Sanofi (NasdaqGS:SNY) Q3 2025 Earnings Call October 24, 2025 08:30 AM ET Speaker0Hello, everyone. This is Thomas Gustlarten from the Sanofi IR team. Welcome to the Q3 twenty twenty five Conference Call for Investors and Analysts. As usual, you can find the slides on synovi.com. Please turn to Slide number three.Here, we have the usual forward looking statements. We would like to remind you that information presented in this call contains forward looking statements that are subject to substantial risks and u ...

Financial Data and Key Metrics Changes - Net sales increased by 10.1% at constant exchange rates in Q2, primarily driven by immunology, biopharma launches, and Befortus [16][26] - Business EPS was €1.59, up 8.3%, reflecting strong sales performance and improved gross margin [18][26] - Gross margin improved by 1.5 percentage points, largely due to an improved product mix and efficiencies [16][18] Business Line Data and Key Metrics Changes - New launches generated close to €1,000,000,000 in sales, representing 10% of total sales [7][10] - Dupixent sales reached €3,800,000,000, up 21% in Q2, driven by strong demand across geographies [10][11] - Vaccine business sales increased by 10.3%, benefiting from the late flu season in the Northern Hemisphere [11][12] Market Data and Key Metrics Changes - Dupixent sales in the U.S. reached €2,800,000,000, up 22.7%, leading in new to brand prescriptions [10] - Outside the U.S., sales exceeded $1,000,000,000, driven by volume growth in key markets [10] - Anticipated sales split for flu vaccines is about 75% in Q3 and 25% in Q4, with total sales expected to decrease by a mid-teens percentage due to competitive pressures [25][26] Company Strategy and Development Direction - The company refined its 2025 sales guidance to high single-digit percentage growth at constant exchange rates, reflecting confidence in growth drivers [6][26] - The completion of the Blueprint Medicines acquisition strengthens the company's position in rare immunology diseases [13][14] - The company is committed to sustainability, aiming for all new medicines and vaccines to incorporate eco-design principles by 2025 [15][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year business outlook, supported by strong performance from growth drivers [6][26] - The company is navigating uncertainties from potential U.S. tariffs and EU exports, with updates to be provided as more information becomes available [27][28] - Management remains optimistic about the pipeline and the potential for new product launches to drive future growth [41][45] Other Important Information - R&D expenses increased by 17.7% due to a lower base of comparison last year, with underlying R&D expenses up around 7% [17][18] - The company is executing a €5,000,000,000 share buyback program in 2025, with over 80% already completed [21][22] Q&A Session Summary Question: R&D transformation and pipeline progress - Management acknowledged the progress in R&D but noted that the share price is lagging, awaiting further pipeline developments [41][42] - Confidence remains in the Phase III trials and the potential for achieving €10 billion in sales by 2030 [42][43] Question: Development spend and margin outlook - R&D expenses are expected to be slightly up in H2, with SG&A increasing at half the rate of sales growth [50][52] - Management anticipates BOI margin growth alongside absolute growth in the coming years [54][56] Question: Dupixent performance in China - Dupixent has seen over 30% volume growth in China, despite pricing pressures [58][59] Question: Expectations for amlitilumab and tariffs - The company has not factored potential tariff impacts into its 2025 guidance, expecting limited effects due to existing inventory [63][64] - Amlitilumab is expected to provide comparable efficacy to existing treatments with a longer dosing interval [66][67]

