PARIS, Oct. 31, 2019 /PRNewswire/ -- Sanofi (NASDAQ:
SNY; EURONEXT: SAN)
|
Q3
2019
|
Change
|
Change
at CER
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9M
2019
|
Change
|
Change
at CER
|
IFRS net sales
reported
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€9,499m
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+1.1%
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-1.1%
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€26,518m
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+4.1%
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+2.2%
|
IFRS net income
reported
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€1,766m
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-22.3%
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-
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€2,816m
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-30.5%(2)
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-
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IFRS EPS
reported
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€1.49
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-18.6%
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-
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€2.33
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-28.3%(2)
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-
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Business net
income(1)
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€2,399m
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+4.3%
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+0.2%
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€5,805m
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+6.4%
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+4.1%
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Business
EPS(1)
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€1.92
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+4.3%
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0.0%
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€4.65
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+6.4%
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+4.1%
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Third-quarter 2019
sales performance(3) led by Sanofi Genzyme and Emerging
Markets
- Net sales were
€9,499 million, up 1.1% on a reported basis, down
1.1%(3) at CER and up 0.5% at
CER/CS(4).
- Sanofi Genzyme
sales increased 19.5% driven by continued strong uptake of
Dupixent®.
- Vaccines sales
decreased 9.8% reflecting anticipated weighting of U.S. flu
vaccines supply towards fourth quarter.
- CHC sales up 0.4%,
impacted by Zantac® voluntary recall, non-core
divestments and increased regulatory requirements.
- Primary Care sales
declined 12.7% at CER/CS due to lower sales in Diabetes and
Established Products.
- Emerging
Markets(5) sales grew 9.7% due to strong performance in
most regions.
Full-year business
EPS guidance confirmed
- Q3 2019 business
net income increased 4.3% to €2,399 million and 0.2% at
CER.
- Q3 2019 business
EPS(1) was stable at CER at €1.92.
- Q3 2019 IFRS EPS
was €1.49, down 18.6% reflecting the capital gain on the European
generics divestment in Q3 2018.
- Sanofi expects 2019
business EPS(1) to grow approximately 5% at
CER(6) barring unforeseen major adverse events. Applying
the average October 2019 exchange rates, the currency impact on
2019 business EPS is estimated to be around +3%.
Key R&D and
regulatory milestones achieved
- Dupixent® approved by European Commission
for severe chronic rhinosinusitis with nasal polyposis.
- Dupixent® approved by European Commission
for adolescents with moderate-to-severe atopic
dermatitis.
- Dupixent® demonstrated positive topline
phase 3 results in children aged 6 to 11 years with severe atopic
dermatitis.
- MenQuadfiTM, a meningococcal vaccine
candidate, submitted in EU.
- Flublok®, a quadrivalent influenza
vaccine, submitted in EU.
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Sanofi Chief
Executive Officer, Paul Hudson, commented:
"Since joining
Sanofi only two months ago, I am increasingly excited about the
strength of our businesses, our ability to develop transformative
medicines and the diverse talent of our teams across the
organization. Building on this foundation, Sanofi delivered a
resilient underlying performance in the third quarter with strong
sales in Specialty Care, largely driven by the continued
outstanding performance of Dupixent®. I am
encouraged by the organization's early achievements in our
efficiency initiatives, which will allow us to further drive
innovation in our business. I'm looking forward to discussing
Sanofi's strategic priorities at our Capital Markets Day in
Cambridge, MA on December 10".
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(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 (see Appendix 8 for definitions).
The consolidated income statement for Q3 2019 is provided in
Appendix 3 and a reconciliation of reported IFRS net income to
business net income is set forth in Appendix 4; (2) including in Q2
2019 a €1.8 billion impairment charge mainly related to
Eloctate®; (3) Changes in net sales are expressed
at constant exchange rates (CER) unless otherwise indicated (see
Appendix 8); (4) Constant Structure: Adjusted for divestment of
European generics business and sales of Bioverativ products to
SOBI; (5) See definition page 9; (6) 2018 business EPS was
€5.47.
