Industry Overview - The second-quarter earnings season for the drug and biotech sector is in full swing, with major companies like Pfizer, Eli Lilly, Amgen, Gilead Sciences, and Novo Nordisk set to announce results [1] - The earnings season began mid-July with Johnson & Johnson reporting strong results, exceeding estimates for both earnings and sales [1] Company Performance Pfizer (PFE) - Pfizer has consistently exceeded earnings expectations in the last four quarters, with an average earnings surprise of 43.49% [6] - The Zacks Consensus Estimate for second-quarter sales and earnings is $13.78 billion and 58 cents per share, respectively [6] - Higher sales from products like Vyndaqel and Padcev are expected to offset weaker sales from Prevnar and Ibrance [8] Eli Lilly (LLY) - Eli Lilly's performance has been mixed, exceeding earnings expectations in two of the last four quarters, with an average earnings surprise of 6.69% [11] - The Zacks Consensus Estimate for second-quarter sales and earnings stands at $14.75 billion and $5.61 per share, respectively [11] - Strong demand for Mounjaro and Zepbound is anticipated to drive top-line growth [12] Amgen (AMGN) - Amgen has shown strong performance, beating earnings estimates in each of the last four quarters, with an average earnings surprise of 8.34% [14] - The Zacks Consensus Estimate for second-quarter sales and earnings is $8.86 billion and $5.26 per share, respectively [14] - Sales growth is expected to be driven by products like Evenity and Repatha, despite price declines due to higher rebates [15] Gilead Sciences (GILD) - Gilead's performance has been mixed, with earnings beating estimates in three of the last four quarters, averaging a surprise of 16.48% [17] - The Zacks Consensus Estimate for second-quarter sales and earnings is $6.95 billion and $1.95 per share, respectively [17] - Increased demand for HIV therapies like Biktarvy is expected to boost sales [18] Novo Nordisk (NVO) - Novo Nordisk's performance has been mixed, with earnings beating estimates in one of the last four quarters, delivering an average surprise of 0.02% [20] - The Zacks Consensus Estimate for second-quarter sales and earnings is $11.79 billion and 93 cents per share, respectively [20] - The company lowered its 2025 sales and operating profit growth outlook due to weaker momentum in key markets for its semaglutide-based drugs [21]

Core Viewpoint - Sanofi's new lipid-lowering drug, Praluent (alirocumab injection), will cease promotion and gradually exit the Chinese market due to global supply issues and strategic adjustments in the cardiovascular market [1][2]. Group 1: Product and Market Dynamics - Praluent was approved in China in December 2019 for the prevention of cardiovascular events in adults with atherosclerotic cardiovascular disease (ASCVD) and for lowering LDL cholesterol in patients with primary hypercholesterolemia [2]. - The drug was included in the National Medical Insurance catalog in 2021, with its price reduced from 1982 yuan to 306 yuan per injection, a decrease of over 80% [2]. - Despite its initial success, Praluent faced intense competition from domestic PCSK9 inhibitors, leading to its decision to exit the market [2][4]. Group 2: Competitive Landscape - The Chinese PCSK9 market is expected to exceed 10 billion yuan by 2030, with multiple domestic competitors entering the space [5]. - Currently, there are seven approved PCSK9 products in China, with four being domestic drugs. Following Praluent's exit, the remaining six products will compete for market share [5][6]. - Competitors like Amgen's Repatha and Novartis' Leqvio have shown strong market performance, with Leqvio achieving sales of $333 million in the first half of 2024 [6]. Group 3: Future Opportunities - The exit of Praluent presents an opportunity for domestic pharmaceutical companies to expand their market share and accelerate product promotion [7]. - Analysts suggest that the competition will drive innovation, leading to the development of more effective and affordable lipid-lowering products [7]. - The stock prices of domestic companies, such as Jingxin Pharmaceutical, have risen in response to Praluent's withdrawal, indicating investor confidence in the potential for domestic alternatives [7].

Core Viewpoint - Sanofi has ceased the supply of its new lipid-lowering drug, Praluent (alirocumab injection), in the Chinese market due to global supply issues and a strategic shift in its cardiovascular market approach [1][4]. Company Summary - Sanofi has officially notified multiple hospitals about the discontinuation of Praluent in China [2]. - Praluent is a PCSK9 inhibitor used for the prevention of cardiovascular events and treatment of primary hypercholesterolemia and mixed dyslipidemia. It was one of the first PCSK9 monoclonal antibodies approved globally, receiving approval in the U.S. in 2015 and entering the Chinese market in 2020 [4]. - The price of Praluent in China was significantly reduced from 1982 RMB to 306 RMB per injection after being included in the national medical insurance [4]. - Despite the withdrawal of Praluent, Sanofi plans to fill the gap in its cardiovascular pipeline by acquiring exclusive rights to Aficamten, a new cardiac myosin inhibitor, in Greater China, and has also secured rights to another investigational drug, Plerixafor [4][5]. Industry Summary - There are currently seven approved PCSK9-targeted products in China, including three from multinational companies and four from domestic firms. The other products include those from Amgen, Novartis, and Innovent Biologics [7]. - Amgen's Repatha (evolocumab) and Innovent's Xinbile (torcetrapib) are among the alternatives available to patients following Praluent's exit [7]. - Sanofi's recent financial report indicated a revenue of 10 billion euros (approximately 11.4 billion USD) for Q2, with a 10.1% growth, and a total revenue of 19.889 billion euros (approximately 22.8 billion USD) for the first half of the year, reflecting a 9.9% increase [8].

