Sanofi (SNY.US) Q3 profit surpassed expectations, Dupixent's strong demand is hard to hide concerns over the patent cliff
Zhitong Finance App learned that due to increased demand for its best-selling skin and asthma drug Dupixent (dupriumab), Sanofi raised its full-year sales and profit expectations for the second consecutive quarter. The French pharmaceutical company said on Friday that at a fixed exchange rate, sales are expected to achieve a low double-digit percentage increase this year, higher than the 10% previously forecast; earnings per share after excluding some projects are expected to increase by a medium double digit percentage.
According to the data, Sanofi's net sales for the third quarter were 14.444 billion euros, up 16.2% year on year, and 14.3% at a fixed exchange rate. Among them, Dupixent's sales reached 5.7 billion euros (about 6.4 billion US dollars), a sharp increase of 34.8% year over year, breaking 5 billion euros for the second time in history, which is also higher than analysts' expectations of 5.2 billion euros, driving profits beyond expectations. Earnings per share after excluding some items were €3.55, far higher than analysts' expectations of €2.80.
Dupixent's strong performance offset the decline in vaccine sales. Vaccine business performance is weak as influenza vaccines and respiratory syncytial virus (RSV) drug Beyfortus are under pressure in the US market. Furthermore, Sanofi's expenses on expenses related to drug sales and promotion were lower than expected.
Highly dependent on a single drug, the “post-Dupixent era” became the focus
However, Dupixent's sales performance also highlights Sanofi's deep dependence on this drug. The drug will begin to lose patent protection in the early 2030s, and Sanofi has yet to find a credible alternative revenue stream. Dupixent was jointly developed by Sanofi and Regeneron Pharmaceuticals (Regeneron Pharmaceuticals).
New CEO Belén Garijo (Belén Garijo) said in a statement: “The entire organization is focused on managing Sanofi's development trajectory in the 'post-Dupixent era' over the next ten years. Our priority is to protect profits through the expiration of Dupixent's patents.”
Bai Li'an has stopped research and development of a number of drugs that she believes have poor prospects, and plans to build a more strict R&D pipeline. She also replaced Houman Ashrafian, head of R&D, and was replaced by former Roche executive Paulo Fontoura.
Investors await major acquisitions, and new drugs begin to contribute to growth
Investors are awaiting a major acquisition. The target is likely to be an asset in a late-stage development stage to be introduced to the market in a timely manner to offset some of Dupixent's sales losses. Earlier this year, Sanofi and Regenerative said they would expand their partnership, and the deal could give the US pharmaceutical company as much as $8 billion.
Chief Financial Officer François-Xavier Roger said that the sales contribution of newly launched products is higher than before. Sales of Altuviiio, a new drug used to treat type A hemophilia, and Rezurock, a drug for chronic graft-versus-host disease, both exceeded expectations in the last quarter.
Roger also said that Sanofi is looking for a larger deal than before, and the main risk of the target is commercialization. “The amount of capital involved is larger than what we have sought in the past,” he said during a press call.
Roger said Sanofi expects to update its strategic priorities before the end of the year.
Concerns about growth prospects have dragged down Sanofi's stock price, which has fallen about 8% since this year. Previous clinical trial results have been disappointing, including an experimental drug for atopic dermatitis called amlitelimab and a drug to treat rare autoimmune diseases.