Paris, October 28, 2016
Sanofi Announces Strong Q3 2016 Results
Q3 2016 | Change | Change (CER) | 9M 2016 | Change | Change (CER) | |
IFRS net sales reported | €9,028m | +2.0% | +3.0% | €24,954m | -2.1% | +0.5% |
IFRS net income reported | €1,674m | +2.8% | €3,919m | -0.9% | ||
IFRS EPS reported | €1.30 | +4.0% | €3.04 | +0.3% | ||
Aggregate Company sales(1) | €9,652m | +2.1% | +3.0% | €27,063m | -1.3% | +1.2% |
Business net income(2) | €2,300m | +9.7% | +11.1% | €5,702m | +0.7% | +4.1% |
Business EPS(2) | €1.79 | +11.2% | +12.4% | €4.43 | +2.3% | +5.8% |
Following the announcement of exclusive negotiations with Boehringer Ingelheim and as per the IFRS 5 presentation requirement for discontinued operations, net income for Sanofi's Animal Health business (Merial) will be reported on a separate line ("Net income from the held for exchange Animal Health Business") in the Consolidated Income Statement for Q3 2016 and for 9M 2016, and the prior year. As of September 30 2016, Sanofi continues to report the performance of the Animal Health business, which remained an operating segment consistent with IFRS 8 and was included in the key performance indicators of the Company.
2016 guidance raised on strong third-quarter financial results
Solid sales performance despite continuing headwinds in diabetes and the Plavix LOE in Japan
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Sanofi Chief Executive Officer, Olivier Brandicourt, commented: "We have generated solid sales momentum in the third quarter and seen a strong contribution to our financial performance from savings and efficiencies arising from our more focused organization. As a result, we are able to increase our FY 2016 Business EPS guidance. In addition, we have continued to work diligently to progress our major launches and the pipeline. With the filing of Dupixent®, we now have another important product under FDA review which we believe will enhance Sanofi's growth profile in the coming years." |
(1) Including Merial (see Appendix 8 for definition of Aggregate Company sales) which is reported on a single line in the consolidated income statements in accordance with IFRS 5 (Non-current assets held for sale and discontinued operations). Additionally, Sanofi comments include Merial for every income statement line using the term "Aggregate"; (2) In order to facilitate an understanding of operational performance, Sanofi comments on the business net income statement. Business net income is a non-GAAP financial measure (see Appendix 8 for definitions). The consolidated income statement for Q3 2016 and 9M 2016 is provided in Appendix 4 and a reconciliation of business net income to IFRS net income reported is set forth in Appendix 3; (3) Percentage changes in net sales and Aggregate sales are expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 8); (4) 2015 Business EPS was €5.64; (5) See page 8; (6) Current Good Manufacturing Practice
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2016 third-quarter and nine-month Aggregate Sanofi sales
Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER(7). |
In the third quarter of 2016, Aggregate Company sales were €9,652 million, up 2.1% at 2016 exchange rates. Exchange rate movements had a negative effect of 0.9 percentage points, primarily reflecting the adverse evolution of the Argentine Peso, Chinese Yuan, and British Pound, which more than offset the positive effects from the Japanese Yen and Brazilian Real. At CER, Aggregate Company sales increased 3.0%. Year-to-date Aggregate Company sales reached €27,063 million, down 1.3% at 2016 exchange rates. Exchange rate movements had an unfavorable effect of 2.5 percentage points.
The first nine months performance included a negative currency impact related to the change of exchange rate applied for the translation of Venezuela operations, resulting from the evolution of the exchange system in February 2016 as well as from the persistent inability to exchange Venezuelan bolivars for U.S. dollars at the privileged official rate. In addition, in the first half of 2015, Sanofi benefited from a significant increase in product demand in Venezuela, due to buying patterns associated with local market conditions. As a consequence, sales in Venezuela were €9 million in the first nine months of 2016 compared to €423 million in the first nine months of 2015 (no sales were recorded in the third quarter of 2016 compared to €24 million in the third quarter of 2015). Excluding Venezuela, Aggregate Company sales increased 3.3% and 2.8% in the third quarter and first nine months of 2016, respectively.
Global Business Units
The table below presents sales by Global Business Units (GBU) and reflects the organization of Sanofi which became effective as of January 1, 2016. In this organizational structure, all Pharmaceutical sales in Emerging Markets are now included in the General Medicines and Emerging Markets GBU. This new reporting structure simplifies Sanofi, deepens specialization and allows clear focus on growth drivers.
