(Bloomberg) -- Sanofi lifted its earnings forecast for the year after posting profit that topped estimates amid strong demand for blockbuster skin and asthma medicine Dupixent.
Earnings per share, excluding some items, will probably be stable this year at constant currencies, the Paris-based drugmaker said Thursday. The previous guidance was for a low single-digit percentage drop.
Second-quarter earnings reached €1.73 ($1.88) per share, ahead of analyst estimates, helped by Dupixent sales climbing to a quarterly record of €3.3 billion. Sanofi shares rose as much as 3.3% in early trading in Paris. The stock is up more than 7% since the start of the year.
Chief Executive Officer Paul Hudson has braced investors for slower growth this year as Sanofi ratchets up its drug-development program to create more top-sellers like Dupixent.
The company is following the strategy of rivals including Novartis AG in focusing on cutting-edge therapies, while divesting older medicines and its consumer health division. The idea is to sacrifice earnings now for faster growth later this decade.
Consumer Health
Sanofi expects to make a decision in the next few months about how it will separate its consumer health division, which it’s calling Opella, Chief Financial Officer Francois-Xavier Roger said on a call with reporters. The company is still considering all options, including a possible sale or a listing.
Investors are looking for early signs that Sanofi can make good on its promise to churn out innovative medicines faster than it has in the past. The company plans to publish 12 late-stage trial readouts through 2025, with many investors now focused on results for experimental multiple-sclerosis drug tolebrutinib.
That’s an encouraging sign of progress on the drug-pipeline front, which is probably more important for investors than the company’s improved financial performance, analysts John Murphy and Mila Bankovskaia of Bloomberg Intelligence said in a note.
Meanwhile, Sanofi expects Dupixent to gain clearance in September from US regulators for treating a chronic lung condition, and it’s prepared to start offering the medicine to people suffering from the ailment right away, Rogers said on the call with reporters. European regulators already approved Dupixent for the condition — chronic obstructive pulmonary disease — earlier this month.
For now, Sanofi is still expecting about €13 billion in sales from Dupixent this year.
Sanofi has spent months looking at options for selling the consumer-health unit, which makes over-the-counter products including Phytoxil cough syrups and Icy Hot pain relief gels.
Private equity firms Advent International and PAI Partners are among suitors that submitted first-round offers for the business, with some proposals valuing the unit at as much as €15 billion, Bloomberg News reported earlier this month.
(Updates to add shares in third paragraph.)
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