Sanofi Reports Lower Q2 Earnings, But Lifts 2023 Outlook On New Drug Launches

Sanofi SA SNY reported a 1% decline in Q2 business operating income of €2.73 billion. Business EPS of €1.74, up 0.6% on a reported basis and 8.1% at CER.

Revenues increased €9.96 billion, down 1.5% and up 3.3% at constant currency.

Specialty Care grew 11.8% to €4.4 billion, driven by Dupixent (€2.56 billion, +34.2%) and Nexviazyme (€103 million, +146.5%), more than offsetting the anticipated impact of Aubagio generic competition in the U.S.

Vaccines sales were up 9.1% Y/Y to €1.22 billion, mainly driven by Polio/Pertussis/Hib (PPH).

General Medicines sales decreased 12.8% Y/Y €3.11 billion (down 7.3% on constant currency). Core assets were down 2.9% to €1.56 billion (up 2.4% on constant currency). 

Non-core assets were lower mainly due to Lantus (€353 million, -41.2%).

Consumer healthcare sales growth continued (+0.7% on constant currency) despite unfavorable effect from inventory build in the prior quarter.

Outlook: Sanofi increased its FY23 Business EPS guidance to grow mid-single-digit at CER, citing strong sales from new drug launches, excluding the effect of currency swings. The negative currency impact on 2023 earnings is expected to be 6.5%-7.5%.

It had previously expected 2023 adjusted EPS to grow by a "low single-digit" percentage, with an additional negative currency impact of 5.5%-6.5%.

The improved outlook also includes about €400 million of expected one-off COVID-19 vaccine revenues in the second half of the year, with no further sales expected after that.

Price Action: SNY shares are down 2.13% at $52.40 during the premarket session on the last check Friday.