GuruFocus -
- Total Q3 Sales: EUR13.4 billion, a 16% increase in CER.
- Dupixent Sales: Close to EUR3.5 billion in the quarter.
- Vaccines Business Growth: 26% increase.
- Pharma Launches Sales Increase: 67% growth.
- Opella Growth: 8% growth driven by strategic acquisition.
- Gross Margin Improvement: Increased by a full percentage point.
- Business Operating Income Increase: 19.9% in the quarter.
- Business EPS Increase: 17.6% in Q3.
- R&D Expenses: Higher, aligned with a committed increase for 2024.
- SG&A Growth: Substantially less than sales growth.
- Beyfortus Sales Projection: Expected to reach around EUR1.5 billion in 2024.
- Flu Sales Projection: Expected to decline by a low-single digit percentage for the full year.
- Insulin Franchise Sales: Stabilizing, with Lantus showing resilience.
- Divestments Impact: Expected to reduce sales by about EUR300 million in 2024.
- Capital Gains from Divestments: Expected to be around EUR400 million in biopharma only.
- Opella Valuation: EUR16 billion EV, 14 times 2024 estimated EBITDA.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sanofi (EPA:SASY) SA (NASDAQ:SNY) reported a strong sales performance with Q3 sales reaching EUR13.4 billion, marking a 16% increase in constant exchange rates.
- Dupixent achieved significant growth, reaching close to EUR3.5 billion in the quarter, driven by global volume growth across all indications and geographies.
- The vaccines business grew by 26%, benefiting from phasing in flu and bake order sales, with the global rollout of Bayport contributing strongly.
- Sanofi SA (NASDAQ:SNY) raised its business EPS guidance for 2024, reflecting continued momentum and commitment to delivering value to stakeholders.
- The company achieved positive Phase 3 readouts in Bullous pemphigoid and chronic spontaneous urticaria, creating additional near-term growth opportunities.
- Sanofi SA (NASDAQ:SNY) faces substantial risks and uncertainties with forward-looking statements that may cause actual results to differ materially.
- The company anticipates a decline in gross margin in Q4 and for the full year due to one-offs last year such as COVID revenues and Aubagio sales.
- There is a projected decline in flu sales by a low-single digit percentage due to a soft vaccination rate, despite gaining market share.
- Sanofi SA (NASDAQ:SNY) expects divestments to reduce sales by about EUR300 million in 2024.
- The company is facing increased tax rates in France, which may impact overall tax expenses despite efforts to mitigate it globally.
A: Thomas Triomphe, Executive Vice President - Vaccines, explained that there is still significant room for monoclonal antibody penetration. The presence of more players is welcomed as it will expand the market. Sanofi is confident in Beyfortus' demonstrated efficacy and safety, and they look forward to highlighting differences between products in future discussions.
Q: Can you provide more details on the Opella deal and the expected proceeds?
A: Francois-Xavier Roger, CFO, stated that Sanofi expects to receive a high single-digit billion euro amount from the Opella deal, net of taxes and transaction costs, by Q2 2025. The proceeds will align with Sanofi's capital allocation policy, focusing on business investment and potential share buybacks.
Q: Could you provide early metrics on the Dupixent launch in COPD and thoughts on the launch curve?
A: Brian Foard, Head of Specialty Medicine, noted that it's early days for the COPD launch, but the feedback has been extremely positive. The market is excited due to the lack of innovation in COPD treatment over the past decade. Sanofi remains confident in its guidance for Dupixent's growth.
Q: What are the expectations for Beyfortus sales in 2025, especially with potential competition?
A: Thomas Triomphe confirmed that Beyfortus is expected to grow in 2025, regardless of competition. The focus remains on providing RSV protection for all infants, and the market is anticipated to expand with or without competitors.
Q: Can you discuss the potential impact of the Inflation Reduction Act (IRA) on Sanofi's business, particularly regarding Dupixent?
A: Brian Foard stated that Sanofi's innovative portfolio positions it well against IRA impacts. The company does not foresee meaningful effects on pricing provisions and remains confident in its growth targets for Dupixent, supported by strong underlying demand and strategic payer negotiations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.