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Net Sales by GBU (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) | ||
Sanofi Genzyme (Specialty Care)(a) | 1,270 | +16.9% | 3,684 | +19.1% | ||
Diabetes and Cardiovascular(a) | 1,585 | -2.5% | 4,687 | -3.9% | ||
General Medicines & Emerging Markets(b) | 4,370 | -2.4%(c) | 13,358 | -4.1%(e) | ||
Sanofi Pasteur (Vaccines) | 1,803 | +14.4% | 3,225 | +11.0%(f) | ||
Merial (Animal Health) | 624 | +4.0% | 2,109 | +10.3% | ||
Total Aggregate Company sales | 9,652 | +3.0%(d) | 27,063 | +1.2%(g) |
(a) Does not include Emerging Markets sales- see definition page 8; (b) Includes Emerging Markets sales for Diabetes & Cardiovascular and Specialty Care; (c) Excluding Venezuela: -1.9%; (d) Excluding Venezuela: +3.3%; (e) Excluding Venezuela:-1.4%; (f) Excluding Venezuela: +11.3%; (g) Excluding Venezuela:+2.8%;
Global Franchises
The table below presents sales by global franchise, which facilitates straightforward peer comparisons. Appendix 1 provides a reconciliation of sales by GBU and franchise.
Net sales by Franchise (€ million) | Q3 2016 | Change (CER) | Developed Markets | Change (CER) | Emerging Markets | Change (CER) |
Specialty Care | 1,517 | +18.5% | 1,270 | +16.9% | 247 | +26.5%(a) |
Diabetes and Cardiovascular | 1,929 | +0.3%(b) | 1,585 | -2.5% | 344 | +14.2%(c) |
Established Products | 2,535 | -7.4%(d) | 1,587 | -12.5% | 948 | +1.7%(e) |
Consumer Healthcare (CHC) | 791 | -1.2%(f) | 479 | +1.3% | 312 | -4.7%(g) |
Generics | 453 | +1.3%(h) | 257 | +2.8% | 196 | -0.5%(i) |
Vaccines | 1,803 | +14.4% | 1,458 | +16.4% | 345 | +6.6% |
Animal Health | 624 | +4.0% | 468 | +1.1% | 156 | +13.3% |
Total Aggregate net sales | 9,652 | +3.0%(j) | 7,104 | +2.1% | 2,548 | +5.6%(k) |
(a) Excluding Venezuela: +25.9%; (b) Excluding Venezuela: +0.4%; (c) Excluding Venezuela: +15.2%; (d) Excluding Venezuela: -6.9%; (e) Excluding Venezuela: +3.4%;
(f) Excluding Venezuela: -1.0%; (g) Excluding Venezuela: -4.1%; (h) Excluding Venezuela: +2.2%; (i) Excluding Venezuela:+1.5%; (j) Excluding Venezuela: +3.3%; (k) Excluding Venezuela: +6.6%.
(7) See Appendix 8 for definitions of financial indicators.
The table below presents sales by global franchise for the first nine months of 2016.
Net sales by Franchise (€ million) | 9M 2016 | Change (CER) | Developed Markets | Change (CER) | Emerging Markets | Change (CER) |
Specialty Care | 4,381 | +18.8%(a) | 3,684 | +19.1% | 697 | +17.5%(b) |
Diabetes and Cardiovascular | 5,723 | -1.8% | 4,687 | -3.9% | 1,036 | +8.2%(c) |
Established Products | 7,743 | -8.5%(d) | 4,930 | -11.6% | 2,813 | -2.9%(e) |
Consumer Healthcare (CHC) | 2,496 | -2.9%(f) | 1,584 | +1.7% | 912 | -9.3%(g) |
Generics | 1,386 | +0.8%(h) | 810 | +0.9% | 576 | +0.8%(i) |
Vaccines | 3,225 | +11.0%(j) | 2,268 | +9.2% | 957 | +15.3%(k) |
Animal Health | 2,109 | +10.3% | 1,645 | +7.4% | 464 | +21.1% |
Total Aggregate net sales | 27,063 | +1.2%(l) | 19,608 | +0.5% | 7,455 | +3.0%(m) |
(a) Excluding Venezuela : +19.3%; (b) Excluding Venezuela : +20.1%; (c) Excluding Venezuela : +12.9%; (d) Excluding Venezuela : -6.1%; (e) Excluding Venezuela : +4.4%; (f) Excluding Venezuela: +0.7%; (g) Excluding Venezuela: -0.7%; (h) Excluding Venezuela: +3.0%; (i) Excluding Venezuela: +5.7%; (j) Excluding Venezuela: +11.3%;(k) Excluding Venezuela: +16.5%; (l) Excluding Venezuela: +2.8%; (m) Excluding Venezuela: +8.7%.
Pharmaceuticals
Third-quarter sales for Pharmaceuticals increased 0.5% to €7,225 million. Growth in the Multiple Sclerosis, Rare Disease and Cardiovascular franchises offset a decrease in Diabetes, CHC and Established Rx Products. Year-to-date sales for Pharmaceuticals decreased 0.9% to €21,729 million. Excluding Venezuela, year-to-date sales for Pharmaceuticals increased 0.9%.
