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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.
Companies: Sanofi (SAN:EPA)Sanofi (SAN:PAR)
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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Weekly round-up of AIM-listed healthcare news.
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Companies: Futura Medical plc
Full-year results were in line with the preliminary guidance issued in early 2022. Feraccru revenues in Europe increased with a 60% increase in volumes and the US commercialisation of Accrufer continues, with broader insurance coverage (100m lives covered). As with many small cap companies, access to growth capital is currently difficult; however, the group has raised a $10m loan from a major shareholder providing a cash runway till end-2022. Our assumption is that further funding comes from deb
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Trading continues to track ahead of expectations, which have been upgraded twice so far YTD. There is clear evidence the growth strategy is bearing fruit. Distribution gains are increasing brand reach both in the UK and overseas. This appears to be an ideal time for its on-trend value-for-money proposition to gain traction, potentially with counter-cyclical characteristics as consumers start trading down. After the recent pull-back, valuation is undemanding for a 3-yr EPS CAGR of 13% with risk p
Singer Capital Markets
OptiBiotix has reported final results for the year to December 2021, with revenues growing 45% to £2.2m and the EBITDA loss increasing to £1.0m, reflecting the increased investment in the business. Post-period end, OptiBiotix has continued to return value to shareholders through the successful spin-out and listing of its ProBiotix Health division. Future growth of the company is supported by commercial agreements with large partners and a substantial pipeline of opportunities through its 2nd gen
Companies: OptiBiotix Health PLC
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Belluscura has announced the launch of the next generation X-PLOR portable oxygen concentrator and expanded distribution through a D2C offering and partnership distribution plan for smaller DMEs.
Companies: Belluscura PLC
Dish of the day
Visum Technologies has joined the AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators).
No Leavers Today.
What’s cooking in the IPO kitchen?
Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Compan
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Companies: Oxford BioDynamics PLC
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Tungsten Corp and Sensyne Health have both left AIM. Hibernia REIT has left the Main Market.
What’s cooking in the IPO kitchen?
Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June.
LifeSafe Holdings, a fi
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An update from CVS this morning covering conclusion of the CMA process, a further acquisition and update on trading. The CMA investigation into the acquisition of Quality Pet Care (QPC) is now complete, thereby bringing to an end a 9 month process. As part of the undertaking, CVS yesterday completed the sale of QPC for cash proceeds of c.£9m, implying a c.£12m impairment. Whilst the CMA episode has clearly been a setback, it does not seem to have fundamentally impaired ongoing M&A ambitions give
Companies: CVS Group plc
The strong momentum from Q4-21 has continued into H1-22, with revenues expected to be up by more than 22% YoY. The outlook remains positive supported by strong industry demand and market share gains in the UK, where the group’s sustainability and affordability credentials are increasingly resonating. Whilst some macro pressures remain, these look to be manageable. We therefore make no change to our forecasts at this stage, but are highly encouraged by current trends and remain optimistic for the
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Companies: SourceBio International Plc
A positive AGM update confirms strong revenue growth has continued YTD and further margin improvement means management again expect EBITDA to be materially ahead of expectations. The business model is now settled, with additional distributors appointed in the US which should help drive further penetration into the Primary Care market there. China revenues were strong and with no sign yet of any slowdown, despite being cognisant of renewed lockdowns there. Gross margins have remained robust on po
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