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In Q2, Sanofi continued its solid growth momentum driven by a strong showing from Dupixent and the Consumer Healthcare Business. Although, Vaccines’ growth came in slightly lower than the other segments, this is not a reason to worry considering the underlying strength of the business, especially the flu vaccine. Moreover, the sustained profitability improvement meant that the firm’s transformation journey remained on track. Hence, our positive outlook on the stock is maintained.
Companies: Sanofi (SAN:EPA)Sanofi (SAN:PAR)
Sanofi started 2022 on a good note, with solid growth being witnessed across the divisions. In Q1, Dupixent continued its good run, and was well-complemented by a recovering Consumer Healthcare business. While the individual Vaccines performance was slightly mixed, it remains well-poised to capitalize on recovering demand post the COVID-19 disruption. Overall, the firm’s transformation journey remains on track and, hence, our positive stock recommendation is maintained.
Sanofi’s 2021 ended on a strong note, with positive takeaways across divisions. While there were some transient challenges in Q4, it doesn’t impact the firm’s performance momentum – also reflecting in a promising 2022 outlook. Overall, the firm remains on track to deliver on its business (transformation) promises and, hence, our positive stock recommendation is reinforced.
Sanofi reported an excellent Q3, with all divisions supporting the strong top-line momentum. Moreover, better sales and tight control over operations aided profitability improvements and, hence, underpinned another full-year outlook upgrade. While Sanofi has been (very) late in its COVID-19 vaccine ambitions, the strong potential in most other areas remains intact and supports our positive stock recommendation.
Sanofi witnessed remarkable growth in Q2, with strong growth in the high-margin Dupixent and Vaccines business being complemented by the recovery in the consumer business. Moreover, the improving top-line and various cost control measures have led to a marked improvement in Q2 profitability, and thereby an upward revision to the full-year outlook. While resurfacing pandemic uncertainties may play spoilsport, additional catalysts in the form of the COVID-19 vaccine and Dupixent’s approval in newe
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
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.
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EKF has reported a strong H1, with revenues of £37.5m and double-digit growth in underlying non-Covid related business. Management reports it is trading in line with expectations for the full year and we make no change to our profit forecasts at this stage. New growth initiatives are proceeding to plan and should lead to accelerated core growth from FY23 onwards. We continue to see substantial upside on successful execution with the shares trading on an FY23 P/E of 13.1x and an EV/EBITDA of just
Companies: EKF Diagnostics Holdings plc
Singer Capital Markets
Kromek reported full-year results to 30 April that were in line with the trading update of 16 May. Record visibility over our FY 2023 revenue forecast of £18m (c.53% of which is already contracted and 37% “Awarded not Contracted”, with the balance from its normal monthly run rate) is a great start for FY 2023 on which the company can build further. We are leaving forecasts unchanged for the moment, despite additional contract wins, and expect to introduce FY 2024 forecasts at the time of its int
Companies: Kromek Group Plc
Kromek announced a £1.7m fundraise by way of the issue of convertible loan notes (8% coupon, 18-month conversion period at 15p per share), which will allow the company to minimise any potential supply-chain disruption to the delivery of contracts during the year. We make only minor changes to forecasts to reflect the additional interest (c.£0.1m) accrued, with adjusted pre-tax loss increasing to £5.0m. We leave our target valuation of £118m (27p) unchanged, with near-term catalysts (e.g. a secon
Ahead of its upcoming results, ECO has issued an update flagging an issue around a sales tax liability and the treatment of certain items of capitalised development, offset by a foreign exchange gain will result in it reporting FY22 Adj EBITDA of ~£6.5m vs SCMe £7.1m. It has also indicated trading in China has been difficult in Q1 FY23, particularly with the large producers, but margins have improved on mix. Trading in the Rest of the World has been strong YTD. Given the proximity to the results
Companies: ECO Animal Health Group plc
Companies: Omega Diagnostics Group PLC
Dish of the day
No joiners today.
No leavers today.
What’s cooking in the IPO kitchen?
Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a supplier of laminated steel tapes to the fibre optic cable industry in the US. Thixotropic gels and laminated steel tapes are essential components to the rapidly growing global fibre optic cable market. The Group export
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Companies: TIDE EXR FTC KMK PEB RBG ETP
Smith & Nephew reported mostly in-line Q2 22 numbers, missing the top-line estimates (-0.6%) but beating on the trading profit (+0.5%), albeit marginally.
The Q2 performance was overshadowed by a 100bp margin downgrade for FY22 (-50bps Y-o-Y vs +50bps previously), which sent the stock ~9% lower in the session following the update. The reiteration of the top-line growth outlook of 4-5% was no help either.
We will cut our estimates, largely to reflect the soft margin guidance.
Companies: Smith & Nephew PLC
Companies: PureTech Health PLC
Dish of the day
No joiners today.
Leavers: No leavers today.
What’s cooking in the IPO kitchen?**
Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a supplier of laminated steel tapes to the fibre optic cable industry in the US. Thixotropic gels and laminated steel tapes are essential components to the rapidly growing global fibre optic cable market. The Group exports
Companies: UJO FAB HAT HZM SYM TRAC
Companies: SourceBio International Plc
Belluscura has announced that it has entered into a Group Purchasing Organisation Product Supply Agreement with VGM Group which further expands its distribution network across the US.
Companies: Belluscura PLC
Companies: Argo Blockchain Plc (ARB:LON)Kromek Group Plc (KMK:LON)
Dish of the day
Inteliqo Limited has joined the Access Segment of AQSE Growth Market. Inteliqo Limited provides sales, marketing and distribution services to technology product owners.
Leavers: Menzies (John) plc and Sanne Group have left the Premium Segment of the Main Market.
What’s cooking in the IPO kitchen?**
Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a sup
Companies: INSE AEG ASTO BEG CGH FIPP KMK
For the year to 30 April 2022 Kromek reported results in line with the Trading Update of 16 May: revenue of £12.1m, +16.5%YoY, and an EBITDA (adj.) loss of £1.2m. We estimate revenue in the Advanced Imaging division grew 28% YoY to £4.6m, whilst the CBRN segment grew 1.5x to £5.4m.
Kromek reports that it expects growth to accelerate in both its core segments – security-related CBRN and advanced imaging – with the prospect of “a substantial year-on-year increase in revenue”. The CBRN segment in