Rare Disease franchise
Net sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
Cerezyme® | 183 | +1.6% | 564 | +4.5% |
Myozyme® / Lumizyme® | 185 | +16.0% | 533 | +12.8% |
Fabrazyme® | 176 | +20.4% | 492 | +15.0% |
Aldurazyme® | 53 | +12.5% | 151 | +7.5% |
Cerdelga® | 28 | +55.6% | 77 | +75.0% |
Total Rare Diseases | 708 | +14.3% | 2,061 | +12.4% |
In the third quarter, Gaucher (Cerezyme® and Cerdelga®) sales grew 6.3% to €211 million, reflecting Cerezyme® growth in Emerging Markets (up 26.9% to €56 million) and the increasing contribution of Cerdelga® (€28 million versus €18 million in the third quarter of 2015). Year-to-date Gaucher sales increased 9.5% to €641 million.
Third-quarter sales of Fabrazyme® increased 20.4% to €176 million. The strong global momentum of Fabrazyme® is a result of continued accrual of new patients as a result of patients switching from competing products and earlier stage patient identification and treatment. Year-to-date sales of Fabrazyme® were up 15.0% to €492 million.
Sales of Myozyme®/Lumizyme® increased 16.0% to €185 million in the third quarter, mainly due to new patient accruals as a consequence of increased patient identification. Year-to-date sales of Myozyme®/Lumizyme® increased 12.8% to €533 million.
Multiple Sclerosis franchise
Net sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
Aubagio® | 334 | +49.8% | 928 | +56.8% |
Lemtrada® | 112 | +69.1% | 308 | +95.1% |
Total Multiple Sclerosis | 446 | +54.3% | 1,236 | +64.9% |
Third-quarter sales of Aubagio® were up 49.8% to €334 million driven by the U.S. (up 50.9% to €239 million) and Europe (up 41.5% to €75 million). Aubagio® is currently the fastest growing oral disease modifying therapy in the Multiple Sclerosis market with patient market share of 9.0% in the U.S. (IMS NSP TRX - second week of October). Year-to-date sales of Aubagio® increased 56.8% to €928 million.
In the third quarter, sales of Lemtrada® increased 69.1% to €112 million, including €64 million in the U.S. (up 66.7%) and €37 million in Europe (up 81.8%), mainly generated in the UK. Year-to-date sales of Lemtrada® were up 95.1% to €308 million.
Oncology franchise
Net sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
Jevtana® | 88 | +12.8% | 266 | +12.7% |
Thymoglobulin® | 70 | +12.7% | 204 | +11.2% |
Taxotere® | 45 | -22.4% | 137 | -18.5% |
Eloxatin® | 43 | -24.1% | 129 | -19.5% |
Mozobil® | 39 | +8.3% | 111 | +7.6% |
Zaltrap® | 16 | -10.5% | 50 | -13.6% |
Total Oncology | 363 | -2.4% | 1,084 | -1.6% |
In the Third quarter, Oncology sales decreased 2.4% to €363 million, reflecting lower sales of Taxotere® and Eloxatin®. Year-to-date sales of Oncology were €1,084 million, down 1.6%.
Sales of Jevtana® increased 12.8% to €88 million in the third quarter led by the U.S. (up 21.9% to €38 million) and Japan. Year-to-date sales of Jevtana® were up 12.7% to €266 million.
Third-quarter Thymoglobulin® sales increased 12.7% to €70 million supported by sales in China. Year-to-date sales of Thymoglobulin® were up 11.2% to €204 million.
Third-quarter sales of Eloxatin® were down 24.1% to €43 million reflecting generic competition in Canada. Over the same period, sales of Taxotere® (docetaxel) decreased 22.4% (to €45 million) due to generic competition in Japan. Year-to-date sales of Taxotere® and Eloxatin® were down 18.5% (€137 million) and down 19.5% (€129 million), respectively.
Diabetes franchise
Net sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
Lantus® | 1,391 | -9.8% | 4,251 | -10.7% |
Toujeo® | 167 | 265.2% | 411 | ns |
Total glargine | 1,558 | -1.9% | 4,662 | -3.5% |
Amaryl® | 92 | +1.1% | 273 | -4.7% |
Apidra® | 94 | +6.8% | 272 | +2.2% |
Insuman® | 32 | -8.3% | 98 | 0.0% |
BGM (Blood Glucose Monitoring) | 16 | +6.7% | 50 | +6.4% |
Lyxumia® | 9 | -11.1% | 26 | -3.7% |
Total Diabetes | 1,805 | -1.5% | 5,396 | -3.0%(a) |
(a) Excluding Venezuela: -2.3%;
In the third quarter, Diabetes franchise sales were down 1.5% to €1,805 million, reflecting lower sales of Lantus® in the U.S. Third-quarter U.S. Diabetes sales were down 5.4% to €1,013 million. Outside the U.S., sales were €792 million, an increase of 3.9% driven by Emerging Markets (up 13.6% to €341 million). Sales in Europe were €325 million, a decrease of 0.6%. In Europe, sales of Toujeo® offset lower sales of Lantus®. Year-to-date sales for the Diabetes franchise were €5,396 million, down 3.0%.