Core Insights - The appointment of a local president for Sanofi China marks a significant shift in the company's strategy, reflecting the importance of the Chinese market as the second largest after the US [1] - Since the appointment, Sanofi has seen a dramatic increase in innovation metrics in China, including a sixfold increase in new drug applications and a tenfold increase in the global share of new drug pipelines [1] - The Chinese healthcare reform, particularly since the establishment of the National Healthcare Security Administration in 2018, has focused on cost-saving measures to support innovative drug payments [1] Market Dynamics - Sanofi has actively pursued acquisitions to enhance its product offerings, including recent agreements to acquire rights for innovative drugs in the cardiovascular and metabolic fields [2] - The aging population in China presents significant challenges, with chronic diseases becoming more prevalent, necessitating a strategic focus on meeting patient needs [2][3] - The company has gained the authority to independently purchase drug pipelines, a first for any country market within Sanofi, indicating the growing importance of China in the global pharmaceutical landscape [6] Innovation Strategy - Innovation is a central theme in Sanofi's strategy, with a focus on aligning product development with China's healthcare policies and disease challenges outlined in the "Healthy China 2030" plan [7][12] - The company is shifting its approach to pipeline acquisitions, now willing to invest in early to mid-stage assets, reflecting increased confidence in China's innovation capabilities [8] - Sanofi's participation in both national negotiations and centralized procurement demonstrates a unique strategy that balances immediate market needs with long-term innovation goals [9][11] Future Outlook - The potential for commercial health insurance in China is significant, with expectations that its share of total medical expenses could double in the next five years [14] - The Chinese pharmaceutical market is expected to see a substantial increase in innovative drug pipelines, with predictions that over 30% of global innovations may originate from China in the next five years [16][17] - The integration of AI in drug development and decision-making processes is anticipated to enhance efficiency and innovation in the pharmaceutical sector [19]

Core Viewpoint - Sanofi is rapidly filling its cardiovascular product pipeline through acquisitions while planning to exit the Chinese market for its cholesterol-lowering drug, Praluent (alirocumab) due to increased competition from domestic PCSK9 inhibitors and supply challenges [1][2][4]. Group 1: Market Strategy - Sanofi is optimizing its cardiovascular market strategy by discontinuing the promotion of Praluent in China, which is influenced by the inclusion of more domestic PCSK9 inhibitors in the National Medical Insurance Drug List by 2025 [1][2]. - The company confirmed the exit of Praluent from the Chinese market, citing both competitive and supply chain challenges [1][4]. Group 2: Product Pipeline - Sanofi has acquired rights to develop and commercialize the investigational drug, Patisiran sodium injection, in Greater China, which targets conditions like familial chylomicronemia syndrome and severe hypertriglyceridemia [5]. - Earlier, Sanofi also announced the acquisition of exclusive rights to develop and commercialize Aficamten in Greater China, a new generation selective small molecule cardiac myosin inhibitor [5].

Core Viewpoint - Sanofi has confirmed the cessation of the supply of its drug, Praluent (alirocumab injection), in the Chinese market due to global supply issues and a strategic upgrade in its cardiovascular product offerings in China [1] Group 1: Supply and Strategic Changes - The decision to stop supplying Praluent is attributed to global supply challenges [1] - Sanofi is upgrading its cardiovascular product strategy in China, which includes a partnership with Jinxing Pharmaceutical for Aficamten and acquiring rights for the investigational drug, Plerixafor [1] - The company emphasizes its commitment to continue providing a range of products to meet the needs of domestic patients [1]

Core Insights - Regeneron Pharmaceuticals reported strong financial results for Q2 2025, with notable growth in U.S. sales of EYLEA HD and global sales of Dupixent and Libtayo, alongside multiple regulatory approvals [2][3][5] Financial Highlights - Total revenues for Q2 2025 reached $3.68 billion, a 4% increase from $3.55 billion in Q2 2024 [3][12] - GAAP net income was $1.39 billion, down 3% from $1.43 billion in the same quarter last year, while non-GAAP net income increased by 5% to $1.42 billion [3][12] - Non-GAAP net income per share rose 12% to $12.89, compared to $11.56 in Q2 2024 [3][12] Business Highlights - Dupixent global net sales increased by 22% to $4.34 billion, while EYLEA HD U.S. net sales grew by 29% to $393 million [5][12] - The FDA approved Lynozyfic for relapsed or refractory multiple myeloma and Dupixent for bullous pemphigoid and chronic spontaneous urticaria [5][10] - The company has approximately 45 product candidates in clinical development, with significant progress in its oncology portfolio [4][5] Regulatory and Pipeline Updates - The FDA accepted for priority review Libtayo's supplemental Biologics License Application for adjuvant cutaneous squamous cell carcinoma, with a target action date in October 2025 [10][11] - The company reported interim results from the Phase 2 COURAGE trial, showing promising data for obesity treatment [10][11] Capital Allocation - Regeneron returned over $2.3 billion to shareholders through share repurchases and dividends, while committing over $7 billion to U.S. manufacturing investments and business development since the start of 2025 [3][23] - A cash dividend of $0.88 per share was declared, payable on September 3, 2025 [24]

