- Sanofi SA reported a year over year loss in net sales for the first quarter, underscoring how downward pressures continue to take a toll on the French pharma's diabetes and cardiovascular units.
- Net sales came in at €7.9 billion ($9.5 billion), 8.7% lower than the same period in 2017. Sanofi saw sales of its flagship insulin Lantus drop 32% to €663 million ($802 million), while a 42% increase for cholesterol drug Praluent couldn't make up for declines elsewhere in the cardiovascular portfolio, which fell 4% overall.
- While analysts had braced for those types of loses, the company's new eczema treatment Dupixent significantly missed Wall Street estimates with its €107 million ($129 million) in sales. On a Friday earnings call, Sanofi management highlighted that payers have been receptive to Dupixent, and total prescriptions for the drug were up 25% compared to the fourth quarter
As one of the big three diabetes drugmakers, Sanofi and its bottom line has been hit by market saturation and competitive pricing. At the same time, the company hasn't exactly crafted the most robust late-stage pipeline among big pharma players.
That predicament has pushed Sanofi to branch into new areas and products. Recent acquisitions of Bioverativ Inc. and Ablynx NV gave Sanofi two marketed hemophilia treatments and an injection of rare disease candidates into its pipeline. Yet those acquisitions came with a heavy price tag, and the French pharma will surely have to invest millions more in R&D and commercialization to solidify its place in blood disorders.
Dupixent (dupilumab) was billed as one of the key products to strengthen Sanofi through this shaky period. Despite a few concerns about growth early in its launch, Dupixent delivered a strong third quarter last year, when sales tripled from the previous quarter. By early February, Sanofi predicted growth from Dupixent and revenue from Bioverativ's portfolio would result in earnings per share growth of up to 5%.
The first quarter consensus miss, however, renewed some concerns. Dupixent sales were €37 million below Wall Street estimates. Sanofi acknowledged that de-stocking as well as contributions to patient assistance programs gummed things up a bit, but Jefferies analyst Ian Hilliker pointed out that Dupixent sales still were about 5% lower than expected when accounting for those factors
Sanofi executives maintained they are still very pleased with Dupixent's launch, arguing too that the perceived headwinds will be short-lived.
"What happened with the inventory is we ended Q4 with a relatively higher inventory position due to the fact that, partially, we began only shipping to wholesalers any inventory at the very end of Q3 and beginning of Q4," Bill Sibold, EVP of Sanofi Genzyme, said on the April 27 earnings call. "So when we finished Q4, we were at about 5 weeks inventory — which is on the high end of normal — and we finished that Q1 around 3 weeks, so while there was some inter-quarter volatility at inventory levels, we think that this is something we're through now."
Whether it was from Dupixent's miss or the overall sales decline, investors clearly weren't sold on Sanofi's near-term potential. Shares were down 3% to $39.17 apiece at market open Friday.