Third-quarter sales of Sanofi's glargine (Lantus® and Toujeo®) were €1,558 million, down 1.9%. In the U.S., Sanofi's glargine sales of €980 million were down 5.1%. In Europe, sales of Sanofi's glargine increased 0.4% to €248 million despite the launch of a biosimilar glargine in several European markets. Year-to-date sales of Sanofi's glargine were €4,662 million, down 3.5%.
Over the quarter, sales of Lantus® were €1,391 million down 9.8%. In the U.S., as anticipated, sales of Lantus® decreased 13.5% to €858 million mainly reflecting lower average net price and patients switching to Toujeo®. In Europe, third-quarter Lantus® sales were €215 million (down 11.0%) while in Emerging Markets, sales were €232 million (up 13.4%) driven by China and Russia. Year-to-date sales of Lantus® were €4,251 million, down 10.7%.
Third-quarter sales of Toujeo® were €167 million of which €122 million were recorded in the U.S. and €33 million were from Europe. The global roll-out of this product continues and Sanofi expects Toujeo® to be available in over 40 countries by the end of 2016. In Japan, the two-week prescription limit was lifted in September 2016, resulting in a significant increase in market share (9.2% the second week of October- IMS Market Share of the Basal insulin market in International Units). Year-to-date sales of Toujeo® were €411 million.
Sales of Amaryl® were €92 million, up 1.1% in the third quarter, of which €74 million were generated in Emerging Markets (up 6.8%). Year-to-date sales of Amaryl® were €273 million, down 4.7%.
Third-quarter sales of Apidra® were up 6.8% to €94 million, reflecting lower sales in the U.S. (down 8.8% to €31 million), which were more than offset by the performance in Emerging Markets (up 33.3% to €19 million) and Europe (up 10.0% to €32 million). Year-to-date sales of Apidra® increased 2.2% to €272 million.
Sanofi has recently been informed by U.S. payers of the 2017 formulary status for its products. Despite the anticipated introduction of biosimilar glargine, Lantus® and Toujeo® remain competitively positioned on the vast majority of formularies in the U.S. Given the recent performance of our diabetes franchise in the EU and Emerging Markets, as well as the aforementioned coverage in the U.S., Sanofi continues to expect global diabetes sales over the period from 2015 to 2018 to decline at an average annualized rate of between 4% and 8% at CER.
Cardiovascular franchise
Praluent® (alirocumab, collaboration with Regeneron) was launched in the U.S. and in a number of European markets in 2015 and 2016. Third-quarter sales of Praluent® were €35 million of which €28 million were in the U.S. and €6 million in Europe. Praluent® was launched in Japan in July. Year-to-date sales of Praluent® were €68 million reflecting significant payer utilization management restrictions in the U.S. and limited market access in Europe.
Third-quarter sales and first nine-month sales of Multaq® were €89 million (up 3.5%) and €259 million (up 1.6%), respectively. In August 2016, the District Court of Delaware ruled in favor of Sanofi in the Multaq® patent litigation holding that the defendants infringe both of the patents at suit; the '800 Formulation patent and the 167 Method of Use patent, expiring in 2018 and 2029, respectively. Both defendants appealed that ruling in September.
Established Rx Products
Net sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
Plavix® | 401 | -9.9% | 1,181 | -18.5%(b) |
Lovenox® | 404 | -4.0% | 1,222 | -2.5%(c) |
Renvela®/Renagel® | 245 | +2.9% | 687 | -0.6% |
Aprovel®/Avapro® | 174 | +7.2% | 518 | -8.4%(d) |
Synvisc® /Synvisc-One® | 100 | +4.2% | 297 | +1.3% |
Myslee®/Ambien®/Stilnox® | 77 | +1.4% | 225 | +0.5% |
Allegra® | 31 | -18.2% | 145 | -10.0% |
Other | 1,103 | -12.7% | 3,468 | -9.3%(e) |
Total Established Rx Products | 2,535 | -7.4%(a) | 7,743 | -8.5%(f) |
(a) Excluding Venezuela: -6.9%; (b) Excluding Venezuela: -16.3%; (c) Excluding Venezuela: -1.7%; (d) Excluding Venezuela: -0.4%; (e) Excluding Venezuela: -6.5%; (f) Excluding Venezuela: -6.1%;
Third-quarter sales of Established Rx Products decreased 7.4% to €2,535 million, reflecting generic competition to Plavix® in Japan, the impact of the termination of Auvi-Q® commercialization in the U.S. and lower sales in Venezuela. Excluding Venezuela and Auvi-Q®, sales of Established Rx Products were down 4.8%. In Emerging Markets, sales of Established Rx Products were €948 million, up 1.7% (up 3.4% excluding Venezuela). In the U.S., sales of Established Rx Products were down 13.2% (to €375 million). Excluding Auvi-Q®, sales of Established Rx Products were down 0.5% in the U.S. In Europe, sales of Established Rx Products decreased 7.6% to €856 million. Year-to-date sales of Established Rx Products decreased 8.5% to €7,743 million and 6.1% excluding Venezuela.
