Sanofi, the French pharmaceutical giant, released their third-quarter results on Friday. Here are the key highlights:
Sales Decline, but Positive Growth at Constant Exchange Rates
- Sales for the third quarter reached 11.96 billion euros ($12.63 billion), marking a 4.1% decrease compared to the same period last year.
- However, at constant exchange rates, sales actually increased by 3.2%.
- Despite falling slightly short of expectations at EUR12.06 billion, the results remained solid according to the consensus provided by the company.
Business Profit Declines
- Sanofi's quarterly business net profit, excluding exceptional items, stood at EUR3.20 billion, showing an 11% decrease compared to the previous year.
- Analysts anticipated a higher figure of EUR3.27 billion.
Focus on Consumer Healthcare Separation
- Sanofi intends to divide its consumer-healthcare business in order to emphasize its focus on innovative medicines.
- Different separation paths are under consideration, with the most probable option being a capital-markets transaction resulting in the creation of a listed entity based in France.
- Sanofi anticipates implementing this separation strategy in the earliest possible timeframe of the fourth quarter of next year, following market conditions and consultation with social partners.
Sanofi Plans Increased Investment in Research and Development
Sanofi, a leading pharmaceutical company, has announced its plans to ramp up investment in research and development to bolster its pipeline. In addition, the company is launching a cost-cutting program aimed at achieving EUR2 billion in savings over the next two years to fund these efforts.
However, as a result of increased tax rates and the investment in R&D, Sanofi anticipates a decline in its business earnings per share by low single digits in 2024 compared to 2023. Excluding the impact of tax changes, the company forecasts that its business EPS will remain relatively flat.
Despite facing challenges from generic competition for its relapsing-multiple-sclerosis drug Aubagio, Sanofi managed to offset the impact through the strong performance of its blockbuster Dupixent anti-inflammatory drug and hemophilia treatment Altuviiio. As a result, the company reported a notable 13.5% rise in specialty-care sales at constant currency. On the other hand, vaccine sales experienced a slight decline of 0.6% at constant currency, despite a successful launch of its Beyfortus injection for the prevention of respiratory syncytial virus (RSV).
Overall, Sanofi remains confident in its guidance for 2023, confirming mid-single digit growth in business EPS at constant exchange rates.
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