on a constant currency rate (“CER”) basis.
Net sales declined 1.5% on a reported basis to $10.85 billion (€9.97 billion). Exchange rate movements hurt sales by 4.8 percentage points in the quarter. Sales rose 3.3% on a CER basis. Sales missed the Zacks Consensus Estimate of $11.47 billion.
Sales declined 1.7% at CER in the United States but rose 8.5% in the Rest of the World (including China, Japan, Brazil and Russia). In Europe, sales rose 3.8%.
All growth rates mentioned below are on a year-on-year basis and at CER.
Segment Performance
Sanofi’s Biopharma segment includes Global Business Units (GBUs) Specialty Care, General Medicine and Vaccines. Biopharma sales rose 3.7% in the quarter to €8.74 billion.
Sanofi Specialty Care GBU sales increased 11.8% to €4.4 billion, mainly driven by Dupixent and vaccines.
Dupixent generated sales of €2.56 billion in the quarter, up 34.2% year over year. Dupixent sales were less than our estimates of €2.62 billion.
Sales of the drug in the United States rose 33.2%, driven by strong demand for its approved indications, atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyposis indications, eosinophilic esophagitis and prurigo nodularis. In the United States, Dupixent’s new prescription share and total prescription share rose 53% and 32%, respectively.
Dupixent sales rose 30.1% in Europe and 44.5% in the Rest of the World, driven by sales in Japan and China.
Among the immunology and neurology medicines, Aubagio sales declined 58.2% to €216 million due to generic competition in the United States and Canada. Aubagio generics were launched in the United States in March 2023 while in Europe, generics are expected to be launched in the fourth quarter. Kevzara recorded sales of €92 million in the quarter, up 22.1%.
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.
Among the rare disease drugs, in the Pompe franchise, Myozyme sales declined 14.7% to €208 million due to patients switching to Nexviazyme. The new drug Nexviazyme/Nexviadzyme recorded sales of €103 million in the second quarter compared with €81 million in the previous quarter. Fabrazyme sales were €250 million, up 9.7% due to growth in all regions. In the Gaucher franchise, Cerezyme sales declined 0.5% to €181 million.
Newly launched rare disease drug Xenpozyme recorded sales of €20 million in the quarter compared with €18 million in the previous quarter, mainly driven by its uptake in Europe.
In Oncology, Sarclisa sales rose 53.1% to €94 million, reflecting growth in all three geographic regions. Jevtana’s sales declined 3.8% to €97 million due to the entry of generic competition in Europe and increased competitive pressure in the United States.
Among the rare blood disorder drugs, Alprolix sales rose 7.8% to €135 million. Eloctate sales declined 12.4% to €30 million in the quarter due to patients switching to the new drug Altuviiio. New drug Enjaymo recorded sales of €17 million in the quarter compared with €16 million in the previous quarter.
Sanofi’s newest rare blood disorder drug, Altuviiio, a once-weekly new class of factor VIII therapy for hemophilia A, was launched at the end of March in the United States. The drug recorded sales of €18 million in the second quarter.
Sales in General Medicines GBU declined 7.3% to €3.11 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). Sales in General Medicines missed our estimates of €3.41 billion.
Lantus sales decreased 36.5% to €353 million in the quarter. Toujeo generated sales of €291 million in the reported quarter, up 15.4% year over year. Lovenox sales declined 11.3% to €284 million. Aprovel sales declined 9.2% to €104.0 million. Praluent sales declined 26.6% to €91 million.
Vaccines GBU sales rose 9.1% to €1.22 billion in the quarter, mainly due to higher sales of Polio/Pertussis/Hib (PPH) vaccines and remaining contractual shipments of VidPrevtyn Beta, Sanofi’s recombinant COVID-19 booster vaccine, in Europe and United Kingdom. Total vaccine sales were in line with our estimates.
While sales of flu vaccines declined 10.4%, sales of PPH vaccines rose 12.4% in the quarter. Sales of meningitis, travel and other endemic vaccines declined 5.7% in the quarter. Booster vaccine sales rose 0.7% in the quarter.
In July, the FDA approved Sanofi and partner AstraZeneca’s (AZN - Free Report) respiratory syncytial virus (“RSV”) antibody Beyfortus (nirsevimab) to protect newborns and infants. AstraZeneca/Sanofi expect to launch Beyfortus in the country ahead of the upcoming 2023/2024 RSV season.