Company Overview - Sanofi is an R&D driven, AI-powered biopharma company focused on improving people's lives and delivering growth [3] - The company utilizes its deep understanding of the immune system to develop medicines and vaccines that benefit millions globally [3] - Sanofi is committed to addressing urgent healthcare, environmental, and societal challenges [3] Financial Reporting - Sanofi's half-year financial report for the period ending June 30, 2025, is now available [1] - The report has been filed with the French market regulator Autorité des marchés financiers (AMF) and submitted to the U.S. Securities and Exchange Commission (SEC) under form 6-K [1] Accessibility - The financial report can be found on Sanofi's corporate website and downloaded from the "Investors" page under "Regulated Information" [2]

Core Insights - Sanofi reported second-quarter 2025 adjusted earnings of $0.90 per share, missing the Zacks Consensus Estimate of $0.96 per share, while net sales rose 6% to $11.33 billion, also below the estimate of $11.53 billion [1][11] Financial Performance - Adjusted earnings per share were €1.59, reflecting a 1.9% increase on a reported basis and an 8.3% increase on a constant currency rate (CER) basis [1] - Net sales increased by 10.1% on a CER basis, with significant growth in the United States at 17.3%, 4.4% in the Rest of the World, and 3.0% in Europe [2] Product Performance - Dupixent sales reached €3.83 billion, up 21.1% year over year, driven by strong demand across all approved indications [3][5] - Altuviiio, a new treatment for hemophilia A, generated sales of €291 million, marking a significant increase from €251 million in the previous quarter [7] - Nexviazyme/Nexviadzyme sales were €192 million, up 17.3% year over year, while Myozyme sales declined by 19.4% to €140 million [9] Vaccine Sales - Total vaccine sales increased by 10.3% to €1.21 billion, driven by the rollout of Beyfortus [15] - Sales of flu vaccines rose 26.1% to €141 million, attributed to late-season immunizations [16] Guidance and Future Outlook - Sanofi raised its 2025 sales growth guidance to high single-digit growth at CER, up from mid-to-high single-digit expectations [18] - The company anticipates a low double-digit percentage growth in earnings at CER for 2025, including expenses from newly acquired businesses [19] Strategic Initiatives - Sanofi has been active in M&A, completing the acquisition of Blueprint Medicines and proposing to acquire Vigil Neuroscience and Vicebio Ltd to enhance its pipeline [26] - The company has a strong pipeline in immunology, rare diseases, and oncology, with three potential new drug launches expected this year [25][24]

[1. Condensed Half-Year Consolidated Financial Statements](index=2&type=section&id=1.%20Condensed%20half-year%20consolidated%20financial%20statements) Sanofi's condensed half-year consolidated financial statements for H1 2025 provide an overview of the company's financial position and performance [Consolidated Balance Sheets - Assets](index=2&type=section&id=Consolidated%20balance%20sheets%20-%20assets) Sanofi's consolidated assets decreased by June 30, 2025, driven by Opella asset reclassification, with a notable increase in cash and cash equivalents Consolidated Balance Sheet - Assets (June 30, 2025 vs. December 31, 2024) | (€ million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment owned | 9,574 | 10,091 | | Goodwill | 40,283 | 43,384 | | Other intangible assets | 20,431 | 22,629 | | Non-current assets | 87,942 | 90,210 | | Inventories | 9,618 | 9,431 | | Accounts receivable | 7,810 | 7,677 | | Cash and cash equivalents | 15,359 | 7,441 | | Assets held for sale | 238 | 13,489 | | Current assets | 37,017 | 42,588 | | **Total assets** | **124,959** | **132,798** | - Total assets decreased by **€7,839 million**, from **€132,798 million** at December 31, 2024, to **€124,959 million** at June 30, 2025[2](index=2&type=chunk) - Assets held for sale significantly decreased from **€13,489 million** to **€238 million**, reflecting the Opella transaction[2](index=2&type=chunk) [Consolidated Balance Sheets - Equity and Liabilities](index=3&type=section&id=Consolidated%20balance%20sheets%20-%20equity%20and%20liabilities) Sanofi's consolidated equity and liabilities decreased by June 30, 2025, consistent with asset reduction, influenced by Opella divestment and share repurchases Consolidated Balance Sheet - Equity and Liabilities (June 30, 2025 vs. December 31, 2024) | (€ million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity attributable to equity holders of Sanofi | 70,008 | 77,507 | | Total equity | 70,279 | 77,857 | | Long-term debt | 13,200 | 11,791 | | Non-current liabilities | 25,621 | 25,779 | | Accounts payable | 7,075 | 7,551 | | Short-term debt and current portion of long-term debt | 7,309 | 4,209 | | Liabilities related to assets held for sale | 2 | 2,131 | | Current liabilities | 29,059 | 29,162 | | **Total equity and liabilities** | **124,959** | **132,798** | - Total equity decreased by **€7,578 million**, from **€77,857 million** at December 31, 2024, to **€70,279 million** at June 30, 2025[4](index=4&type=chunk) - Liabilities related to assets held for sale decreased significantly from **€2,131 million** to **€2 million**[4](index=4&type=chunk) [Consolidated Income Statements](index=4&type=section&id=Consolidated%20income%20statements) Sanofi's H1 2025 net income surged, primarily from a significant gain on discontinued operations (Opella), complemented by growth in net sales and operating income Consolidated Income Statement (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Net sales | 19,889 | 18,360 | | Gross profit | 15,460 | 13,923 | | Operating income | 3,759 | 2,768 | | Income before tax and investments accounted for using the equity method | 3,582 | 2,462 | | Net income from continuing operations | 2,956 | 2,061 | | Net income from discontinued operations | 2,881 | 202 | | **Net income** | **5,837** | **2,263** | | Net income attributable to equity holders of Sanofi | 5,812 | 2,246 | | Basic earnings per share (€) | 4.74 | 1.80 | | Diluted earnings per share (€) | 4.72 | 1.79 | - Net income attributable to equity holders of Sanofi increased by **158.8%** from **€2,246 million** in H1 2024 to **€5,812 million** in H1 2025[6](index=6&type=chunk) - Net income from discontinued operations surged from **€202 million** in H1 2024 to **€2,881 million** in H1 2025[6](index=6&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20statements%20of%20comprehensive%20income) Sanofi's H1 2025 total comprehensive income decreased despite higher net income, primarily due to significant negative currency translation differences Consolidated Statements of Comprehensive Income (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Net income | 5,837 | 2,263 | | Subtotal: items not subsequently reclassifiable to profit or loss from continuing operations (A) | 241 | 166 | | Subtotal: items subsequently reclassifiable to profit or loss from continuing operations (B) | (5,318) | 1,067 | | Other comprehensive income/(loss) from continuing operations for the period, net of taxes (A+B) | (5,077) | 1,233 | | Other comprehensive income/(loss) for the period from discontinued operations, net of taxes (C) | 303 | (23) | | **Comprehensive income** | **1,063** | **3,496** | - Comprehensive income decreased by **69.6%** from **€3,496 million** in H1 2024 to **€1,063 million** in H1 2025[8](index=8&type=chunk) - Change in currency translation differences shifted from a gain of **€1,040 million** in H1 2024 to a loss of **€(5,203) million** in H1 2025[8](index=8&type=chunk) [Consolidated Statements of Changes in Equity](index=6&type=section&id=Consolidated%20statements%20of%20changes%20in%20equity) Total equity decreased from January 1 to June 30, 2025, driven by dividend payments and share repurchases, partially offset by net income Consolidated Statements of Changes in Equity (January 1, 2025 to June 30, 2025) | (€ million) | Balance at January 1, 2025 | Comprehensive income for the period | Dividend paid out of 2024 earnings | Share repurchase program | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity attributable to equity holders of Sanofi | 77,507 | 1,076 | (4,772) | (3,988) | 70,008 | | Equity attributable to non-controlling interests | 350 | (13) | (32) | — | 271 | | **Total equity** | **77,857** | **1,063** | **(4,772)** | **(3,988)** | **70,279** | - Total equity decreased from **€77,857 million** at January 1, 2025, to **€70,279 million** at June 30, 2025[11](index=11&type=chunk) - A dividend of **€4,772 million** (**€3.92 per share**) was paid out of 2024 earnings[11](index=11&type=chunk) [Consolidated Statement of Cash Flows](index=8&type=section&id=Consolidated%20statement%20of%20cash%20flows) Sanofi's H1 2025 cash and cash equivalents surged, driven by a substantial net cash inflow from the Opella divestment, despite increased financing cash usage Consolidated Statement of Cash Flows (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | 3,555 | 1,422 | | Net cash provided by/(used in) investing activities | 8,727 | (3,413) | | Net cash inflow from the Opella transaction | 10,742 | — | | Net cash provided by/(used in) financing activities | (4,489) | 89 | | Net change in cash and cash equivalents | 7,918 | (1,915) | | Cash and cash equivalents, end of period | 15,359 | 6,795 | - Net cash provided by operating activities increased by **150%** from **€1,422 million** in H1 2024 to **€3,555 million** in H1 2025[16](index=16&type=chunk) - Net cash provided by investing activities significantly improved from a net outflow of **€3,413 million** in H1 2024 to a net inflow of **€8,727 million** in H1 2025, largely due to the **€10,742 million** cash inflow from the Opella transaction[16](index=16&type=chunk) [Notes to the Condensed Half-Year Consolidated Financial Statements as of June 30, 2025](index=10&type=section&id=Notes%20to%20the%20condensed%20half-year%20consolidated%20financial%20statements%20as%20of%20June%2030%2C%202025) This section provides detailed notes to Sanofi's H1 2025 consolidated financial statements, including accounting policies, significant transactions, and other relevant information [Introduction](index=10&type=section&id=Introduction) Sanofi, a global healthcare leader, had its H1 2025 condensed consolidated financial statements reviewed by the Board on July 30, 2025 - Sanofi is a global healthcare leader engaged in the research, development, and marketing of therapeutic solutions[22](index=22&type=chunk) - The company is listed in Paris (Euronext: SAN) and New York (Nasdaq: SNY)[22](index=22&type=chunk) - The condensed consolidated financial statements for the six months ended June 30, 2025, were reviewed by the Sanofi Board of Directors on July 30, 2025[23](index=23&type=chunk) [A/ Basis of Preparation of the Half-Year Financial Statements and Accounting Policies](index=10&type=section&id=A%2F%20Basis%20of%20preparation%20of%20the%20half-year%20financial%20statements%20and%20accounting%20policies) This section details the basis for Sanofi's half-year financial statements, covering IAS 34, IFRS, estimates, hyperinflationary economies, fair value, and new IASB pronouncements [A.1. International Financial Reporting Standards (IFRS)](index=10&type=section&id=A.1.%20International%20financial%20reporting%20standards%20(IFRS)) This section details Sanofi's adherence to IFRS for its half-year consolidated financial statements, noting compliance with IAS 34 and IASB pronouncements - The half-year consolidated financial statements are prepared in condensed format in accordance with IAS 34 (Interim Financial Reporting)[24](index=24&type=chunk) - Accounting policies comply with IFRS as endorsed by the European Union and issued by the IASB, and are identical to those applied as of December 31, 2024[25](index=25&type=chunk) - The IASB amendment 'Lack of Exchangeability' (IAS 21), applicable from January 1, 2025, does not have a material impact on Sanofi's financial statements[26](index=26&type=chunk) [A.2. Use of Estimates and Judgments](index=10&type=section&id=A.2.