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R&D update
Consult Appendix 6 for full overview of Sanofi's R&D
pipeline
Regulatory update
Regulatory updates since July 29,
2019 include the following:
- In October, the European Commission approved
Dupixent® (collaboration with Regeneron) as an
add-on therapy with intranasal corticosteroids for the treatment of
adults with severe chronic rhinosinusitis with nasal polyposis
(CRSwNP) for whom therapy with systemic corticosteroids and/or
surgery do not provide adequate disease control.
- In October, MenQuadfiTM, a meningococcal
quadrivalent conjugate vaccine, was submitted in the European Union
for the prevention of invasive meningococcal disease in individuals
12 months of age and older.
- In October, a quadrivalent recombinant influenza vaccine was
submitted in the European Union for the prevention of influenza
disease in persons 18 years of age and older (vaccine registered in
the U.S. under the trade name Flublok®).
- In August, Dupixent® was approved by the
European Commission for adolescents 12 to 17 years of age with
moderate-to-severe atopic dermatitis who are candidates for
systemic therapy.
At the end of October 2019, the
R&D pipeline contained 85 projects, including 37 new molecular
entities in clinical development (or that have been submitted to
the regulatory authorities). 34 projects are in phase 3 or have
been submitted to the regulatory authorities for approval.
Portfolio update
Phase 3:
- In September, the findings from the CARD study of
Jevtana® (cabazitaxel) were presented at the 2019
European Society of Medical Oncology (ESMO) Congress. Data were
also published in the New England Journal of Medicine and showed
that patients with metastatic castration-resistant prostate cancer
(mCRPC) previously treated with docetaxel and who progressed within
12 months on an androgen receptor targeted agent (abiraterone or
enzalutamide) experienced significantly longer radiographic
progression free survival (rPFS) with Jevtana® plus
prednisone compared with abiraterone plus prednisone or
enzalutamide. Overall survival (OS) with Jevtana® was
also significantly longer.
- In August, positive topline phase 3 results for
Dupixent® in children aged 6 to 11 years with
severe atopic dermatitis were announced.
Phase 2
- In the third quarter, the NSCLC and Prostate Cancer combination
cohorts with cemiplimab and isatuximab were discontinued due
to efficacy considerations. This decision was not safety related.
The ongoing combination trials in Multiple Myeloma and Lymphoma as
well as combination trials with isatuximab and atezolizumab in
solid tumors continue.
Phase 1:
- A phase 1 trial evaluating SAR442085, an anti-CD38 monoclonal antibody,
was initiated in multiple myeloma.
- SAR443122, a RIPK1
inhibitor (collaboration with Denali) entered into phase 1.
- BIVV020, a complement C1s inhibitor, entered phase
1.
- The combination SAR442720
(SHP2 inhibitor) and cobimetinib
entered phase 1.
- SAR441255, a trigonal
GLP1R/GIPR/GCGR agonist was discontinued.
Collaboration
In September, Sanofi and Abbott announced a partnership to
integrate glucose sensing and insulin delivery technologies that
would help to further simplify how people with diabetes manage
their condition.
Corporate Social Responsibility
Sanofi's commitment to good corporate citizenship is rooted in
its heritage. The company recognizes that its core business creates
value for society, and it works to ensure that the benefits of this
societal value are accessible to as many people around the world as
possible. The company also has a longstanding commitment to the
communities where it operates and to minimizing its impact on the
environment.
Sanofi's corporate social responsibility (CSR) approach was
recognized during the third quarter of 2019 by the Dow Jones
Sustainability Index (DJSI) for the 13th consecutive year. In 2019,
Sanofi ranked as the third most sustainable pharmaceutical company
with a score of 82 out of 100, up from 76 last year. The DJSI
selects the best companies in each sector based on economic, social
and environmental performance.
On October 15, 2019, Sanofi opened
a digitally-enabled manufacturing facility in Framingham, one of
the first of its kind, to develop transformative treatments for
patients while significant reducing environmental waste. The
facility will produce 80% less CO2 emissions compared to
traditional technologies and reduce water and chemical usage by 91%
and 94% respectively.
