Sanofi Q4 Profit Climbs, Sees Slower Earnings Growth In FY23; Stock Down

French drug major Sanofi SA reported Friday higher profit in its fourth quarter with strong revenue growth mainly with strong sales of Dupixent. Looking ahead for fiscal 2023, the company projects higher business earnings, but the expected growth is slower than recorded in fiscal 2022. Sanofi shares were losing around 4 percent in the morning trading in Paris as well as in pre-market activity on Nasdaq.

For fiscal 2023, Sanofi expects business earnings per share to grow low single digit at constant exchange rates, barring unforeseen major adverse events.

In fiscal 2022, business earnings per share growth at constant exchange rates was 17.1 percent to 8.26 euros. The currency impact on 2023 business earnings per share is estimated between negative 3.5 percent to negative 4.5 percent.

Sanofi Chief Executive Officer, Paul Hudson, said, “With the view on the expected entrants of generic competition for Aubagio in the coming months, we remain confident in our outstanding commercial capabilities, including the ambition to reach sales of 10 billion euros for Dupixent in 2023, enabling us to guide to low single-digit EPS growth for the year.”

Further, the company said its Board of Directors on Thursday proposed annual dividend of 3.56 euro per share, an increase of 6.9 percent.

In its fourth quarter, net income, on IFRS basis, climbed 29.1 percent to 1.46 billion euros from last year’s 1.13 billion euros. Earnings per share grew 29 percent to 1.16 euros from 0.90 euro a year ago.

Business net income was 2.14 billion euros, up 23.8 percent from last year, and business earnings per share grew 24 percent to 1.71 euros.

Fourth-quarter business operating income increased 20.7 percent from last year to 2.72 billion euros. At CER, business operating income increased 15 percent. The business operating income margin increased 1.9 percentage point to 30.3 percent.

IFRS net sales were 10.73 billion euros, up 7.3 percent from 9.99 billion euros a year ago. At constant exchange rates, company sales were up 2.6 percent.

Pharmaceutical sales increased 7.3 percent to 7.79 billion euros, mainly driven by the Specialty Care portfolio, which recorded sales growth of 18.1 percent with continued strong performance of Dupixent.

CHC sales increased 6.6 percent driven by double-digit growth of Digestive Wellness, Cough & Cold and Allergy categories.

Meanwhile, Vaccines sales fell 16.3 percent, reflecting influenza and PPH sales phasing as well as ramp up of nonconsolidated Vaxelis sales. General Medicines GBU sales were also lower by 3.7 percent mainly due to Lantus and spin-off of EUROAPI.

On a regional basis, GBU sales in U.S. grew 8.7 percent at CER to 4.67 billion euros, and 2.4 percent in rest of the world to 3.42 billion euros. Meanwhile, Europe sales fell 5.6 percent to 2.64 billion euros.

In Paris, Sanofi shares were trading at 83.44 euros, down 3.84 percent. In pre-market activity on Nasdaq, the shares were trading at $45.56, down 3.56 percent.

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