%20Use%20of%20estimates%20and%20judgments) Financial statement preparation requires management estimates and assumptions, which may differ from actual results, particularly for income tax expense - The preparation of financial statements requires management to make reasonable estimates and assumptions, which may affect reported amounts and disclosures[28](index=28&type=chunk) - Actual results could differ from these estimates[29](index=29&type=chunk) - Income tax expense is determined based on an estimate of the effective tax rate for the full financial year, applied to business operating income[30](index=30&type=chunk) [A.3. Seasonal Trends](index=12&type=section&id=A.3.%20Seasonal%20trends) Sanofi's business activities are not subject to significant seasonal fluctuations - Sanofi's activities are not subject to significant seasonal fluctuations[32](index=32&type=chunk) [A.4. Consolidation and Foreign Currency Translation of Subsidiaries in Hyperinflationary Economies](index=12&type=section&id=A.4.%20Consolidation%20and%20foreign%20currency%20translation%20of%20the%20financial%20statements%20of%20subsidiaries%20in%20hyperinflationary%20economies) This section details consolidation and foreign currency translation for subsidiaries in hyperinflationary economies, including Venezuela, Argentina, and Turkey - Sanofi continues to use the full consolidation method for Venezuelan subsidiaries, with an immaterial contribution to consolidated financial statements[33](index=33&type=chunk) - Argentina has been treated as a hyperinflationary economy since July 1, 2018, and Turkey since January 1, 2022, with IAS 29 applied, and the impact of restatements is immaterial at the group level[34](index=34&type=chunk)[35](index=35&type=chunk) [A.5. Fair Value of Financial Instruments](index=12&type=section&id=A.5.%20Fair%20value%20of%20financial%20instruments) This section describes fair value measurement of financial instruments using a three-level hierarchy based on input observability, per IFRS 13 and IFRS 7 - Fair value measurements are classified using a three-level hierarchy based on input observability, as per IFRS 13 and IFRS 7[36](index=36&type=chunk) - Level 1 includes quoted prices in active markets for identical assets or liabilities[36](index=36&type=chunk) - Level 3 involves valuation techniques where not all important inputs are derived from observable market data, such as for unquoted equity instruments and contingent consideration receivable[36](index=36&type=chunk)[38](index=38&type=chunk) [A.6. New Pronouncements Issued by the IASB and Applicable from 2026](index=14&type=section&id=A.6.%20New%20pronouncements%20issued%20by%20the%20IASB%20and%20applicable%20from%202026) This section outlines new IASB pronouncements applicable from 2026, including IFRS 18 and amendments to IFRS 9 and IFRS 7, with no material impact expected - Sanofi will not early adopt IFRS 18 (Presentation and Disclosure in Financial Statements), applicable from January 1, 2027, and an impact assessment is underway[39](index=39&type=chunk) - Amendments to IFRS 9 and IFRS 7 (classification and measurement of financial instruments), applicable no earlier than January 1, 2026, are not expected to have a material impact, and Sanofi will not early adopt them[40](index=40&type=chunk) - Sanofi does not expect any material impact from 'Annual Improvements to IFRS' (Volume 11) or 'Contracts referencing nature-dependent electricity' amendments to IFRS 9 and IFRS 7, both applicable from January 1, 2026, and will not early adopt them[41](index=41&type=chunk)[42](index=42&type=chunk) [B/ Significant Information for the First Half of 2025](index=14&type=section&id=B%2F%20Significant%20information%20for%20the%20first%20half%20of%202025) This section details significant financial and operational events in H1 2025, covering major transactions, asset changes, equity, debt, litigation, revenue, and segment results [B.1. Significant Transactions for the First Half of 2025](index=14&type=section&id=B.1.%20Significant%20transactions%20for%20the%20first%20half%20of%202025) This section highlights Sanofi's significant H1 2025 transactions, including the Opella divestment, Dren-0201 acquisition, and agreements for Vigil Neuroscience and Blueprint Medicines - Sanofi lost control of Opella on April 30, 2025, retaining a **48.2%** equity interest in OPAL JV Co, resulting in a net gain of **€2.7 billion** and a net cash inflow of **€10.7 billion**[43](index=43&type=chunk)[44](index=44&type=chunk)[47](index=47&type=chunk) - Acquired **100%** of Dren-0201, Inc. on May 27, 2025, for **$600 million** (plus **$1.3 billion** in potential future payments), adding SAR448501 to its immunology pipeline[49](index=49&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - Agreed to acquire Vigil Neuroscience, Inc. for approximately **$470 million** equity value (plus CVRs) and Blueprint Medicines Corporation for approximately **$9.1 billion** equity value (plus CVRs), with both expected to close in H2 2025[54](index=54&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk) [B.2. Property, Plant and Equipment](index=16&type=section&id=B.2.%20Property%2C%20plant%20and%20equipment) This section details Sanofi's property, plant, and equipment, showing increased acquisitions in H1 2025 and firm orders as of June 30, 2025 Acquisitions of Property, Plant and Equipment by Operating Segment | (€ million) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Acquisitions | 702 | 591 | | Biopharma | 663 | 535 | | Opella (discontinued operation) | 39 | 56 | - Acquisitions of property, plant and equipment increased by **€111 million** in H1 2025 compared to H1 2024[62](index=62&type=chunk) - Firm orders for property, plant and equipment stood at **€732 million** as of June 30, 2025[62](index=62&type=chunk) [B.3. Goodwill and Other Intangible Assets](index=16&type=section&id=B.3.