French drug major Sanofi reported Friday higher profit in its third quarter, while sales declined. Further, the company reiterated fiscal 2023 business earnings view.
Separately, Sanofi said it plans to separate the Consumer Healthcare Business with a view to focus on Biopharma business.
The company announced further steps to improve its cost structure, launching efficiency initiatives across the Biopharma business, and targeting savings of a total of up to 2 billion euros from 2024 to the end of 2025.
Sanofi shares were losing more than 15 percent in the morning trading in Paris as well as in pre-market activity on Nasdaq.
Paul Hudson, Chief Executive Officer, said, “In this new chapter of our strategy, we are deepening our investment in R&D, taking steps toward becoming a pure play biopharma company, and further optimizing our cost structure. This will help us accelerate innovation and strengthen our growth drivers, while ensuring long-term profitability…”
For fiscal 2023, the company continues to expect business earnings per share to grow mid single-digit at constant exchange rates. The guidance includes approximately 400 million euros of expected one-off COVID vaccine revenues in the fourth quarter.
The company also provided a preliminary outlook for 2024 and 2025 that reflects the new chapter of its strategy, and reiterated its goal to generate over 22 billion euros in sales in immunology, and over 10 billion euros in sales in vaccines by 2030.
Sanofi said it plans to increase its Research and Development or R&D investments to fully realize its pipeline potential, and drive long-term growth.
The company will prioritize its investments in R&D and modernize its approach to commercial delivery. Of its targeted savings, most will be reallocated to fund innovation and growth drivers.
Regarding the planned separation of Consumer Healthcare Business, Sanofi said it would be done at the earliest in the fourth quarter of 2024 through the creation of a publicly listed entity headquartered in France.
The move is expected to enable greater management focus and resource allocation to the needs of the Biopharma business. It has identified longer-term operational levers in the business to support the accelerated R&D investments.
For the third quarter, Sanofi’s net income attributable to equity holders of the company rose 21.6 percent to 2.53 billion euros or 2.01 euros per share from 2.08 billion euros or 1.66 euros per share in the prior year.
Business net income was $3.20 billion euros, compared to 3.61 billion euros last year. Business earnings per share for the third quarter were 2.55 euros, compared to last year’s 2.88 euros.
R&D expenses decreased 4.2 percent and selling general and administrative expenses decreased 2.5 percent.
Net sales for the third quarter declined 4.1 percent to 11.96 billion euros from 12.48 billion euros in the prior year. Sales, however, grew 3.2 percent at constant exchange rates.
Specialty Care sales grew 13.5 percent driven by growth in Dupixent and ALTUVIIIO more than offsetting the impact of Aubagio generic competition in the U.S.
In Paris, Sanofi shares were trading at 84.95 euros, down 15.44 percent.
In pre-market activity on Nasdaq, Sanofi shares were trading at $44.64, down 16.29 percent.
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