The Consumer Healthcare (CHC) standalone unit generated sales of €1.22 billion, up 0.7%, supported by growth in Europe and Rest of World region.
Costs Rise
Business selling, general and administrative expenses rose 3.9% at CER in the quarter on increased investments in Specialty Care and Vaccines and further investments in CHC. Business research and development expenses increased 0.4% at CER due to higher investments in Specialty Care and Vaccines.
2023 Guidance
Sanofi expects adjusted earnings to grow at a mid-single-digit at CER, up from the prior expectation of a low single-digit range at CER in 2023. It anticipates a negative currency impact in the range of 6.5%-7.5% on earnings versus the prior expectation of 5.5%-6.5%
Our Take
Sanofi’s quarterly results were mixed as it beat estimates for earnings but missed the same for sales. Higher sales of Dupixent and contribution from some new products were partially offset by the impact of Aubagio generic competition in the United States.
The company slightly increased its 2023 earnings growth expectations at CER, partly due to approximately €400 million expected to be generated from one-off COVID-19 vaccine revenues in the second half of the year.
Shares were down around 2.9% in pre-market trading due to the mixed results and probably due to softer Dupixent and Vaccine sales.
Sanofi’s stock has risen 10.5% year to date compared with the industry’s rise of 1.8%.
Image Source: Zacks Investment Research
Sanofi expects its new products, Beyfortus RSV vaccine, Altuviiio (hemophilia A), and Tzield (an innovative therapy for type 1 diabetes added from the April 2023 acquisition Provention Bio) to boost the company’s revenue growth, making up for the potential impact from generic competition on Aubagio.
A large drug stock worth considering is Novartis (NVS - Free Report) , which has a Zacks Rank of 2 (Buy).
Estimates for Novartis’ 2023 earnings per share have increased from $6.74 to $6.89 over the past 30 days. Estimates for 2024 have jumped from $7.28 per share to $7.45 in the same timeframe. Novartis’ stock has risen 14.4% so far this year.
Novartis beat earnings expectations in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 6.56%, on average.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Sanofi (SNY) Beats on Q2 Earnings, Misses Sales, Stock Down
Sanofi (SNY - Free Report) reported second-quarter 2023 adjusted earnings of 99 cents per American depositary share, which beat the Zacks Consensus Estimate of 88 cents. Earnings rose 0.6% on a reported basis and 8.1% on a constant currency rate (“CER”) basis.
Net sales declined 1.5% on a reported basis to $10.85 billion (€9.97 billion). Exchange rate movements hurt sales by 4.8 percentage points in the quarter. Sales rose 3.3% on a CER basis. Sales missed the Zacks Consensus Estimate of $11.47 billion.
Sales declined 1.7% at CER in the United States but rose 8.5% in the Rest of the World (including China, Japan, Brazil and Russia). In Europe, sales rose 3.8%.
All growth rates mentioned below are on a year-on-year basis and at CER.
Segment Performance
Sanofi’s Biopharma segment includes Global Business Units (GBUs) Specialty Care, General Medicine and Vaccines. Biopharma sales rose 3.7% in the quarter to €8.74 billion.
Sanofi Specialty Care GBU sales increased 11.8% to €4.4 billion, mainly driven by Dupixent and vaccines.
Dupixent generated sales of €2.56 billion in the quarter, up 34.2% year over year. Dupixent sales were less than our estimates of €2.62 billion.
Sales of the drug in the United States rose 33.2%, driven by strong demand for its approved indications, atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyposis indications, eosinophilic esophagitis and prurigo nodularis. In the United States, Dupixent’s new prescription share and total prescription share rose 53% and 32%, respectively.
Dupixent sales rose 30.1% in Europe and 44.5% in the Rest of the World, driven by sales in Japan and China.
Among the immunology and neurology medicines, Aubagio sales declined 58.2% to €216 million due to generic competition in the United States and Canada. Aubagio generics were launched in the United States in March 2023 while in Europe, generics are expected to be launched in the fourth quarter. Kevzara recorded sales of €92 million in the quarter, up 22.1%.
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.
Among the rare disease drugs, in the Pompe franchise, Myozyme sales declined 14.7% to €208 million due to patients switching to Nexviazyme. The new drug Nexviazyme/Nexviadzyme recorded sales of €103 million in the second quarter compared with €81 million in the previous quarter. Fabrazyme sales were €250 million, up 9.7% due to growth in all regions. In the Gaucher franchise, Cerezyme sales declined 0.5% to €181 million.
