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Sanofi profit slips on generic competition and currency effects
Global Banking & Finance Review®
Company
By Ludwig Burger
(Reuters) -Sanofi’s first-quarter operating income fell 14.7% as currency effects and cheap competition to its multiple sclerosis drug Aubagio outweighed rising sales of anti-inflammatory drug Dupixent, the French drugmaker said on Thursday.
Operating income adjusted for one-offs slipped to 2.84 billion euros ($3.04 billion), a touch above the 2.79 billion euros expected by analysts in a poll on Sanofi’s website.
The company reiterated that it expects 2024 adjusted earnings per share (EPS) to slip by a low single-digit percentage, excluding currency swings, citing higher taxes and an increase in development expenditure.
Currency changes would drag 2024 earnings lower by between 5.5% and 6.5% at current rates, it added.
Finance chief Francois-Xavier Roger told a media call that the decline in the Argentine Peso was a particular drag on first-quarter overseas sales.
Quarterly sales of eczema and asthma drug Dupixent jumped a currency adjusted 25% to 2.84 billion euros, in line with analyst expectations and accounting for 27% of group sales.
CFO Roger, previously at Nestle, said that preparations to list the Consumer Healthcare division on the Paris stock exchange from the fourth quarter were fully on track but other options, such as a sale, were still possible.
Chief Executive Paul Hudson has been trying to regain battered investor confidence in the drug pipeline since he unexpectedly abandoned 2025 margin targets last October under a plan to boost drug development spending.
Analysts have said the recent market debuts of drugs including Beyfortus, to protect infants against a common respiratory infection, are indicative of the company’s medium-term earnings prospects. Quarterly sales of Beyfortus came in at a better than expected 182 million euros.
($1 = 0.9338 euros)
(Reporting by Ludwig BurgerEditing by Subhranshu Sahu and David Goodman)
Operating income is the profit a company makes from its core business operations, excluding any income derived from non-operational activities such as investments or sales of assets.
Currency effects refer to the impact that fluctuations in exchange rates have on a company's financial performance, particularly when it operates in multiple currencies.
Earnings per share (EPS) is a financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock, reflecting the company's profitability.
A generic drug is a medication that is equivalent to a brand-name drug in dosage, strength, and administration but is sold under its chemical name without the brand label.
A CFO, or Chief Financial Officer, is a senior executive responsible for managing the financial actions of a company, including financial planning, risk management, record-keeping, and financial reporting.
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