Sanofi Net Income Off 26 Percent In Second Quarter

Q2 2018	*Change*	Change at CER	H1 2018	*Change*	Change at CER
IFRS net sales reported	€8,176m	-5.7%	+0.1%	€16,074m	-7.2%	-0.1%
IFRS net income reported	€762m	-26.2%	–	€1,778m	-73.6%⁽²⁾	–
IFRS EPS reported	€0.61	-25.6%	–	€1.42	-73,4%⁽²⁾	–
Business net income⁽¹⁾	€1,558m	-7.9%	+0.4%	€3,156m	-9.4%	+0.4%
Business EPS⁽¹⁾	€1.25	-6.7%	+1.5%	€2.53	-8.3%	+1.4%

Sanofi reported that net sales were €8,176 million, down 5.7 percent on a reported basis, up 0.1percent⁽³⁾ at constant exchange rates (CER) and down 2.5 percent at CER/CS⁽⁴⁾.

Sanofi Genzyme sales up 14.1 percent at CER/CS⁽⁴⁾ (33.1 percent at CER) driven by Dupixent and consolidation of Bioverativ. Vaccines sales were down 15.7 percent reflecting high basis for comparison and expected Pentaxim supply constraint in China.

Consumer Health Care (CHC) sales increased 4.1 percent supported by growth in Europe and Emerging Markets⁽⁵⁾. Diabetes and Cardiovascular⁽⁶⁾(DCV) Global Business Unit (GBU) sales were down 15.6 percent; global Diabetes franchise sales declined 11.9 percent, confirming an expected trend for the year, according to the company. Emerging Markets sales⁽⁵⁾ increased 5.2 percent with double-digit growth in China.

“In the second quarter, we achieved significant milestones in building our new Rare Blood Disorder franchise and the successful continued execution of the global roll-out of Dupixent,” Olivier Brandicourt, Sanofi chief executive officer, commented regarding the 2Q results. “As the impact from the U.S. losses of exclusivity peaked in the second quarter, the growth of our diversified businesses largely compensated for these headwinds. We look forward to entering a new growth phase led by our increasing focus on Specialty Care and our leadership positions in Emerging Markets and Vaccines.”

2018 business earnings per share (EPS) guidance narrowed

Second-quarter 2018 business EPS⁽¹⁾ up 1.5 percent at CER to €1.25.
Second-quarter 2018 International Financial Reporting Standards (IFRS) EPS was €0.61 (-25.6%).
Business EPS⁽¹⁾ in 2018 now expected to grow 3 percent to 5 percent at CER⁽⁷⁾ barring unforeseen major adverse events.
Currency impact on 2018 business EPS is estimated to be around -6 percent applying the average July exchange rates.

Key achievements in sustaining innovation in R&D

Sanofi completed the acquisition of Ablynx in May, internalizing the innovative Nanobody platform.
Positive CHMP recommendation for Cablivi for aTTP⁽⁸⁾.
Phase 1/2a data on BIVV001, an extended factor VIII therapy, demonstrated half-life of 37 hours.
A phase 2/3 study is being initiated on venglustat, an oral glucosylceramide synthase (GCS) inhibitor, in ADPKD⁽⁹⁾.
Positive phase 3 trial evaluating Dupixent to treat moderate-to-severe atopic dermatitis in adolescents.
Priority review granted in the U.S. to cemiplimab for the treatment of CSCC⁽¹⁰⁾.
Zynquista (sotagliflozin) accepted for review by the FDA in type 1 diabetes.
Praluent ODYSSEY OUTCOMES results submitted to the FDA and EMA in Q2.

For the complete Sanofi 2Q 2018 earnings press release, click here.
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References:

⁽¹⁾ In order to facilitate an understanding of operational performance, Sanofi comments on the business net income statement. Business net income is a non-GAAP financial measure.
⁽²⁾ Excluding Animal Health gain on disposal, first-half IFRS net income was down 22.6 percent and first-half IFRS EPS was down 22.4 percent
⁽³⁾ Changes in net sales are expressed at constant exchange rates (CER) unless otherwise indicated
⁽⁴⁾ Constant Structure: Adjusted for Bioverativ acquisition
⁽⁵⁾ In June, the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) recommended approval of Cablivi (caplacizumab) in the European Union for the treatment of adults experiencing an episode of acquired thrombotic thrombocytopenic purpura (aTTP), a rare blood-clotting disorder. Cablivi was developed by Ablynx, a Sanofi Company.
⁽⁶⁾ DCV: Diabetes and Cardiovascular
⁽⁷⁾ 2017 business EPS was €5.52
⁽⁸⁾ Acquired thrombotic thrombocytopenic purpura
⁽⁹⁾ Autosomal Dominant Polycystic Kidney Disease
⁽¹⁰⁾ Cutaneous Squamous Cell Carcinoma