Feb 3, 2023
Sanofi Forecasts Slower Profit Growth Amid Generic Competition
(Bloomberg) -- Sanofi declined to the lowest in more than two months after the French drugmaker forecast a slowdown in profit growth as generic competition ratchets up for multiple sclerosis drug Aubagio.
Adjusted earnings per share are likely to grow at a low single-digit percentage, compared to 26% growth last year, the company said Friday. The shares fell as much as 5.2%.
Sanofi is bracing for challenges to its growth as its aging medicine Aubagio will face cheaper competition in the US this spring. While Dupixent, a treatment for asthma and skin ailments, continues to drive Sanofi’s growth, the French drugmaker will need to increase spending on marketing this year as it launches new products including Beyfortus for preventing RSV in kids and Altuviiio for hemophilia.
Analysts will probably cut their earnings forecasts for this year by 2% to 4%, wrote Peter Welford from Jefferies. Influenza vaccine revenue fell 32% in the fourth quarter, missing analysts’ expectations, wrote Emily Field, an analyst at Barclays.
Sanofi tends to publish a conservative outlook early in the year, often raising the forecast later, analysts said.
The stock erased some of its decline after Chief Financial Officer Jean-Baptiste de Chatillon said he expects “steady growth in the years to come,” especially because there won’t be any more big patent expirations. He spoke in a Bloomberg TV interview.
The drugmaker also forecast that Dupixent sales could top €10 billion ($10.9 billion) this year after its revenue soared 44% in 2022. Sanofi is expected to release data on Dupixent as a treatment for the COPD respiratory disease in the coming months.
CFO de Chatillon that could bring a “significant upside” to revenue from the drug.
What Bloomberg Intelligence Says:
“Sanofi’s low single-digit EPS guidance looks a touch lighter than MODL consensus — possibly due to currency assumptions — though likely reflects margin pressure from Aubagio (5% of 2022 sales) genericization, the expected launches of Altuviiio (hemophilia A) and Beyfortus (RSV), and a growing pipeline. We’d nevertheless caution that Sanofi tends to favor a conservative early year view, which is raised as the year progresses, with today’s target seemingly allowing for that.” —John Murphy, BI pharma analyst
Sanofi Conservative 2023 Guidance Leaves Upgrade Scope: React
--With assistance from Lisa Pham and Francine Lacqua.
(Updates to lead on shares)
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