Financial Data and Key Metrics Changes - Net sales increased by 10.1% at constant exchange rates in Q2 2025, primarily driven by immunology, biopharma launches, and Befortus [15][25] - Business EPS was €1.59, up 8.3%, reflecting strong sales performance and improved gross margin [15][25] - Gross margin improved by 1.5 percentage points due to an improved product mix and efficiencies [15] Business Line Data and Key Metrics Changes - New launches generated close to €1,000,000,000 in sales, representing 10% of total sales [6][7] - Dupixent sales reached €3,800,000,000, up 21% in Q2, driven by strong demand across geographies [7][8] - Vaccine business sales increased by 10.3%, benefiting from the late flu season in the Northern Hemisphere [9][10] Market Data and Key Metrics Changes - Dupixent sales in the U.S. reached €2,800,000,000, up 22.7%, leading in both new to brand prescriptions and total prescriptions [8] - Outside the U.S., sales exceeded $1,000,000,000, driven by volume growth in key markets [8] - Anticipated sales split for flu vaccines is about 75% in Q3 and 25% in Q4, with total sales expected to decrease by a mid-teens percentage due to competitive pressures [24][25] Company Strategy and Development Direction - The company refined its 2025 sales guidance to high single-digit percentage growth at constant exchange rates, reflecting confidence in growth drivers [5][25] - The completion of the Blueprint Medicines acquisition strengthens the company's position in rare immunology diseases and enhances its pipeline [12][18] - The company is committed to sustainability, aiming for all new medicines and vaccines to incorporate eco-design principles by 2025 [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year business outlook, supported by strong performance from growth drivers [5][25] - The company is navigating uncertainties from potential U.S. tariffs and EU exports, with updates to be provided as more information becomes available [26] - Management highlighted the importance of maintaining a strong market share despite competitive pricing pressures in the flu vaccine market [24][25] Other Important Information - The company is executing a €5,000,000,000 share buyback program in 2025, with over 80% already completed [20] - The anticipated negative year-on-year BOI impact from Regeneron reimbursement is approximately €300,000,000 in 2026 and €800,000,000 in 2027 [22] Q&A Session Summary Question: R&D transformation and pipeline progress - Management acknowledged the progress in R&D but noted that the share price is lagging, indicating a need for pipeline advancements [42][43] - Confidence remains in achieving the targeted increase in Phase III trials and the potential for significant sales by 2030 [43][46] Question: Development spend and pricing pressures - R&D expenses are expected to be slightly up in H2, with SG&A increasing at half the rate of sales growth [51][55] - Management confirmed that pricing pressures in the flu market are being addressed, with expectations for continued market share despite competitive dynamics [72][75] Question: Dupixent growth in China - Dupixent has seen over 30% volume growth in China, with management optimistic about future growth despite pricing pressures [60][62] Question: Expectations for amlitelemab and tariffs - Management emphasized the importance of efficacy and treatment duration for amlitelemab in the atopic dermatitis market [68][69] - No significant impact from tariffs is expected for 2025 due to existing inventory [66][67]

Summary of Blueprint Medicines Conference Call Company Overview - **Company**: Blueprint Medicines (BPMC) - **Focus**: Development of life-changing medicines, particularly in diseases related to mast cell biology, transitioning from oncology to rare diseases like systemic mastocytosis [3][4] Key Products and Pipeline - **Lead Product**: AYVAKIT - **Indications**: Approved for three indications, including advanced systemic mastocytosis (SM) and indolent systemic mastocytosis (ISM) [6][7] - **Market Opportunity**: - Estimated 60,000 patients in the US with SM, with 90-95% having the indolent form [8] - Projected revenue of $700 to $720 million for 2025, with expectations to reach $2 billion by 2030 [11][12] - Long-term growth anticipated due to increasing diagnosis rates and market penetration [13][59] Financial Performance - **Current Financial Position**: Strong, self-sustainable, with over $900 million in cash [5][60] - **Revenue Growth**: AYVAKIT's success is expected to significantly change the financial outlook for the company, driven primarily by the ISM opportunity [9][12] Market Strategy - **Patient Engagement**: Focus on building a strong base of healthcare providers with clinical experience in prescribing AYVAKIT [19] - **Direct-to-Consumer (DTC) Campaigns**: Targeted digital campaigns rather than broad advertisements, aiming to educate and raise awareness among potential patients [34][35] - **Market Share Goals**: Aiming for a modest market share to achieve revenue targets, with ongoing efforts to improve diagnostics for better patient identification [17][59] Future Growth and Pipeline - **Next Generation Programs**: Introduction of elenestinib and BLU-808, targeting type two inflammatory diseases [13][36] - **BLU-808**: Aimed at addressing unmet needs in allergic conditions, with ongoing proof of concept studies [41][42] - **Differentiation**: Positioning as an oral small molecule treatment, offering a different approach compared to existing biologics [48][50] Industry Context - **Competitive Landscape**: Learning from successful rare disease launches by other companies, while avoiding pitfalls seen in past launches [27][28] - **Long-term Vision**: Continued investment in discovery and innovation, with expectations for pipeline expansion beyond current products [52][54] Additional Insights - **Patient Retention**: Low discontinuation rates observed, with patients expected to remain on therapy for over three years, indicating strong drug tolerability [25][24] - **Diagnosis Improvement**: Efforts to enhance diagnostic capabilities for systemic mastocytosis, contributing to increased patient identification [59] This summary encapsulates the key points discussed during the Blueprint Medicines conference call, highlighting the company's strategic direction, financial outlook, and product pipeline.