2019 third-quarter and first nine months financial
results(10)
Business Net Income(10)
In the third quarter of 2019, Sanofi generated net sales
of €9,499 million, an increase of 1.1% (down 1.1% at CER). First
nine months sales were €26,518 million, up 4.1% on a reported basis
(up 2.2% at CER).
Third-quarter other revenues increased 19.9% (up 14.8% at
CER) to €422 million, reflecting the VaxServe sales contribution of
non-Sanofi products (€372 million, up 18.7% at CER). First nine
months other revenues increased 23.8% (up 17.2% at CER) to €1,096
million, driven by the VaxServe sales contribution of non-Sanofi
products (€915 million, up 24.0% at CER) and the consolidation of
collaboration revenues from Swedish Orphan Biovitrum AB (SOBI).
Third-quarter Gross Profit increased 0.9% to €6,787
million (down 1.8% at CER). The gross margin ratio decreased 0.2
percentage points to 71.4% (71.2% at CER) versus the third quarter
of 2018. The favorable effects from Dupixent® and
the divestment of the European generics business were more than
offset by the negative impact from U.S. Diabetes net price
evolution, the decline in Established Rx Products sales in Mature
Markets as well as the impact of Vaccines and the
Zantac® recall. In the third quarter of 2019, the
gross margin ratio of segments were 74.8% for Pharmaceuticals (up
1.2 percentage points), 64.8% for CHC (down 2.0 percentage points)
and 67.4% for Vaccines (down 2.7 percentage points). First nine
months Gross Profit increased 5.1% to €19,095 million (up 2.8% at
CER). In the first nine months of 2019, the gross margin ratio
increased 0.7 percentage points to 72.0% (71.8% at CER) versus the
same period of 2018. Sanofi expects its full-year 2019 gross margin
ratio to be between 70% and 71% at CER.
Research and Development (R&D) expenses
decreased 6.8% to €1,362 million in the third quarter of 2019. At
CER, R&D expenses decreased 8.1%, reflecting favorable phasing
of expenses, lower research costs resulting from restructuring of
the immuno-oncology collaboration with Regeneron as well as a €45
million payment from SOBI related to the BIV001 opt-in. In the
third quarter, the ratio of R&D to sales decreased 1.3
percentage points to 14.3% compared to the third quarter of 2018.
First nine months R&D expenses increased 2.8% to €4,335 million
(up 0.5% at CER). In the first nine months of 2019, the ratio of
R&D to sales was 0.3 percentage points lower at 16.3% compared
to the same period of 2018.
Third-quarter selling general and administrative expenses
(SG&A) increased 0.6% to €2,314 million. At CER, SG&A
expenses were down 1.5%, reflecting cost efficiency measures
notably in Primary Care in Mature Markets and support functions as
well as the impact of the European generics disposal which more
than offset increased investments in Specialty Care. In the third
quarter, the ratio of SG&A to sales decreased 0.1 percentage
points to 24.4% compared to the third quarter of 2018. First nine
months SG&A expenses increased 0.6% to €7,156 million (down
1.4% at CER). In the first nine months of 2019, the ratio of
SG&A to sales was 0.9 percentage points lower at 27.0% compared
to the same period of 2018.
Third-quarter operating expenses were €3,676 million, a
decrease of 2.3% and 4.1% at CER. Excluding the payment from SOBI
and the disposal of European generics business, operating expenses
decreased 1.9% at CER in the third quarter. First nine months
operating expenses were €11,491 million, an increase of 1.5% and
down 0.7% at CER.
Third-quarter other current operating income net of
expenses was -€119 million versus -€74 million in the third
quarter of 2018. This line includes the share of profit to
Regeneron of the monoclonal antibodies Alliance, reimbursement of
development costs by Regeneron and the reimbursement of
commercialization-related expenses incurred by Regeneron. This line
also includes the share of profit/loss related to the
immuno-oncology Alliance. In the third quarter of 2019, a total of
€23 million of capital gains on non-strategic CHC brand disposals
was also recorded. First nine months other current operating income
net of expenses was -€312 million versus €84 million in the same
period of 2018.