In the third quarter, sales of Lovenox® decreased 4.0% to €404 million reflecting generic competition in the U.S. (down 25.0% to € 12 million) and lower sales in Europe (down 2.3% to €248 million) and in Emerging Markets (down 3.1% to €120 million). In September, two enoxaparin biosimilars were approved in the European Union. Year-to-date sales of Lovenox® were €1,222 million down 2.5%.
Third-quarter sales of Plavix® decreased 9.9% to €401 million due to generic competition in Japan that started in June 2015 (sales in Japan were down 48.3% to €88 million), which was partially offset by the growth in China (up 18.1% to €190 million). Year-to-date sales of Plavix® decreased 18.5% to €1,181 million (16.3% excluding Venezuela).
Sales of Renvela®/Renagel® were up 2.9% to €245 million in the third quarter driven by the U.S. (€206 million, up 8.4%). In Europe, sales of Renvela®/Renagel® were down 27.6% to €20 million due to generics competition. Sanofi now expects generic competition in the U.S. in the first half of 2017. Year-to-date sales of Renvela®/Renagel® decreased 0.6% to €687 million.
Sales of Aprovel®/Avapro® increased 7.2% to €174 million in the third quarter. Year-to-date sales of Aprovel®/Avapro® decreased 8.4% to €518 million (stable excluding Venezuela).
In the third quarter and the first nine months of 2015, sales of Auvi-Q® and Allerject® were €61 million and €113 million, respectively. Sanofi no longer commercializes this product and no sales were recorded in 2016.
Consumer Healthcare
Net sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
Allegra® | 94 | +3.3% | 331 | -2.9% |
Doliprane® | 69 | +7.7% | 223 | +2.3% |
Enterogermina® | 38 | +18.2% | 123 | +2.4% |
Essentiale® | 29 | -30.4% | 100 | -22.0% |
Nasacort® | 23 | -14.8% | 91 | -8.9% |
Lactacyd® | 20 | -23.1% | 61 | -29.8% |
Maalox® | 18 | -9.5% | 63 | -10.7% |
No Spa® | 22 | 4.5% | 62 | +3.0% |
Magne B6® | 19 | -9.5% | 55 | -6.5% |
Dorflex® | 21 | -4.8% | 55 | -3.1% |
Other CHC Products | 438 | +0.9% | 1,332 | +0.3% |
Total Consumer Healthcare | 791 | -1.2%(a) | 2,496 | -2.9%(b) |
(a) Excluding Venezuela: -1.0%; (b) Excluding Venezuela: +0.7%;
In the third-quarter, Consumer Healthcare (CHC) sales were €791 million, down 1.2%. Excluding Venezuela and the divestiture of smaller products, CHC sales decreased 0.1% impacted by Russia. Third-quarter sales of CHC in the U.S. increased 3.3% to €216 million. This was driven by a solid performance across the portfolio partially offset by Allegra® (up 1.9% to €54 million) and Nasacort® (down 20.8% to €19 million), which were both impacted by a mild U.S. allergy season. In addition, Nasacort® is facing an increasingly competitive environment.
In Emerging Markets, sales were down 4.7% to €312 million (down 4.1% excluding Venezuela) reflecting lower sales in Russia. In Russia, sales were significantly impacted by the challenging local economic situation. In the quarter, sales in Europe decreased 1.5% to €195 million reflecting the divestitures of small products and the solid performance of Doliprane® (up 9.4% to €58 million). Year-to-date sales of CHC reached €2,496 million, down 2.9% (up 2.3% excluding Venezuela and the divestiture of several small products).
Sanofi continues to expect the exchange of Sanofi's animal health business with Boehringer Ingelheim's consumer healthcare business (initiated in December 2015 and signed in June 2016) to close around year-end 2016, subject to approval by regulatory authorities in different territories.
