French drug giant Sanofi SA (SNYNF, SNY) reported Wednesday a sharp decline in fourth-quarter profit amid weak net sales. Further, the company lifted its dividend. Looking ahead, Sanofi expects fiscal 2018 business earnings per share to grow between 2 percent and 5 percent at constant exchange rates, including the anticipated contribution from the recently announced acquisitions.
Sanofi Chief Executive Officer, Olivier Brandicourt, said, "In 2017, we continued to execute on our strategic goals with the strong launch of Dupixent®, the positive pivotal data for cemiplimab and for dupilumab in asthma. At the same time, we managed the challenges in U.S. diabetes as well as the impact from sevelamer generics and Dengvaxia...... Overall, after a period of significant reshaping since 2015, we are positioned to drive growth in 2018."
For the fourth quarter, IFRS net income declined 83.7 percent to 129 million euros from 790 million euros last year. Earnings per share were 0.10 euro, down from 0.62 euro a year ago.
Business net income was 1.33 billion euros or 1.06 euros per share, compared to 1.61 billion euros or 1.25 euros per share a year ago.
In the quarter, business operating income decreased 20.4 percent from last year to 1.69 billion euros. Business operating income margin fell 4.5 percentage points to 19.5 percent.
Gross profit decreased 5.4 percent to 5.88 billion euros and gross margin ratio was 67.7 percent versus 70.2 percent a year ago.
IFRS net sales declined 2 percent to 8.691 billion euros from 8.867 billion euros last year as strong Dupixent launch was offset by anticipated declines in U.S. diabetes and Renagel.
Net sales grew 4.1 percent at constant exchange rates, benefited from the acquisition of Boehringer Ingelheim's CHC business and full consolidation of Sanofi's European vaccines operations.
At CER and CS, company sales were down 1.6 percent.
Fourth-quarter Pharmaceutical sales were down 2.8 percent to 7.31 billion euros, but was up 3.3 percent at CER. At CS, Pharmaceutical sales were down 2.1 percent primarily due to Diabetes and Established Rx Products.
Sanofi Genzyme sales grew 16.8 percent at CER, driven by contribution from new immunology franchise. Sanofi Pasteur sales increased 1.2 percent at CER/CS impacted by order phasing effects and Dengvaxia.
Global Diabetes sales decreased 15.6 percent to 1.53 billion euros, reflecting lower Sanofi glargine sales in the U.S. In the fourth quarter, U.S. Diabetes sales were down 29.5 percent reflecting exclusions from commercial formularies at CVS and UnitedHealthcare as well as a high basis of comparison in the fourth quarter of 2016.
Emerging Markets sales increased 2.1 percent at CER/CS.
The company's board proposed dividend of 3.03 euros, an increase of 2.4 percent.
In Paris, Sanofi shares were trading at 67.75 euros, up 0.34 percent.
by RTTNews Staff Writer
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