%20Goodwill%20and%20other%20intangible%20assets) This section details movements in goodwill and other intangible assets, noting a decrease in goodwill due to exchange rates and changes in consolidation scope - Goodwill decreased from **€43,384 million** at December 31, 2024, to **€40,283 million** at June 30, 2025, mainly due to the impact of changes in exchange rates[63](index=63&type=chunk) Movements in Other Intangible Assets (H1 2025) | (€ million) | Acquired R&D | Products, trademarks and other rights | Software | Total other intangible assets | | :--- | :--- | :--- | :--- | :--- | | Carrying amount at January 1, 2025 | 8,369 | 13,841 | 419 | 22,629 | | Changes in scope of consolidation | 500 | — | — | 500 | | Acquisitions and other increases | 332 | 302 | 42 | 676 | | Currency translation differences | (1,339) | (5,159) | (49) | (6,547) | | Carrying amount at June 30, 2025 | 8,048 | 11,984 | 399 | 20,431 | - The 'Changes in scope of consolidation' line mainly comprises the intangible asset recognized as part of the Dren-0201, Inc. acquisition[64](index=64&type=chunk) [B.4. Impairment of Intangible Assets](index=16&type=section&id=B.4.%20Impairment%20of%20intangible%20assets) This section reports impairment losses recognized in H1 2025, primarily linked to research and development projects - Impairment losses of **€210 million** were recognized in the first half of 2025, linked to research and development projects[65](index=65&type=chunk) [B.5. Investments Accounted for Using the Equity Method](index=17&type=section&id=B.5.%20Investments%20accounted%20for%20using%20the%20equity%20method) This section details Sanofi's equity method investments, showing a significant increase primarily due to the OPAL JV Co investment Investments Accounted for Using the Equity Method | (€ million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | OPAL JV Co (48.2% interest) | 3,239 | — | | EUROAPI (29.6% interest) | 82 | 82 | | Infraserv GmbH & Co. Höchst KG (31.2% interest) | 93 | 102 | | MSP Vaccine Company (50.0% interest) | 79 | 81 | | Other investments | 70 | 51 | | **Total** | **3,563** | **316** | - Total investments accounted for using the equity method significantly increased from **€316 million** at December 31, 2024, to **€3,563 million** at June 30, 2025, primarily due to the **€3,239 million** investment in OPAL JV Co[67](index=67&type=chunk) - Share of profit from investments accounted for using the equity method was **€85 million** in H1 2025, compared to a net loss of **€22 million** in H1 2024, including **€11 million** from OPAL JV Co[69](index=69&type=chunk) [B.6. Other Non-Current Assets](index=18&type=section&id=B.6.%20Other%20non-current%20assets) This section details other non-current assets, showing an increase driven by equity instruments at fair value through other comprehensive income Other Non-Current Assets | (€ million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity instruments at fair value through other comprehensive income | 2,105 | 1,559 | | Debt instruments at fair value through other comprehensive income | 362 | 357 | | Other financial assets at fair value through profit or loss | 965 | 1,027 | | Pre-funded pension obligations | 146 | 156 | | Long-term prepaid expenses | 143 | 152 | | Long-term loans and advances and other non-current receivables | 382 | 502 | | Derivative financial instruments | 6 | — | | **Total** | **4,109** | **3,753** | - Total other non-current assets increased by **€356 million** from **€3,753 million** at December 31, 2024, to **€4,109 million** at June 30, 2025[74](index=74&type=chunk) - Equity instruments at fair value through other comprehensive income increased by **€546 million**[74](index=74&type=chunk) [B.7. Accounts Receivable](index=18&type=section&id=B.7.%20Accounts%20receivable) This section details accounts receivable, showing a decrease in overdue amounts from December 31, 2024, to June 30, 2025 Accounts Receivable | (€ million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross value | 7,896 | 7,777 | | Allowances | (86) | (100) | | **Carrying amount** | **7,810** | **7,677** | Ageing Profile of Overdue Accounts Receivable (Gross Value) | (€ million) | <1 month | 1-3 months | 3-6 months | 6-12 months | > 12 months | | :--- | :--- | :--- | :--- | :--- | :--- | | As of June 30, 2025 | 122 | 103 | 73 | 48 | 40 | | As of December 31, 2024 | 316 | 194 | 87 | 9 | 44 | - Overdue accounts receivable (gross value) decreased from **€650 million** at December 31, 2024, to **€386 million** at June 30, 2025[75](index=75&type=chunk) [B.8. Consolidated Shareholders' Equity](index=19&type=section&id=B.8.%20Consolidated%20shareholders'%20equity) This section details consolidated shareholders' equity movements, including significant share repurchases, treasury share cancellations, and restricted share plan expenses - Sanofi repurchased **39,344,633** of its own shares for **€3,988 million** in H1 2025 under a share repurchase program[80](index=80&type=chunk) - Treasury shares amounting to **€3,868 million** were cancelled in H1 2025[83](index=83&type=chunk) - The total expense recognized for restricted share plans was **€146 million** in H1 2025, with **11,550,347** shares not yet fully vested[86](index=86&type=chunk) [B.9. Debt, Cash and Cash Equivalents](index=21&type=section&id=B.9.%20Debt%2C%20cash%20and%20cash%20equivalents) This section details Sanofi's debt, cash, and cash equivalents, showing a decrease in net debt due to bond issuances and redemptions Debt, Cash and Cash Equivalents | (€ million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Long-term debt | 13,200 | 11,791 | | Short-term debt and current portion of long-term debt | 7,309 | 4,209 | | Total debt | 20,519 | 16,137 | | Cash and cash equivalents | (15,359) | (7,441) | | **Net debt** | **5,102** | **8,772** | - Net debt decreased by **€3,670 million** from **€8,772 million** at December 31, 2024, to **€5,102 million** at June 30, 2025[94](index=94&type=chunk) - Sanofi issued **€3 billion** in bonds and redeemed **€1.85 billion** in bonds during H1 2025[99](index=99&type=chunk) [B.10. Derivative Financial Instruments](index=24&type=section&id=B.10.