Despite pertinent pandemic pressures and tough comps (due to panic buying), Sanofi reported decent growth in Q1 21 – driven by robust growth in the Dupixent and vaccine business. Moreover, profitability improved further due to the cost initiatives measures in place. While pandemic-induced uncertainties are here to stay, the group should find support from new launches and label and geographic expansion of key drugs. Additionally, success in the COVID-19 vaccine development space could prove anoth
Companies: Sanofi (SAN:EPA)Sanofi (SAN:PAR)
Despite the COVID-19-related disruption, the CEO’s bet on Dupixent and Vaccines paid off in Q4. The boss has now taken a shot to revitalise the slow-growing Consumer-healthcare and General-medicine businesses, along with additional cost-saving of €500m by FY22 – these measures should help Sanofi achieve its FY25 profitability target. The bolt-on strategy will continue to strengthen the pipeline, along with a key focus on six multi-blockbuster drugs. A breakthrough in the COVID-19 vaccine space c
In line with its strategy of expanding its focus on the immuno-oncology space and strengthening its internal R&D pipeline, Sanofi has spent €5.2bn on the acquisition of two small biotech firms ytd. Given that the French pharma giant still has gun powder of €30-50bn, a big ticket acquisition is highly likely, with Alexion being a good strategic fit in our view. Bolt-on deals might also be on the cards and PTC Therapeutics, Inovio and Editas could be Sanofi’s hit list.
Q2 sales came under pressure due to de-stocking and lockdown-related disruptions across the segments, though the momentum was partly offset by a strong show in Dupixent. Combined with effective cost management, the operating margin expanded during the quarter. While a recovery to pre-COVID levels would take time, the rising risk of the second wave of Coronavirus and seasonal flu should ensure high demand for the high-margin Influenza vaccines in H2. Top this up with the COVID-19-related opportun
Sanofi’s MS partner Principia Biopharma (EV of $2.4bn) has been in the headlines as a potential takeover target. Given the French pharma’s swelling war chest and the strategic vision of the CEO, such rumours could have legs. In an attempt to increase its focus on innovative drugs, Sanofi has also started the divestment (through IPO) procedure of the world’s second-largest API company (valued at $2bn).
Sanofi is developing a COVID-19 vaccine based on the traditional/proven recombinant-platform technology. It has the capability to manufacture 1bn doses by the end of 2021. Also, the French firm has joined hands with Translate Bio to develop a candidate using a new, though unproven, mRNA-technology – if successful, 400m doses would be ready by the end of 2021. As governments across the globe try to achieve herd immunity for their citizens, pre-booking for COVID-19 vaccines have already started.
Q1 outperformance was fuelled by the stockpiling of drugs, particularly for chronic and generic medicines. While these pantry-loading benefits, mainly in the consumer healthcare segment, should fade away in Q2, robust demand for speciality care drugs, especially Dupixent, would ensure that FY20 financial targets are met. COVID-19-related opportunities – Sanofi is working on vaccines, diagnostics as well as short-term relief drugs – makes the French firm even more attractive and thus we reiterate
Despite being weighed down by the recall of Zantac, FY19 ended on a decent note on the back of strong traction for Dupixent and Vaccines. The outlook for FY20 is also encouraging as the new CEO places his bet on Dupixent and the growing oncology pipeline during the transition phase. Results of the phase II multiple sclerosis study bodes well for the mid-term. Nonetheless, the Bioverativ deal seems to have back-fired as Roche’s Hemlibra continues to gain strength.
Sanofi’s new CEO has identified dupixent and vaccines as the mid-term growth drivers, as the company moves away from slow-growing diabetes and cardiovascular therapeutic areas. Consumer Healthcare and other non-core assets should soon be up for sale and the proceeds could be diverted towards fast-growing therapeutic areas (it acquired an immune-oncology drug recently). With respect to profitability, the recently introduced €2bn cost savings programme holds the key. With a strategy now in place,
Q3 was in line and the robust performance in Speciality Care, particularly Dupixent, and Emerging Markets was offset by a dismal show in Vaccines and Consumer Healthcare. While Dupixent and China should continue to be the key growth drivers in the mid-term, we anticipate a recovery in Vaccines and Consumer Healthcare in the coming quarters. However, Oncology is still a question mark. We eagerly wait the new CEO’s first capital markets day in December 2019.
The cancer burden is growing globally. Each year >18 million people are diagnosed, nearly 10 million die and the estimated economic cost exceeds $1 trillion. From early diagnosis to late-stage disease, cancer care often involves inappropriate or unnecessary interventions that drive costs but provide limited clinical benefit. Coupled with an increased understanding of cancer biology and rapid technological advances, this has been driving momentum for precision medicine, leading to patient and soc
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Sanofi announced a mixed performance in Q2. While the operating results for the quarter were impressive and it upgraded the business EPS guidance, the Bioverative acquisition has shown to be a deal pursued in haste. An impairment charge of €1.8bn, mainly related to haemophilia drug, Eloctate, is being recorded. The specialty side (rare diseases, multiple sclerosis, etc.) and vaccines came in strongly, while consumer health remained mediocre and primary care (including diabetes, other mature drug
Sanofi reported top-line and bottom-line numbers ahead of our expectations, although the top-line lagged the street’s expectations. The sales growth of 4.2% at CER to €8.4bn was characterised by solid sales in speciality pharma and vaccines, while consumer healthcare (CHC) came in flat and primary pharma deteriorated. Emerging markets delivered a robust performance, followed by the US, while Europe entered into the year with a whimper. Management maintained its FY19 business-EPS growth expectati
Sanofi’s top-line performance for Q4 was weaker than expected, but profitability made up for the under-performance, along with a slightly better-than-expected outlook for 2019. Sales grew by 3.9% at CER and at 2.6% at CER/CS to €9bn, with the pharma business growing by 3% (CER/CS), consumer healthcare by 2%, and vaccine by 9.7%. Geographically, Europe (-4.8%) was a major disappointment, primarily due to generic erosion of the mature established drugs and a weak consumer health business.
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Astra kicked-off 2021 on a promising note, from both a sales and profitability perspective. Besides a healthy (though somewhat slower) performance for the lynchpin oncology portfolio, the strong growth in Farxiga (diabetes drug) was comforting. While the near term for the UK pharma giant could continue being hampered by the COVID-19 vaccine and Alexion deal terms-related uncertainties, a robust outlook for the core pharma business is encouraging and renders apt support to the stock recommendatio
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