Cardio/diabetes sales drag down Sanofi earnings

On the heels of a pair of proposed multibillion dollar acquisitions, Sanofi (Euronext:SAN; NYSE:SNY) reported earnings that missed analyst forecasts as the company grapples with a decline in sales for its diabetes and cardiovascular business unit.

The company reported a 4Q17 non-GAAP EPS of €1.06 and sales of €8.69 billion ($10.8 billion) vs. consensus of €1.15 and $8.71 billion ($10.9 billion), respectively. The pharma also guided 2018 EPS growth of 2-5% at constant exchange rates.

In November, Sanofi narrowed the average rate of decline it expects for its diabetes product sales over 2015-18 to 6-8% from its previous estimate of 4-8%. Fourth quarter sales for Sanofi's diabetes/cardiovascular global business unit were down 19% to €1.3 billion ($1.6 billion), and FY17 sales were down 14% to €5.4 billion ($6.7 billion).

On its earnings conference call, Sanofi CFO and EVP Jérôme Contamine said the midpoint of Sanofi’s 2015-18 diabetes sales outlook implies a decline of about 9% for 2018. However, he expects that and other headwinds, including declining vaccine sales, to be offset by sales of atopic dermatitis drug Dupixent dupilumab, income from Bioverativ Inc. (NASDAQ:BIVV) -- which the company is acquiring for $11.6 billion -- and new product launches (see BioCentury Jan. 26).

Dupixent sales were €118 million ($147.1 million) for 4Q17 vs. the Street estimate of €114 million ($142.1 million). The product is a human mAb targeting the alpha subunit of the IL-4 receptor (CD124; IL-4RA) and the IL-13 receptor.

Bioverativ posted combined sales of $780.7 million for the first nine months of 2017 for its hemophilia drugs Eloctate efmoroctocog alfa and Alprolix eftrenonacog alfa.

Sanofi is also acquiring Ablynx N.V. (Euronext:ABLX; NASDAQ:ABLX) -- in a €3.9 billion deal announced Jan. 29. The Belgian company’s caplacizumab (ALX-0081/ALX-0681) is under review in Europe to treat acquired thrombotic thrombocytopenic purpura (TTP), with a BLA submission to FDA expected this half. The candidate is an anti-von Willebrand factor Nanobody (see BioCentury, Feb. 2).

Sanofi fell €0.81 to €66.71 in Paris and $1.60 to $40.51 in New York on Wednesday.