Generics
Third-quarter sales of Generics increased 1.3% to €453 million (up 2.2% excluding Venezuela) driven by the U.S. (up 8.3% to €38 million) and Europe (up 2.0% to €197 million), which more than offset the slight decrease in Emerging Markets (down 0.5% to €196 million). Year-to-date sales of Generics were up 0.8% to €1,386 million (up 3.0% excluding Venezuela).
As announced in our 2020 strategic roadmap, Sanofi has carefully reviewed all options and has decided to initiate a carve-out process in order to divest its Generics business in Europe. Sanofi will be looking for a potential acquirer that will leverage the mid and long-term sustainable growth opportunities for this business. Sanofi confirms its commitment to its Generics business in other parts of the world and will further focus on the Emerging Markets in order to develop its business in those countries.
Vaccines
Net sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
Polio/Pertussis/Hib vaccines (incl. Pentacel®, Pentaxim® and Imovax®) | 324 | -0.3% | 951 | +10.7% |
Meningitis/Pneumonia vaccines (incl. Menactra®) | 254 | -1.5% | 515 | +4.2% |
Adult Booster vaccines (incl. Adacel ®) | 104 | -21.1% | 288 | -15.6% |
Influenza vaccines (incl. Vaxigrip® and Fluzone®) | 989 | +34.6% | 1,105 | +28.0% |
Travel and other endemic vaccines | 77 | -18.8% | 261 | -2.5% |
Dengvaxia® | 30 | - | 50 | |
Other vaccines | 25 | -24.1% | 55 | -30.8% |
Total Vaccines (consolidated sales) | 1,803 | +14.4% | 3,225 | +11.0%*(a) |
*Comparability based on the new presentation of VaxServe sales (see below)
(a) Excluding Venezuela: +11.3%;
VaxServe sales
VaxServe is a U.S. entity of the Vaccines segment. VaxServe activities include products distribution in the U.S. in channels that are not the primary focus of Sanofi Pasteur. VaxServe complements its Sanofi Pasteur products offering by distributing vaccines and other products from third party manufacturers. All VaxServe sales were reported on the line Net sales in the past.
In order to provide more relevant published information, VaxServe sales of non-Sanofi products are reported in the line Other revenues in the income statement from January 1, 2016. Accordingly, prior period comparative net sales have been reclassified to the line Other revenues.
The 2015 quarterly and full-year 2015 business P&L as well as sales of GBUs and franchises by geographic region reflecting this reclassification are available on the Investors section of Sanofi's website.
In the third quarter of 2015 and in full-year 2015, sales of VaxServe(8) of non-Sanofi products were €136 million and €482 million, respectively.
Vaccines
In the third quarter, consolidated Vaccines sales increased 14.4% to €1,803 million driven by the U.S (up 19.1% to €1,261 million) supported by the flu vaccines franchise. In Emerging Markets sales of vaccines increased 6.6% driven by the solid performance of our AcXim family (excluding China) and the launch of Dengvaxia® partially offset by a local market disruption in China. Year-to-date sales of Sanofi Pasteur were up 11.0% to €3,225 million.
Third quarter sales of Polio/Pertussis/Hib Vaccines were down slightly (0.3%) to €324 million. In Emerging Markets, sales of the franchise decreased 2.2% to €170 million impacted by the local market disruption in China resulting in lower sales of Pentaxim® and Polio vaccines and offsetting the growth of Pentaxim® and Hexaxim® in other regions. In the U.S., sales of Polio/Pertussis/Hib Vaccines decreased 8.0% to €91 million reflecting lower sales of Pentacel® (down 18.9% to €61 million). As previously communicated, Sanofi Pasteur is experiencing Pentacel® manufacturing delays and supply is expected to improve by late fourth quarter 2016. Year-to-date sales of Polio/Pertussis/Hib vaccines were up 10.7% to €951 million.
Dengvaxia®, the world's first dengue vaccine is now approved in 13 countries (Bolivia, Brazil, Cambodia, Costa Rica, El Salvador, Guatemala, Indonesia, Mexico, Paraguay, Peru, the Philippines, Thailand, and Singapore). In the third quarter of 2016, sales of Dengvaxia® were €30 million reflecting the second shipment for the public dengue immunization program in the Philippines, the first dose of the public vaccination program in Paraná State in Brazil, as well as sales on the private market. Year-to-date sales of Dengvaxia® were €50 million.
Sales of Influenza vaccines increased 34.6% to €989 million in the third quarter, driven by the U.S. (up 45.0% to €834 million) reflecting favorable phasing as well as Sanofi Pasteur's strategy to offer differentiated influenza vaccines. Year-to-date sales of Influenza vaccines were up 28.0% to €1,105 million.