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved total revenues of $149.4 million from net product sales of AYVAKIT, reflecting a 61% year-over-year growth [6][35] - The revenue guidance for AYVAKIT has been raised to $700 million to $720 million for the year, driven by strong fundamentals and favorable dynamics [12][35] Business Line Data and Key Metrics Changes - AYVAKIT generated $129.4 million in the U.S. and $20 million internationally, with a favorable mix of free versus commercial goods, now below 10% [12][14] - The company expects to reach $2 billion in AYVAKIT revenue by 2030, with a peak SM franchise opportunity of $4 billion [15][16] Market Data and Key Metrics Changes - The company noted that approximately 25,000 patients are diagnosed with systemic mastocytosis (SM) in the U.S., indicating significant room for market penetration [15][16] - The international business has seen year-over-year performance more than double from Q1 last year, with expectations of continued growth as more markets come online [61][90] Company Strategy and Development Direction - The company aims to maintain a durable financial profile while focusing on innovation and commercial excellence [6][8] - The strategy includes expanding the prescriber base to include allergists, dermatologists, and gastroenterologists, which is expected to drive growth in the coming years [20][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong cash position of $900 million, allowing for continued investment in innovation despite broader market volatility [10][36] - The management team highlighted the importance of patient starts and retention as key drivers for future revenue growth [53][54] Other Important Information - The company is advancing its pipeline with two prioritized programs, elenestinib and BLU-808, which are expected to drive significant upside value [9][28] - The company has not experienced any major regulatory impacts from staffing changes at the FDA and does not anticipate significant regulatory filings in the next twelve months [10] Q&A Session Summary Question: What type of rebound in growth can be expected in Q2? - Management indicated that they expect strong underlying growth to continue through the remaining quarters, despite Q1 being challenging due to typical industry headwinds [42][43] Question: What is the strategy for dose selections in BLU-808? - The strategy involves testing a range of doses to understand the optimal dosing for different symptoms, with a focus on patient relief [46][48] Question: What factors are included in the revenue guidance? - The guidance considers patient starts, duration of therapy, and the mix of free versus commercial goods, with a positive outlook for continued growth [54][56] Question: How durable is the sub-10% free drug rate? - Management expressed confidence that the free goods rate is well below 10% and is expected to remain stable throughout the year, with ongoing monitoring of new Medicare patients [80][83] Question: What are the drivers behind flat growth in the international market? - The flat growth was attributed to timing of distributor orders and currency fluctuations, but the underlying demand remains strong [90][91]

Financial Performance - AYVAKIT revenue reached $149.4 million in Q1 2025, a 61% year-over-year growth[14] - The company is raising AYVAKIT revenue guidance for 2025 to $700 - $720 million[14] - Blueprint Medicines anticipates $2 billion in AYVAKIT revenue by 2030 and a $4 billion peak for the SM franchise[14] - The company maintains a strong cash position of approximately $900 million[14] AYVAKIT Commercial Performance - Ex-US AYVAKIT revenue was $83.1 million in Q1 2025[16] - US AYVAKIT revenue was $66.3 million in Q1 2025[16] - Approximately 75% of SM patients start AYVAKIT at a 25 mg dosage[17] - Over 95% of AYVAKIT patients strongly agree that they are satisfied with AYVAKIT as a treatment for their SM[26] Pipeline Development - Blueprint Medicines initiated BLU-808 proof-of-concept studies in ARC and CU[14] - The company is advancing enrollment in the registration-enabling HARBOR study of elenestinib in ISM[14]

