Yahoo Finance Sanofi (SNY) Q1 Earnings In Line, Sales Miss Estimates, Stock Up
Sanofi SNY reported first-quarter 2024 adjusted earnings of 96 cents per American depositary share, in line with the Zacks Consensus Estimate. Earnings of €1.78 per share declined 17.6% on a reported basis and 7.4% on a constant currency rate (“CER”) basis.
Net sales rose 2.4% on a reported basis to $11.35 billion (€10.46 billion). Exchange rate movements hurt sales by 4.3% in the quarter. Sales rose 6.7% on a CER basis. Sales missed the Zacks Consensus Estimate of $11.75 billion.
Sales rose 7.3% at CER in the United States and 13.8% in the Rest of the World (including China, Japan, Brazil and Russia) but declined 4% in Europe.
All growth rates mentioned below are on a year-on-year basis and at CER.
Segment Performance
Sanofi’s Biopharma segment includes Pharma and Vaccines. Biopharma sales rose 6.3% in the quarter to €8.94 billion.
Pharma sales increased 6.4% to €7.76 billion, mainly driven by Dupixent and new product launches.
Dupixent
Dupixent generated sales of €2.84 billion in the quarter, up 24.9% year over year.
Sales of the drug in the United States rose 16.8%, 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 22% and 25%, respectively. Dupixent sales and prescription trends in the United States were hurt by customary dynamics of the annual reset of insurance plans in the first quarter.
Dupixent sales rose 33.6% in Europe and 67.5% in the Rest of the World, driven mainly by sales in Japan and China.
Sanofi markets Dupixent in partnership with Regeneron REGN. While sales are recorded by Sanofi, Regeneron records its share of profits/losses in connection with global sales of Dupixent.
New Drugs
Among Sanofi’s newer drugs, rare blood disorder drug, Altuviiio, a once-weekly new class of factor VIII therapy for hemophilia A, recorded sales of €122 million in the first quarter of 2024 compared with €94 million in the previous quarter as the company captured patient share in the U.S. hemophilia A market and undertook geographic expansion. Altuviiio was launched in the United States in March 2023 and in Japan in the fourth quarter.
New rare disease drug, Nexviazyme/Nexviadzyme recorded sales of €152 million in the first compared with €131 million in the previous quarter, driven by conversion from Myozyme and new patient accruals.
New rare disease drug Xenpozyme recorded sales of €35 million in the quarter compared with €26 million in the previous quarter.
Enjaymo recorded sales of €29 million in the quarter compared with €23 million in the previous quarter.
Cablivi recorded sales of €59 million, up 3.4% year over year. Sarclisa sales rose 28.7% to €106 million.
Rezurock, approved for treating chronic graft-versus-host disease (cGVHD) and added from the 2021 acquisition of Kadmon, recorded sales of €93 million, up 40.3% year over year.
Tzield sales were €10 million in the first quarter, the same as in the previous quarter. Tzield, approved to delay the onset of type I diabetes, was added to Sanofi’s portfolio with the 2023 acquisition of Provention Bio.
Other Key Drugs
Among the immunology and neurology medicines, Aubagio sales declined 74.7% to €102 million due to generic competition in the United States and Europe.
In Diabetes, Toujeo recorded sales of €321, up 18% year over year, driven mainly by higher sales in China. Lantus sales declined 15.4% to €360 million.
Among the rare disease drugs in the Pompe franchise, Myozyme sales declined 13.6% to €191 million due to patients switching to Nexviazyme. Fabrazyme sales were €253 million, up 7.7%. In the Gaucher franchise, Cerezyme sales rose 23% to €214 million.
Among the rare blood disorder drugs, Eloctate sales declined 24.6% to €86 million in the quarter due to patients switching to the new drug Altuviiio.
Plavix sales increased 6.8% to €238 million. Lovenox sales decreased 13.9% to €262 million.
Vaccines
Vaccine sales rose 5.6% to €1.18 billion in the quarter as contributions from the new respiratory syncytial virus (“RSV”) vaccine, Beyfortus, were partially offset by lower sales of flu vaccines and the absence of COVID-19 vaccinesales in the quarter.
Sales of flu vaccines declined 38.1%. Sales of PPH vaccines declined 0.5% in the quarter. Sales of meningitis, travel and other endemic vaccines rose 7.7% in the quarter.
Sanofi and partner AstraZeneca’s AZN RSV antibody Beyfortus (nirsevimab) recorded sales of €182 million in the first 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.
Consumer Healthcare (CHC)
The CHC standalone unit generated sales of €1.53 billion, up 9%, supported by Digestive Wellness and Physical and Mental Wellness products, which benefited from the Qunol acquisition.
Last year, 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 maintained its previously issued guidance range.
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 5.5%-6.0% on adjusted earnings versus the prior expectation of 3.5%-4.5%.
Our Take
Sanofi missed estimates for sales but matched the same for earnings. Higher sales of Dupixent and contributions from new products like Altuviiio and Nexviazyme were partially offset by the impact of generic competition on Aubagio sales in all key markets and soft sales performance of the Vaccine segment. Sales in the first quarter of 2024 were also hurt by seasonal patient co-pay assistance program utilization associated with the annual resetting of insurance.
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. However, Sanofi expects business EPS growth to rebound in 2025, driven by improved sales growth and relatively stable R&D expenses year on year.
Sanofi’s shares rose almost 5% in pre-market trading on Thursday. Sanofi’s stock has declined 17.1% in the past year against the industry’s rise of 18.0%.
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Going forward, Sanofi expects its three new products launched/added in 2023, Beyfortus RSV vaccine, Altuviiio and Tzield, to boost revenue growth, making up for the potential impact from generic competition on Aubagio. Sanofi believes that these three products can add up to at least €5 billion in peak sales.
AstraZeneca also announced its earnings on Thursday. The company beat estimates for both earnings and sales. Its earnings and sales rose at a double-digit rate on a constant currency basis due to strong demand for its blockbuster medicines. AstraZeneca’s stock shot up by 5.2% in pre-market trading. AstraZeneca’s solid results could be a driver of Sanofi’s jump in pre-market trading on Thursday.
Zacks Rank & Stock to Consider
Sanofi currently has a Zacks Rank #4 (Sell).
Sanofi Price and Consensus
Sanofi price-consensus-chart | Sanofi Quote
A better-ranked biotech stock is ADMA Biologics ADMA, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share have improved from 22 cents to 30 cents. Estimates for 2025 have increased from 32 cents to 50 cents. In the past year, shares of ADMA Biologics have risen 95.8%.
Earnings of ADMA Biologics beat estimates in three of the last four quarters while meeting the same once. ADMA delivered a four-quarter average earnings surprise of 85.0%.
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