%20Derivative%20financial%20instruments) This section details Sanofi's derivative financial instruments for operating and financial currency hedging, and interest rate management Operating Currency Hedging Instruments (June 30, 2025) | (€ million) | Notional amount | Fair value | | :--- | :--- | :--- | | Forward currency sales | 6,619 | 133 | | Forward currency purchases | 4,418 | (84) | | **Total** | **11,037** | **49** | Financial Currency Hedging Instruments (June 30, 2025) | (€ million) | Notional amount | Fair value | | :--- | :--- | :--- | | Cross currency seller swaps | 1,476 | 5 | | Forward currency sales | 7,723 | 176 | | Forward currency purchases | 3,609 | (44) | | **Total** | **12,808** | **137** | - Sanofi uses interest rate swaps with a total notional amount of **€2,348 million** and a fair value of **€(88) million** to manage financial exposure[108](index=108&type=chunk) [B.11. Liabilities Related to Business Combinations and Non-Controlling Interests](index=25&type=section&id=B.11.%20Liabilities%20related%20to%20business%20combinations%20and%20to%20non-controlling%20interests) This section details liabilities related to business combinations and non-controlling interests, showing a decrease due to payments and currency translation Movements in Liabilities Related to Business Combinations and Non-Controlling Interests (H1 2025) | (€ million) | Balance at January 1, 2025 | Payments made | Fair value remeasurements through profit or loss | Currency translation differences | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total | 641 | (72) | 72 | (77) | 564 | | Of which: Non-current portion | 569 | — | — | — | 564 | | Of which: Current portion | 72 | (72) | — | — | — | - Liabilities related to business combinations and non-controlling interests decreased from **€641 million** at January 1, 2025, to **€564 million** at June 30, 2025[110](index=110&type=chunk) - The main component is the contingent consideration liability towards Shire (Translate Bio acquisition), measured at **€563 million** as of June 30, 2025[112](index=112&type=chunk) [B.12. Non-Current Provisions and Other Non-Current Liabilities](index=26&type=section&id=B.12.%20Non-current%20provisions%20and%20other%20non-current%20liabilities) This section details non-current provisions and other non-current liabilities, showing a decrease due to changes in provisions and other liabilities Non-Current Provisions and Other Non-Current Liabilities | (€ million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Provisions | 5,003 | 5,762 | | Other non-current liabilities | 2,113 | 2,334 | | **Total** | **7,116** | **8,096** | - Total non-current provisions and other non-current liabilities decreased by **€980 million** from **€8,096 million** at December 31, 2024, to **€7,116 million** at June 30, 2025[115](index=115&type=chunk) - Other non-current liabilities include **€1,756 million** relating to royalties payable to Sobi on net sales of Beyfortus in the United States[115](index=115&type=chunk) [B.13. Off Balance Sheet Commitments](index=27&type=section&id=B.13.%20Of%20balance%20sheet%20commitments) This section outlines Sanofi's off-balance sheet commitments, including a significant license and collaboration agreement with Earendil Labs - Sanofi entered into a license and collaboration agreement with Earendil Labs for two bispecific antibodies, involving an upfront payment of **$125 million** and potential milestone payments up to **$1.7 billion**[123](index=123&type=chunk) [B.14. Litigation and Arbitration Proceedings](index=27&type=section&id=B.14.%20Litigation%20and%20arbitration%20proceedings) This section details Sanofi's litigation and arbitration proceedings, including Zantac product litigation settlements and the Plavix Attorney General action - Sanofi reached several settlement deals in April 2025, resolving a majority of the Zantac product litigation in the Delaware State Court consolidated litigation[127](index=127&type=chunk) - The Delaware Supreme Court reversed the Superior Court's denial of Defendants' Daubert motion regarding Zantac, remanding findings for consistency[128](index=128&type=chunk) - Sanofi settled the Plavix (clopidogrel) Attorney General action in Hawaii, with Sanofi US paying **$350 million**[132](index=132&type=chunk) [B.15. Other Operating Income and Expenses](index=28&type=section&id=B.15.%20Other%20operating%20income%20and%20expenses) This section details other operating income and expenses, noting increased expenses primarily related to Regeneron and gains on asset disposals Other Operating Income and Expenses (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Other operating income | 533 | 563 | | Other operating expenses | (2,476) | (1,977) | | Other operating income/(expenses), net related to Regeneron | (2,261) | (1,745) | - Other operating expenses increased by **€499 million**, primarily due to **€2,331 million** in expenses related to Regeneron in H1 2025[139](index=139&type=chunk)[141](index=141&type=chunk) - Gains on disposals of assets and operations, primarily non-strategic products, amounted to **€344 million** in H1 2025[140](index=140&type=chunk) [B.16. Restructuring Costs and Similar Items](index=29&type=section&id=B.16.%20Restructuring%20costs%20and%20similar%20items) This section details restructuring costs and similar items, showing a decrease in H1 2025 due to reduced employee-related expenses and R&D reorganization impacts Restructuring Costs and Similar Items (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Employee-related expenses | 201 | 810 | | Charges, gains or losses on assets | 109 | (27) | | Costs of transformation programs | 80 | 114 | | Other restructuring costs | 40 | 163 | | **Total** | **430** | **1,060** | - Restructuring and similar costs decreased by **€630 million** in H1 2025 compared to H1 2024[145](index=145&type=chunk) - The decrease is mainly because H1 2024 included significant impacts from the Job Management and Career Paths (GEPP) program and R&D reorganization[145](index=145&type=chunk) [B.17. Other Gains and Losses, and Litigation](index=29&type=section&id=B.17.