The share of profits from associates was €132 million in
the third quarter versus €153 million for the same period of 2018,
mainly reflecting the share of profits in Regeneron. In the first
nine months, the share of profits from associates was broadly
stable at €301 million versus the same period of 2018.
In the third quarter, non-controlling interests
were -€12 million versus -€26 million in the third quarter of
2018, reflecting the end of non-controlling interests related to
the Alliance with Bristol-Myers Squibb on
Plavix® and Avapro®. First nine months
non-controlling interests were -€27 million versus -€84 million for
the same period of 2018.
Third-quarter business operating income increased 3.1% to
€3,112 million. At CER, business operating income decreased 0.9%.
The ratio of business operating income to net sales increased 0.7
percentage points to 32.8% versus the third quarter of 2018. Over
the period, the business operating income ratio of segments were
39.0% for Pharmaceuticals (up 3.4 percentage points), 32.0% for CHC
(down 1.2 percentage points) and 50.0% for Vaccines (down 5.3
percentage points).
(10) See Appendix
3 for 2019 third-quarter consolidated income statement; see
Appendix 8 for definitions of financial indicators, and Appendix 4
for reconciliation of IFRS net income reported to business net
income.
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First nine months business operating income was €7,566 million,
up 5.9% (up 3.7% at CER). In the first nine months of 2019, the
ratio of business operating income to net sales increased 0.4
percentage points to 28.5%.
Net financial expenses were -€71 million in the
third quarter versus -€106 million in the same period of 2018,
reflecting lower cost of net debt. First nine months net financial
expenses were -€201 million versus -€211 million in the same period
of 2018.
Third-quarter and first nine months effective tax rate
was stable at 22.0%. Sanofi is currently actively engaged with the
Chinese Ministry of Finance to support and cooperate with a
Pharmaceutical sector audit process underway.
Third-quarter business net income(10)
increased 4.3% to €2,399 million and increased 0.2% at CER. The
ratio of business net income to net sales increased 0.8 percentage
points to 25.3% versus the third quarter of 2018. First nine months
2019 business net income(10) increased 6.4% to €5,805
million and increased 4.1% at CER. The ratio of business net income
to net sales increased 0.5 percentage points to 21.9% versus the
first nine months of 2018.
In the third quarter
of 2019, business earnings per
share(10) (EPS) increased 4.3% to €1.92 on a
reported basis and was stable at CER. The average number of shares
outstanding was 1,252.2 million versus 1,247.1 million in the third
quarter of 2018.
In the first nine
months of 2019, business earnings per share(10) was
€4.65, up 6.4% on a reported basis and up 4.1% at CER. The average
number of shares outstanding was 1,248.9 million in the first nine
months of 2019 versus 1,247.6 million in the first nine months of
2018.
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Reconciliation of IFRS net income reported to business net
income (see Appendix 4)
In the first nine months of 2019, the IFRS net income was €2,816
million. The main items excluded from the business net income
were:
- An amortization charge of €1,636 million related to fair value
remeasurement on intangible assets of acquired companies (primarily
Genzyme: €550 million, Bioverativ: €380 million, Boehringer
Ingelheim CHC business: €184 million, Aventis: €153 million) and to
acquired intangible assets (licenses/products: €80 million). An
amortization charge of €520 million related to fair value
remeasurement on intangible assets of acquired companies (primarily
Genzyme: €182 million, Bioverativ: €108 million, Boehringer
Ingelheim CHC business: €62 million, Aventis: €46 million) and to
acquired intangible assets (licenses/products: €24 million) was
recorded in the third quarter. These items have no cash impact on
the Company.
- An impairment of intangible assets of €2,023 million (of which
€1,835 million in the second quarter mainly related to
Eloctate® and €183 million in the third quarter which
included an impairment related to Zantac®).
- Restructuring costs and similar items of €904 million (of which
€157 million in the third quarter) mainly related to streamlining
initiatives in Japan, Europe and the U.S.