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved total revenues of $149.4 million from AYVAKIT net product sales, with a year-over-year revenue growth of 61% [5][10][35] - The revenue guidance for AYVAKIT has been raised to a range of $700 million to $720 million for the year, reflecting strong underlying demand and favorable dynamics [12][35] Business Line Data and Key Metrics Changes - AYVAKIT global net product revenues were $149.4 million, with $129.4 million from the US and $20 million from international markets [10][35] - The company reported a favorable mix of free versus commercial goods, with free goods now below 10%, which positively impacted revenue guidance [12][82] Market Data and Key Metrics Changes - The company noted that approximately 25,000 patients are diagnosed with systemic mastocytosis (SM) in the US, indicating significant market potential with only about 20% penetration needed to reach $2 billion in annual revenue [13][14] - The international business has shown year-over-year performance more than doubling from Q1 last year, although Q4 to Q1 dynamics were influenced by timing of distributor orders [59][89] Company Strategy and Development Direction - The company aims to capture a substantial market opportunity in systemic mastocytosis, targeting $2 billion in revenue by 2030 and a $4 billion peak opportunity across the SM franchise [6][13] - The company is expanding its prescriber base to include dermatologists and gastroenterologists, which is expected to increase the addressable patient pool significantly [19][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's durable commercial growth profile and strong cash position, which allows for continued investment in innovation despite broader market volatility [9][35] - The management team emphasized the importance of patient starts and retention as key drivers for long-term revenue growth, with expectations for continued growth in new patient starts throughout the year [51][52] Other Important Information - The company has initiated two proof-of-concept studies for BLU-808, targeting allergic rhinoconjunctivitis and chronic urticaria, with early data expected by the end of the year [28][29] - The company is monitoring the evolving regulatory environment but does not anticipate any major impacts on its business from recent FDA staffing changes [9] Q&A Session Summary Question: What type of rebound in growth might be expected in Q2? - Management indicated that they expect steady growth through the remaining quarters, with Q1 performance aligning with expectations and a strong underlying demand for AYVAKIT [41][42] Question: Can you elaborate on the strategy for dose selections for BLU-808? - The strategy includes testing a range of doses to understand the optimal dosing for different patient responses, with a focus on achieving a balance of safety and efficacy [45][46] Question: What factors are included in the updated guidance? - The guidance considers patient starts, duration of therapy, and the mix of free versus commercial goods, with expectations for continued strength in these areas [50][51] Question: What are the expectations for international market drivers this year? - The international team has performed well, with expectations for continued growth, particularly as more markets begin to offer reimbursement for ISM [59][60] Question: How durable is the sub-10% free drug rate? - Management expressed confidence that the free goods rate is well below 10% and is expected to remain stable, with ongoing monitoring of new Medicare patients' access to commercial therapy [82][83]

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved total revenues of $149.4 million from net product sales of AYVAKIT, reflecting a 61% year-over-year growth [7][37] - The revenue guidance for AYVAKIT has been raised to $700 million to $720 million for the year, driven by strong fundamentals and favorable dynamics in free versus paid goods mix [8][37] Business Line Data and Key Metrics Changes - AYVAKIT generated $129.4 million in the U.S. and $20 million internationally, with a strong commercial execution despite typical Q1 headwinds [13][37] - The company reported low discontinuation rates and an increase in new patient starts, indicating a growing patient base on therapy [15][18] Market Data and Key Metrics Changes - The international business saw year-over-year performance more than double from Q1 last year, although it was flat quarter-over-quarter due to timing of distributor orders and foreign exchange impacts [66][94] - The company expects ISM reimbursement to expand beyond Germany, which is currently the only market with ISM reimbursement [65][66] Company Strategy and Development Direction - The company aims to capture a substantial market opportunity in systemic mastocytosis (SM), targeting $2 billion in revenue by 2030 and a $4 billion peak franchise opportunity [8][17] - The strategy includes expanding the prescriber base to include allergists, dermatologists, and gastroenterologists, which is expected to drive growth in the coming years [19][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's durable commercial growth profile and strong cash position, allowing for continued investment in innovation despite broader market volatility [10][11] - The management highlighted the importance of patient engagement and education among prescribers as key drivers for future growth [19][81] Other Important Information - The company has initiated two proof of concept studies for BLU-808, targeting allergic rhinoconjunctivitis and chronic urticaria, with early data expected by the end of the year [30][35] - AYVAKIT's long-term safety profile remains strong, with over 90% of patients satisfied with the treatment [27][24] Q&A Session Summary Question: What type of rebound in growth can be expected in Q2? - Management indicated that they expect steady growth in the remaining quarters, with Q1 challenges being temporary and underlying demand remaining strong [44][45] Question: What factors are included in the revenue guidance? - The guidance considers patient starts, duration of therapy, and the mix of free versus commercial goods, with a focus on maintaining a strong patient base [55][56] Question: What is the current visibility into dose escalations for ISM patients? - Approximately 10% of patients have escalated to 50 mg, with the majority remaining on the 25 mg dose, which continues to show strong efficacy and safety [68][70] Question: What are the drivers behind flat growth in the international market? - The flat growth is attributed to timing of distributor orders and foreign exchange impacts, but the underlying demand remains strong, with expectations for growth as more markets come online [94][95]