Sanofi raises annual profit goal

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France’s Sanofi raised its annual profit guidance after posting forecast-beating second-quarter results driven by strong sales of its blockbuster eczema drug Dupixent and its vaccines.

The pharmaceuticals group, led by chief executive Paul Hudson, expects annual earnings per share to climb 12 per cent at constant currencies instead of the “high single-digit” improvement it had initially hoped for.

“Our second-quarter performance gives us confidence in Sanofi’s growth trajectory for this year,” said Hudson in a statement on Thursday.

Hudson, since taking the helm in September 2019, has narrowed Sanofi’s focus on fewer but faster-growing therapeutic areas, as well as cutting costs to reinvest in the business. Sanofi was hit by the pandemic last year as some patients delayed treatments, but has bounced back with analysts forecasting higher revenue this year than before the crisis.

Sanofi shares have risen almost 11 per cent this year before the earnings report. They have lagged behind an 18 per cent rise for larger rival, Pfizer, but ahead of a 4 per cent rise for GlaxoSmithKline.

Second-quarter revenue rose 12.4 per cent year on year on a comparable basis to €8.7bn, compared with analysts’ forecasts of €8.4bn in a company-compiled consensus. Earnings per share in the period stood at €1.38, ahead of expectations for €1.29 per share.

Sanofi confirmed that the Covid-19 vaccine being developed in partnership with GlaxoSmithKline remained on track for potential approval by the end of the year as it undergoes late-stage clinical trials.

Given that its competitors, such as BioNTech/Pfizer and Moderna, have beaten it to market and are churning out billions of doses, Sanofi said its Covid-19 jab might be useful as a booster shot.

“The potential need for booster shots is growing and there is a lot of interest in our Covid-19 vaccine from governments,” said chief financial officer Jean-Baptiste Chasseloup de Chatillon on a call with reporters.

He declined to comment on whether the coronavirus jab could be a real driver of sales or profit. Sanofi has a second one in early-stage testing based on mRNA technology that has proven so transformative in the fight against Covid-19.

“We want to be in the race to see if mRNA can bring something to the flu market,” he added, referring to Sanofi’s large business in flu vaccines.

Despite being one of the biggest makers of vaccines in the world by sales before the pandemic, Sanofi was beaten to market by newcomers who used newer mRNA technology to immunise people against Covid-19. A vital study had to be repeated because of a dosing error, delaying its progress by about six months.

To ensure that it does not lose more ground if mRNA proves as useful in other vaccine areas, Sanofi has pledged to invest €400m a year for the foreseeable future to research the new technology. It recently opened a specialised R&D centre for the work.