Third-quarter Menactra® sales were up 1.7% to €242 million, of which €219 million was generated in the U.S (down 1.3%). Year-to-date sales of Menactra® increased 5.7% to €479 million.
Adult Booster vaccines sales decreased 21.1% to €104 million in the third quarter, impacted by increased competitive pressure in the U.S. towards Adacel® and a contraction of the U.S. Tdap (Tetanus, Diphtheria, acellular Pertussis) market. Year-to-date sales of Adult Booster vaccines decreased 15.6% to €288 million.
(8) Sales of VaxServe in Q3 2016 and in the first nine month of 2016 are provided in the Financial Results
Third-quarter sales of Travel and other endemic vaccines were €77 million, down 18.8% due to a supply constraint for rabies and hepatitis A vaccines. Year-to-date sales of Travel and other endemic vaccines decreased 2.5% to €261 million.
Sales of Sanofi Pasteur MSD (not consolidated), the joint venture with Merck & Co. in Europe, increased 5.2% (on a reported basis) to €299 million driven by Hexyon® (pediatric hexavalent vaccine) and Gardasil®. Year-to-date sales of Sanofi Pasteur MSD were up 9.4% (on a reported basis) to €639 million. In March, Sanofi Pasteur and Merck announced their intent to end their joint vaccines operations in Europe, Sanofi Pasteur MSD, to pursue their own distinct growth strategies in Europe. Sanofi Pasteur and Merck expect the separation to be completed by the end of 2016, subject to local labor laws and regulations as well as regulatory approvals.
Animal Health(9)
Net sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
Companion Animal | 400 | +0.7% | 1,422 | +10.1% |
Production Animal | 224 | +10.2% | 687 | +10.8% |
Total Animal Health | 624 | +4.0% | 2,109 | +10.3% |
of which vaccines | 202 | +3.0% | 619 | +8.5% |
of which fipronil products | 112 | -17.4% | 462 | -10.1% |
of which avermectin products | 111 | -4.3% | 423 | +6.2% |
In the third quarter, Animal Health sales increased 4.0% to €624 million driven by strong performance of Ruminant business in the U.S. and NexGard®. Year-to-date sales of Animal Health were up 10.3% to €2,109 million.
Third-quarter sales of the Companion Animals segment were up 0.7% to €400 million reflecting the strong performance of NexGard® (Merial's next generation flea and tick products for dogs in the U.S.) and NexGard® Spectra as well as lower sales of the Frontline® family of products and HeartGard® mostly linked to phasing of promotional activities. Year-to-date sales of the Companion Animals segment were up 10.1% to €1,422 million.
Sales of the Production Animals segment were up 10.2% to €224 million in the third quarter due to strong performance of Ruminant business in the U.S. Year-to-date sales of the Production Animals segment were up 10.8% to €687 million.
Aggregate Company sales by geographic region
Aggregate Sanofi sales (€ million) | Q3 2016 | Change (CER) | 9M 2016 | Change (CER) |
United States | 4,001 | +7.0% | 10,085 | +3.5% |
Emerging Markets(a) | 2,548 | +5.6% | 7,455 | +3.0% |
of which Latin America | 714 | +8.5% | 1,983 | -8.5% |
of which Asia | 853 | +4.0% | 2,490 | +8.0% |
of which Africa, Middle East and South Asia(b) | 699 | +8.1% | 2,103 | +10.0% |
of which Eurasia(c) | 251 | -1.1% | 780 | +4.4% |
Europe(d) | 2,264 | -0.5% | 6,996 | +1.5% |
Rest of the World(e) | 839 | -12.2% | 2,527 | -12.6% |
of which Japan | 421 | -21.4% | 1,314 | -23.9% |
Total Aggregate Sanofi sales | 9,652 | +3.0% | 27,063 | +1.2% |
(a) World excluding U.S., Canada, Western & Eastern Europe (except Eurasia), Japan, South Korea, Australia, New Zealand and Puerto Rico
(b) India, Pakistan, Bangladesh, Sri Lanka
(c) Russia, Ukraine, Georgia, Belarus, Armenia and Turkey
(d) Western Europe + Eastern Europe except Eurasia
(e) Japan, South Korea, Canada, Australia, New Zealand, Puerto Rico
Third-quarter Aggregate sales in the U.S. grew 7.0% to €4,001 million driven mainly by double digit growth of the multiple sclerosis franchise (up 54.0%), rare disease franchise (up 10.7%) and Vaccines (up 19.1%). The U.S. sales performance also included lower sales of the diabetes franchise (down 5.4%), and the withdrawal of Auvi-Q® from the market in the fourth quarter of 2015. Year-to-date sales in the U.S. increased 3.5% to €10,085 million.