Newly launched rare disease drug Xenpozyme recorded sales of €20 million in the quarter compared with €18 million in the previous quarter, mainly driven by its uptake in Europe.
In Oncology, Sarclisa sales rose 53.1% to €94 million, reflecting growth in all three geographic regions. Jevtana’s sales declined 3.8% to €97 million due to the entry of generic competition in Europe and increased competitive pressure in the United States.
Among the rare blood disorder drugs, Alprolix sales rose 7.8% to €135 million. Eloctate sales declined 12.4% to €30 million in the quarter due to patients switching to the new drug Altuviiio. New drug Enjaymo recorded sales of €17 million in the quarter compared with €16 million in the previous quarter.
Sanofi’s newest rare blood disorder drug, Altuviiio, a once-weekly new class of factor VIII therapy for hemophilia A, was launched at the end of March in the United States. The drug recorded sales of €18 million in the second quarter.
Sales in General Medicines GBU declined 7.3% to €3.11 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). Sales in General Medicines missed our estimates of €3.41 billion.
Lantus sales decreased 36.5% to €353 million in the quarter. Toujeo generated sales of €291 million in the reported quarter, up 15.4% year over year. Lovenox sales declined 11.3% to €284 million. Aprovel sales declined 9.2% to €104.0 million. Praluent sales declined 26.6% to €91 million.
Vaccines GBU sales rose 9.1% to €1.22 billion in the quarter, mainly due to higher sales of Polio/Pertussis/Hib (PPH) vaccines and remaining contractual shipments of VidPrevtyn Beta, Sanofi’s recombinant COVID-19 booster vaccine, in Europe and United Kingdom. Total vaccine sales were in line with our estimates.
While sales of flu vaccines declined 10.4%, sales of PPH vaccines rose 12.4% in the quarter. Sales of meningitis, travel and other endemic vaccines declined 5.7% in the quarter. Booster vaccine sales rose 0.7% in the quarter.
In July, the FDA approved Sanofi and partner AstraZeneca’s (AZN - Free Report) respiratory syncytial virus (“RSV”) antibody Beyfortus (nirsevimab) to protect newborns and infants. AstraZeneca/Sanofi expect to launch Beyfortus in the country ahead of the upcoming 2023/2024 RSV season.
The Consumer Healthcare (CHC) standalone unit generated sales of €1.22 billion, up 0.7%, supported by growth in Europe and Rest of World region.
Costs Rise
Business selling, general and administrative expenses rose 3.9% at CER in the quarter on increased investments in Specialty Care and Vaccines and further investments in CHC. Business research and development expenses increased 0.4% at CER due to higher investments in Specialty Care and Vaccines.
2023 Guidance
Sanofi expects adjusted earnings to grow at a mid-single-digit at CER, up from the prior expectation of a low single-digit range at CER in 2023. It anticipates a negative currency impact in the range of 6.5%-7.5% on earnings versus the prior expectation of 5.5%-6.5%
Our Take
Sanofi’s quarterly results were mixed as it beat estimates for earnings but missed the same for sales. Higher sales of Dupixent and contribution from some new products were partially offset by the impact of Aubagio generic competition in the United States.
The company slightly increased its 2023 earnings growth expectations at CER, partly due to approximately €400 million expected to be generated from one-off COVID-19 vaccine revenues in the second half of the year.
Shares were down around 2.9% in pre-market trading due to the mixed results and probably due to softer Dupixent and Vaccine sales.
Sanofi’s stock has risen 10.5% year to date compared with the industry’s rise of 1.8%.
Image Source: Zacks Investment Research
Sanofi expects its new products, Beyfortus RSV vaccine, Altuviiio (hemophilia A), and Tzield (an innovative therapy for type 1 diabetes added from the April 2023 acquisition Provention Bio) to boost the company’s revenue growth, making up for the potential impact from generic competition on Aubagio.
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.
Stock to Consider
A large drug stock worth considering is Novartis (NVS - Free Report) , which has a Zacks Rank of 2 (Buy).
Estimates for Novartis’ 2023 earnings per share have increased from $6.74 to $6.89 over the past 30 days. Estimates for 2024 have jumped from $7.28 per share to $7.45 in the same timeframe. Novartis’ stock has risen 14.4% so far this year.
Novartis beat earnings expectations in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 6.56%, on average.