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Sanofi (SNY) Misses on Q4 Earnings and Sales, Stock Down
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Sanofi (SNY - Free Report) reported fourth-quarter 2023 adjusted earnings of 89 cents per American depositary share, which missed the Zacks Consensus Estimate of 94 cents per share. Earnings declined 2.9% on a reported basis but rose 8.2% on a constant currency rate (“CER”) basis.
Net sales rose 1.8% on a reported basis to $10.92 billion (€11.74 billion). Exchange rate movements hurt sales by 7.5 percentage points in the quarter. Sales rose 9.3% on a CER basis. Sales missed the Zacks Consensus Estimate of $13.02 billion.
Sales rose 10.1% at CER in the United States, 14.7% in the Rest of the World (including China, Japan, Brazil and Russia) and 0.6% in Europe.
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 9.4% in the quarter to €9.70 billion.
Sanofi Specialty Care GBU sales increased 13.7% to €4.71 billion, mainly driven by Dupixent and new products like Altuviiio and Beyfortus. Specialty Care GBU sales, however, missed our estimates of €4.99 billion.
Dupixent generated sales of €2.99 billion in the quarter, up 31.3% year over year. Dupixent sales missed our estimate of €3.21 billion.
Sales of the drug in the United States rose 28.2%, 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 24% and 30%, respectively.
Dupixent sales rose 32.5% in Europe and 52.5% in the Rest of the World, driven mainly by sales in Japan and China.
Among the immunology and neurology medicines, Aubagio sales declined 74% to €121 million due to generic competition in the United States and Europe. Aubagio generics were launched in the United States in March 2023, while in Europe, generics were launched in September. Kevzara recorded sales of €105 million in the quarter, up 41.8%.
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 20.4% to €160 million due to patients switching to Nexviazyme. The new drug Nexviazyme/Nexviadzyme recorded sales of €131 million in the fourth quarter compared with €110 million in the previous quarter, driven by conversion from Myozyme and new patient accruals. Fabrazyme sales were €242 million, up 9.2% due to strong new patient accruals across all regions. In the Gaucher franchise, Cerezyme sales rose 5% to €134 million.
Newly launched rare disease drug Xenpozyme recorded sales of €26 million in the quarter compared with €27 million in the previous quarter.
In Oncology, Sarclisa sales rose 30.2% to €103 million. Jevtana’s sales declined 5.7% to €77 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 6.4% to €142 million. Eloctate sales declined 21.0% to €103 million in the quarter due to patients switching to the new drug Altuviiio.
Sanofi’s newest rare blood disorder drug, Altuviiio, a once-weekly new class of factor VIII therapy for hemophilia A, recorded sales of €94 million in the fourth quarter compared with €46 million in the previous quarter. Altuviiio was launched in the United States in March 2023 and in Japan in the fourth quarter.
Another new drug Enjaymo recorded sales of €23 million in the quarter compared with €16 million in the previous quarter.
Cablivi (caplacizumab), for the treatment of a rare blood disorder called acquired thrombotic thrombocytopenic purpura, recorded sales of €58 million, down 3.2% year over year.
Sales in General Medicines GBU declined 2.4% to €3.0 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 estimate of €3.08 billion.
Vaccines GBU sales rose 21.1% to €1.99 billion in the quarter on strong uptake of new respiratory syncytial virus (“RSV”) vaccine, Beyfortus. The vaccine’s sales were partially offset by lower sales of flu vaccines. Total vaccine sales missed our estimate of €2.31 billion.
While sales of flu vaccines declined 4.0%, sales of PPH vaccines rose 3.4% in the quarter. Sales of meningitis, travel and other endemic vaccines rose 10.4% in the quarter. Booster vaccine sales declined 1.4% in the quarter.
Sanofi and partner AstraZeneca’s (AZN - Free Report) RSV antibody Beyfortus (nirsevimab) recorded sales of €410 million in the fourth quarter compared with €137 million in the previous quarter. AstraZeneca-partnered Beyfortus was launched in the United States and Europe for preventing RSV-related lower respiratory tract disease in newborns and infants in September 2023. The higher sales reflected the strong uptake of the new vaccine due to progressive infant protection programs implemented in the United States, Spain and France.
The Consumer Healthcare (CHC) standalone unit generated sales of €1.22 billion, up 8.5%, supported by Digestive Wellness and Physical and Mental Wellness products, which benefited from the Qunol acquisition.
In October, Sanofi announced that it intends to separate the CHC unit through the creation of a publicly listed entity headquartered in Paris. The separation is not expected to happen before the fourth quarter of 2024.
2024 Guidance Retained
Sanofi provided a preliminary view for 2024, along with the third-quarter 2023 results in October 2023. It maintained the guidance range along with the fourth-quarter release.