%20Other%20gains%20and%20losses%2C%20and%20litigation) This section details other gains and losses, and litigation, noting a reduced charge in H1 2025 compared to H1 2024's significant Plavix provision - Other gains and losses, and litigation resulted in a charge of **€57 million** in H1 2025, mainly related to major litigation[146](index=146&type=chunk) - This compares to a charge of **€450 million** in H1 2024, which mainly comprised a provision for Plavix litigation in Hawaii[146](index=146&type=chunk) [B.18. Financial Expenses and Income](index=29&type=section&id=B.18.%20Financial%20expenses%20and%20income) This section details financial expenses and income, showing a decrease in net financial expenses in H1 2025, including a Beyfortus royalties expense Financial Expenses and Income (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Financial expenses | (361) | (583) | | Financial income | 184 | 277 | | **Net financial income/(expenses)** | **(177)** | **(306)** | | Cost of debt | (219) | (306) | | Interest income | 162 | 239 | - Net financial expenses decreased from **€(306) million** in H1 2024 to **€(177) million** in H1 2025[148](index=148&type=chunk) - A financial expense of **€50 million** was recorded in H1 2025 for the remeasurement of the liability for estimated future royalties on Beyfortus sales in the US[150](index=150&type=chunk) [B.19. Income Tax Expense](index=30&type=section&id=B.19.%20Income%20tax%20expense) This section details income tax expense and the effective tax rate, noting an increase in H1 2025, including the impact of Pillar Two Income Tax Expense (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Current taxes | (1,202) | (1,108) | | Deferred taxes | 491 | 729 | | **Total** | **(711)** | **(379)** | | Income before tax and investments accounted for using the equity method | 3,582 | 2,462 | Effective Tax Rate Reconciliation (H1 2025 vs. H1 2024) | (as a percentage) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Standard tax rate applicable in France | 25.8 | 25.8 | | Difference between the standard French tax rate and the rates applicable to Sanofi | (7.3) | (15.5) | | Revisions to tax exposures and settlements of tax disputes | 2.3 | 2.3 | | Other | (1.0) | 2.8 | | **Effective tax rate** | **19.8** | **15.4** | - The effective tax rate increased from **15.4%** in H1 2024 to **19.8%** in H1 2025, including a **€17 million** tax expense for the estimated impact of Pillar Two in H1 2025[153](index=153&type=chunk)[155](index=155&type=chunk) [B.20. Revenue from Contracts with Customers](index=31&type=section&id=B.20.%20Revenue%20from%20contracts%20with%20customers) This section details revenue from contracts with customers, showing increased total net sales in H1 2025, driven by strong Dupixent and Beyfortus growth Net Sales by Product (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Group Net sales | 19,889 | 18,360 | | Dupixent | 7,312 | 6,138 | | ALTUVIIIO | 542 | 280 | | Nexviazyme/Nexviadyme | 387 | 320 | | RSV vaccine (Beyfortus) | 356 | 200 | - Total net sales increased by **8.3%** from **€18,360 million** in H1 2024 to **€19,889 million** in H1 2025[157](index=157&type=chunk) - Dupixent sales grew by **19.1%** to **€7,312 million**, and RSV vaccine (Beyfortus) sales increased by **78%** to **€356 million**[157](index=157&type=chunk) [B.21. Segment Information](index=32&type=section&id=B.21.%20Segment%20information) This section provides segment information, identifying Biopharma as Sanofi's single operating segment and detailing its net sales and business operating income - Sanofi operates as a single operating segment: Biopharma, which includes commercial operations, R&D, production, and support functions[161](index=161&type=chunk)[162](index=162&type=chunk) - 'Business operating income' is the key internal performance indicator used by Sanofi's chief operating decision maker[164](index=164&type=chunk) Biopharma Segment Results (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net sales | 19,889 | 18,360 | | Business operating income | 5,347 | 4,916 | | Net sales (United States) | 9,535 | 8,292 | | Net sales (Europe) | 4,144 | 4,072 | [B.22. Information Related to Opella, Presented Within Assets Held for Sale and Discontinued Operations](index=35&type=section&id=B.22.%20Information%20related%20to%20Opella%2C%20presented%20within%20assets%20held%20for%20sale%20and%20discontinued%20operations) This section provides information on Opella, presented as assets held for sale and discontinued operations, following its April 30, 2025 divestment - The Opella transaction closed on April 30, 2025, leading to the derecognition of all assets and liabilities of Opella subsidiaries[178](index=178&type=chunk) Opella Assets and Liabilities Held for Sale (December 31, 2024) | (€ million) | December 31, 2024 | | :--- | :--- | | Total assets held for sale | 13,489 | | Total liabilities related to assets held for sale | 2,131 | Net Income from Discontinued Operations (Opella) (H1 2025 vs. H1 2024) | (€ million) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net sales and other revenues | 1,736 | 2,645 | | Operating income | 266 | 277 | | Gain on disposal of Opella before tax | 2,781 | — | | Net income from discontinued operations (Opella) | 2,881 | 202 | | Basic earnings per share (in euros) | 2.34 | 0.16 | [C/ Events Subsequent to June 30, 2025](index=35&type=section&id=C%2F%20Events%20subsequent%20to%20June%2030%2C%202025) Subsequent to June 30, 2025, Sanofi agreed to acquire Vicebio Ltd for **$1.15 billion** upfront, expanding its vaccine pipeline with an RSV and hMPV candidate - On July 22, 2025, Sanofi agreed to acquire Vicebio Ltd for a total upfront payment of **$1.15 billion**, with potential milestone payments of up to **$450 million**[181](index=181&type=chunk) - The acquisition brings an early-stage combination vaccine candidate for respiratory syncytial virus (RSV) and human metapneumovirus (hMPV)[181](index=181&type=chunk) - The transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions[181](index=181&type=chunk)