- An income of €242 million mainly reflecting a contingent price
adjustment on the disposal of SP MSD.
- A net income of €260 million (of which a charge of €57 million
in the third quarter) mainly related to litigation.
- A €1,279 million tax effect arising from the items listed
above, mainly comprising €906 million of deferred taxes generated
by amortization and impairments of intangible assets and €247
million associated with restructuring costs and similar items. The
third quarter tax effect was €374 million, including €195 million
of deferred taxes generated by amortization and impairments of
intangible assets and €50 million associated with restructuring
costs and similar items (see Appendix 4).
- An expense of €94 million net of tax (of which €41 million in
the third quarter) related to restructuring costs of associates and
joint ventures and expenses arising from the impact of acquisitions
on associates and joint ventures.
(10) See Appendix
3 for 2019 Third-quarter consolidated income statement; see
Appendix 8 for definitions of financial indicators, and Appendix 4
for reconciliation of IFRS net income reported to business net
income.
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Capital Allocation
In the first nine months of 2019, net cash generated by
operating activities increased 58.2% to €4,976 million after
capital expenditures of €992 million and an increase in working
capital of €1,365 million (which compared with an increase of
€1,925 million over the first nine months of 2018). Over the
period, the dividend paid by Sanofi was €3,834 million,
restructuring costs and similar items cash-out was €917 million and
acquisitions and partnerships net of disposals reflecting a net
cash-in during the period were €525 million. As a consequence, net
debt decreased from €17,628 million at December 31, 2018, to €16,910 million at
September 30, 2019 (amount net of
€8,606 million cash and cash equivalents).
To access the full press release of the 2019 Q3 results, please
click here.
Forward-Looking Statements
This press release contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995, as
amended. Forward-looking statements are statements that are not
historical facts. These statements include projections and
estimates and their underlying assumptions, statements regarding
plans, objectives, intentions and expectations with respect to
future financial results, events, operations, services, product
development and potential, and statements regarding future
performance. Forward-looking statements are generally identified by
the words "expects", "anticipates", "believes", "intends",
"estimates", "plans" and similar expressions. Although Sanofi's
management believes that the expectations reflected in such
forward-looking statements are reasonable, investors are cautioned
that forward-looking information and statements are subject to
various risks and uncertainties, many of which are difficult to
predict and generally beyond the control of Sanofi, that could
cause actual results and developments to differ materially from
those expressed in, or implied or projected by, the forward-looking
information and statements. These risks and uncertainties include
among other things, the uncertainties inherent in research and
development, future clinical data and analysis, including post
marketing, decisions by regulatory authorities, such as the FDA or
the EMA, regarding whether and when to approve any drug, device or
biological application that may be filed for any such product
candidates as well as their decisions regarding labelling and other
matters that could affect the availability or commercial potential
of such product candidates, the absence of guarantee that the
product candidates if approved will be commercially successful, the
future approval and commercial success of therapeutic alternatives,
Sanofi's ability to benefit from external growth opportunities, to
complete related transactions and/or obtain regulatory clearances,
risks associated with intellectual property and any related pending
or future litigation and the ultimate outcome of such
litigation, trends in exchange rates and prevailing interest
rates, volatile economic conditions, the impact of cost containment
initiatives and subsequent changes thereto, the average number of
shares outstanding as well as those discussed or identified in the
public filings with the SEC and the AMF made by Sanofi, including
those listed under "Risk Factors" and "Cautionary Statement
Regarding Forward-Looking Statements" in Sanofi's annual report on
Form 20-F for the year ended December 31,
2018. Other than as required by applicable law, Sanofi does
not undertake any obligation to update or revise any
forward-looking information or statements.
Media
Relations:
|
Investor
Relations:
|
Ashleigh
Koss
|
George
Grofik
|
908-981-8745
|
+33 (0)1 53 77 45
45
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Email: Ashleigh.koss@sanofi.com
|
Email: IR@sanofi.com
|
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SOURCE Sanofi