In 2024, Sanofi expects to increase its R&D spending from the 2023 level, mainly due to investment in mid- to late-stage programs in immunology, multiple sclerosis and vaccines.
The effective tax rate is also expected to increase from around 19% in 2023 to 21% in 2024 due to changes in global tax regulations. Including the impact of increased R&D spending and a higher tax rate, adjusted earnings are expected to decline in the low single-digit range at CER in 2024. Excluding the impact of the increased tax rate, adjusted earnings are expected to remain roughly stable. Sanofi anticipates a negative currency impact in the range of 3.5%-4.5% on adjusted earnings.
The company announced that it is increasing its annual dividend by 5.6% to €3.76 per share.
Our Take
Sanofi’s quarterly results were weak as it missed estimates for earnings as well as sales. Higher sales of Dupixent and contributions from new products like AstraZeneca-partnered Beyfortus and Altuviiio were partially offset by the impact of generic competition on Aubagio sales in all key markets and lower sales from mature products in the General Medicines segment. Vaccine sales improved from the decline seen in the third quarter mainly as a result of the strong uptake of Beyfortus.
The company maintained its 2024 earnings growth expectations at CER. It expects profits to decline in 2024 due to higher R&D costs and taxes. The company earlier said it expects profits to improve in 2025.
Shares were down 1% in pre-market trading on Thursday due to the earnings and sales miss. Sanofi’s stock has risen 2.4% in the past year compared with the industry’s rise of 20.0%.
Image Source: Zacks Investment Research
Going forward, Sanofi expects its three new products launched/added in 2023, Beyfortus RSV vaccine, Altuviiio and Tzield (an innovative therapy for type 1 diabetes added from the April 2023 acquisition Provention Bio) to boost revenue growth, making up for the potential impact from generic competition on Aubagio. Sanofi believes together these three products can add up to at least €5 billion in peak sales.
Sanofi’s R&D pipeline is also strong and it claims it has 12 potential blockbusters in late-stage development, including amlitelimab, frexalimaband tolebrutinib.
Estimates for Novo Nordisk’s 2024 earnings per share have increased from $3.30 to $3.32 over the past 60 days. NVO’s stock has surged 65.1% in the past year.
Earnings of Novo Nordisk beat estimates in two of the last four quarters, missed in one and matched estimates in one, delivering an earnings surprise of 0.58% on average.
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Sanofi (SNY) Misses on Q4 Earnings and Sales, Stock Down
Sanofi (SNY - Free Report) reported fourth-quarter 2023 adjusted earnings of 89 cents per American depositary share, which missed the Zacks Consensus Estimate of 94 cents per share. Earnings declined 2.9% on a reported basis but rose 8.2% on a constant currency rate (“CER”) basis.
Net sales rose 1.8% on a reported basis to $10.92 billion (€11.74 billion). Exchange rate movements hurt sales by 7.5 percentage points in the quarter. Sales rose 9.3% on a CER basis. Sales missed the Zacks Consensus Estimate of $13.02 billion.
Sales rose 10.1% at CER in the United States, 14.7% in the Rest of the World (including China, Japan, Brazil and Russia) and 0.6% in Europe.
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 9.4% in the quarter to €9.70 billion.
Sanofi Specialty Care GBU sales increased 13.7% to €4.71 billion, mainly driven by Dupixent and new products like Altuviiio and Beyfortus. Specialty Care GBU sales, however, missed our estimates of €4.99 billion.
Dupixent generated sales of €2.99 billion in the quarter, up 31.3% year over year. Dupixent sales missed our estimate of €3.21 billion.
Sales of the drug in the United States rose 28.2%, 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 24% and 30%, respectively.
Dupixent sales rose 32.5% in Europe and 52.5% in the Rest of the World, driven mainly by sales in Japan and China.
Among the immunology and neurology medicines, Aubagio sales declined 74% to €121 million due to generic competition in the United States and Europe. Aubagio generics were launched in the United States in March 2023, while in Europe, generics were launched in September. Kevzara recorded sales of €105 million in the quarter, up 41.8%.
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 20.4% to €160 million due to patients switching to Nexviazyme. The new drug Nexviazyme/Nexviadzyme recorded sales of €131 million in the fourth quarter compared with €110 million in the previous quarter, driven by conversion from Myozyme and new patient accruals. Fabrazyme sales were €242 million, up 9.2% due to strong new patient accruals across all regions. In the Gaucher franchise, Cerezyme sales rose 5% to €134 million.
Newly launched rare disease drug Xenpozyme recorded sales of €26 million in the quarter compared with €27 million in the previous quarter.
In Oncology, Sarclisa sales rose 30.2% to €103 million. Jevtana’s sales declined 5.7% to €77 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 6.4% to €142 million. Eloctate sales declined 21.0% to €103 million in the quarter due to patients switching to the new drug Altuviiio.