(9) Merial is reported on a single line in the consolidated income statements in accordance with IFRS 5 (Non-current assets held for sale and discontinued operations). As of September 30,2016, Sanofi continues to report the performance of Merial, which remained an operating segment consistent with IFRS 8.
Aggregate sales in Emerging Markets increased 5.6% to €2,548 million in the third quarter (up 6.6% excluding Venezuela) driven by Rare Disease (up 41.5%), Diabetes (up 13.6%) and Animal Health (up 13.3%). In the Asia region, Aggregate sales grew 4.0% to €853 million in the third quarter reflecting lower sales in China (down 1.5% to €551 million), where the local vaccines market disruption offset the strong performance of Pharmaceuticals (up 13.6%). In Latin America, third-quarter Aggregate sales increased 8.5% to €714 million (up 12.3% excluding Venezuela) driven by sales in Argentina, Mexico and Brazil. Aggregate sales in Brazil increased 4.4% to €302 million driven by the strong performance of rare diseases and the contribution of Dengvaxia®. Aggregate sales in the Eurasia region were down 1.1% to €251 million reflecting lower sales in Russia (down 18.2% to €110 million) despite strong performance in Turkey. Sales in Russia were impacted by lower CHC sales which more than offset the strong performance of diabetes and Established products. In Africa, the Middle-East and South Asia, Aggregate sales were up 8.1% to €699 million sustained by Middle-East (up 10.1%) and India. Year-to-date sales in Emerging Markets increased 3.0% to €7,455 million. Excluding Venezuela, Aggregate year-to-date sales in Emerging Markets grew 8.7%.
Third-quarter Aggregate sales in Europe decreased 0.5% to €2,264 million. The performance of Multiple Sclerosis (up 53.3%) and Rare Disease (up 8.3%) were offset by lower sales of Established products (-7.6%). In Europe, year-to-date sales increased 1.5% to €6,996 million.
Aggregate third-quarter sales in Japan decreased 21.4% to €421 million, impacted by generic Plavix® competition (down 48.3%). In Japan, year-to-date sales decreased 23.9% to €1,314 million.
R&D update
Consult Appendix 6 for full overview of Sanofi's R&D pipeline |
Regulatory update
Regulatory updates since the publication of the second quarter results on July 29, 2016 include the following:
At the end of October 2016, the R&D pipeline contained 43 pharmaceutical new molecular entities (excluding Life Cycle Management) and vaccine candidates in clinical development of which 12 are in Phase III or have been submitted to the regulatory authorities for approval.
Portfolio update
Phase III:
Phase II:
Phase I:
Collaboration
2016 third-quarter and first nine months Aggregate financial results(10)
Business Net Income(10)
In the third quarter of 2016, Sanofi generated Aggregate sales of €9,652 million, an increase of 2.1% (up 3.0% at CER). Year-to-date Aggregate sales were €27,063 million, down 1.3% (up 1.2% at CER).
Aggregate other revenues increased 22.7% to €276 million and include VaxServe sales of non-Sanofi products (up 38.2% to €188 million) following the change in presentation as of January 1, 2016(11). Year-to-date Aggregate other revenues increased 1.0% to €604 million of which €360 million were generated by VaxServe (up 4.0%)
Third-quarter Aggregate gross profit increased 3.8% to €6,933 million and 4.6% at CER. The Aggregate gross margin ratio improved by 1.1 percentage points to 71.8% versus the third quarter of 2015. The positive impact from the multiple sclerosis and rare disease franchises, pharmaceuticals in China and industrial productivity largely offset the negative impact of U.S. Diabetes, and Plavix® generic competition in Japan. Sanofi now expects its 2016 Aggregate gross margin ratio to be around 70% at CER. Year-to-date Aggregate gross margin ratio improved by 0.6 percentage points to 71.0% versus the first nine months of 2015.
Aggregate Research and Development expenses decreased 6.5% to €1,267 million, (down 6.4% at CER) in the third quarter. This decrease reflected lower spend on Praluent and dupilumab combined with cost containment actions. In the first nine months of 2016, the ratio of Aggregate R&D to Aggregate sales was 0.3 percentage points higher at 14.3% compared to the same period of 2015.
Aggregate selling general and administrative expenses (SG&A) increased 1.1% to €2,489 million in the third quarter. At CER, Aggregate SG&A was up 1.8% mainly reflecting pre-launch costs for sarilumab and dupilumab and the costs related to an earlier Flu campaign in the U.S. General & Administrative expenses decreased 2.4% at CER largely due to cost savings initiatives. The ratio of Aggregate SG&A to Aggregate sales decreased 0.2 percentage points to 25.8% compared with the third quarter of 2015. In the first nine months of 2016, the ratio of Aggregate selling and general expenses to Aggregate sales was 0.4 percentage points higher at 27.9% compared with the first nine months of 2015.
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