Sanofi’s newest rare blood disorder drug, Altuviiio, a once-weekly new class of factor VIII therapy for hemophilia A, recorded sales of €94 million in the fourth quarter compared with €46 million in the previous quarter. Altuviiio was launched in the United States in March 2023 and in Japan in the fourth quarter.
Another new drug Enjaymo recorded sales of €23 million in the quarter compared with €16 million in the previous quarter.
Cablivi (caplacizumab), for the treatment of a rare blood disorder called acquired thrombotic thrombocytopenic purpura, recorded sales of €58 million, down 3.2% year over year.
Sales in General Medicines GBU declined 2.4% to €3.0 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 estimate of €3.08 billion.
Vaccines GBU sales rose 21.1% to €1.99 billion in the quarter on strong uptake of new respiratory syncytial virus (“RSV”) vaccine, Beyfortus. The vaccine’s sales were partially offset by lower sales of flu vaccines. Total vaccine sales missed our estimate of €2.31 billion.
While sales of flu vaccines declined 4.0%, sales of PPH vaccines rose 3.4% in the quarter. Sales of meningitis, travel and other endemic vaccines rose 10.4% in the quarter. Booster vaccine sales declined 1.4% in the quarter.
Sanofi and partner AstraZeneca’s (AZN - Free Report) RSV antibody Beyfortus (nirsevimab) recorded sales of €410 million in the fourth quarter compared with €137 million in the previous quarter. AstraZeneca-partnered Beyfortus was launched in the United States and Europe for preventing RSV-related lower respiratory tract disease in newborns and infants in September 2023. The higher sales reflected the strong uptake of the new vaccine due to progressive infant protection programs implemented in the United States, Spain and France.
The Consumer Healthcare (CHC) standalone unit generated sales of €1.22 billion, up 8.5%, supported by Digestive Wellness and Physical and Mental Wellness products, which benefited from the Qunol acquisition.
In October, Sanofi announced that it intends to separate the CHC unit through the creation of a publicly listed entity headquartered in Paris. The separation is not expected to happen before the fourth quarter of 2024.
2024 Guidance Retained
Sanofi provided a preliminary view for 2024, along with the third-quarter 2023 results in October 2023. It maintained the guidance range along with the fourth-quarter release.
In 2024, Sanofi expects to increase its R&D spending from the 2023 level, mainly due to investment in mid- to late-stage programs in immunology, multiple sclerosis and vaccines.
The effective tax rate is also expected to increase from around 19% in 2023 to 21% in 2024 due to changes in global tax regulations. Including the impact of increased R&D spending and a higher tax rate, adjusted earnings are expected to decline in the low single-digit range at CER in 2024. Excluding the impact of the increased tax rate, adjusted earnings are expected to remain roughly stable. Sanofi anticipates a negative currency impact in the range of 3.5%-4.5% on adjusted earnings.
The company announced that it is increasing its annual dividend by 5.6% to €3.76 per share.
Our Take
Sanofi’s quarterly results were weak as it missed estimates for earnings as well as sales. Higher sales of Dupixent and contributions from new products like AstraZeneca-partnered Beyfortus and Altuviiio were partially offset by the impact of generic competition on Aubagio sales in all key markets and lower sales from mature products in the General Medicines segment. Vaccine sales improved from the decline seen in the third quarter mainly as a result of the strong uptake of Beyfortus.
The company maintained its 2024 earnings growth expectations at CER. It expects profits to decline in 2024 due to higher R&D costs and taxes. The company earlier said it expects profits to improve in 2025.
Shares were down 1% in pre-market trading on Thursday due to the earnings and sales miss. Sanofi’s stock has risen 2.4% in the past year compared with the industry’s rise of 20.0%.
Image Source: Zacks Investment Research
Going forward, Sanofi expects its three new products launched/added in 2023, Beyfortus RSV vaccine, Altuviiio and Tzield (an innovative therapy for type 1 diabetes added from the April 2023 acquisition Provention Bio) to boost revenue growth, making up for the potential impact from generic competition on Aubagio. Sanofi believes together these three products can add up to at least €5 billion in peak sales.
Sanofi’s R&D pipeline is also strong and it claims it has 12 potential blockbusters in late-stage development, including amlitelimab, frexalimaband tolebrutinib.
Zacks Rank & Stock to Consider
Sanofi currently has a Zacks Rank #3 (Hold).
Sanofi Price and Consensus
Sanofi price-consensus-chart | Sanofi Quote
A better-ranked large drugmaker worth considering is Novo Nordisk (NVO - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Novo Nordisk’s 2024 earnings per share have increased from $3.30 to $3.32 over the past 60 days. NVO’s stock has surged 65.1% in the past year.
Earnings of Novo Nordisk beat estimates in two of the last four quarters, missed in one and matched estimates in one, delivering an earnings surprise of 0.58% on average.