Sanofi(SNY)2024-10-25 17:36Financial Data and Key Metrics - Q3 2024 total sales reached EUR13.4 billion, a 16% increase at constant exchange rates (CER), with an estimated 11% growth excluding phasing impacts [3] - Dupixent sales approached EUR3.5 billion in Q3, driven by global volume growth across all indications and geographies [3] - Vaccines business grew 26%, benefiting from flu season phasing and strong contributions from Beyfortus [3] - Pharma launches saw a 67% increase in sales, driven by strong performance across eight recently launched medicines [4] - Business operating income increased by 19.9% in Q3, driven by higher gross profit and operating leverage [13] - Business EPS increased by 17.6% in Q3, with full-year 2024 guidance upgraded to at least low-single-digit growth [13][15] Business Line Performance - Dupixent achieved a milestone of improving the lives of over 1 million patients globally, with strong market share in the US and approaching blockbuster status outside the US [4][5] - Beyfortus sales reached EUR645 million in Q3, with exceptional market uptake in its second season [8] - ALTUVIIIO sales were EUR172 million, establishing it as a new standard of care in hemophilia A [8] - Nexviazyme, Rezurock, and Sarclisa contributed EUR1.4 billion in sales in Q3 [8] - Opella grew 8%, driven by the strategic acquisition of Qunol in the US [4] Market Performance - Dupixent's COPD indication was approved in the US and China, following EU approval four months prior, expanding its market potential [5] - Beyfortus demonstrated 87% efficacy in reducing RSV hospitalization rates in the US, with real-world evidence supporting its effectiveness [9] - Fluzone High-Dose showed 24% superior efficacy compared to standard-dose flu vaccines in a randomized controlled trial [10] - Beyfortus is expected to reach EUR1.5 billion in sales for 2024, with additional capacity supporting Q4 sales [13] Strategic Direction and Industry Competition - The company is focusing on geographic expansion, with around 30 potential country launches for Dupixent by 2026 [6] - Dupixent's growth is supported by penetration into new indications like COPD and chronic spontaneous urticaria (CSU) [6] - The company is advancing its ESG commitments, including ensuring a living wage for employees and improving supply chain partner well-being [10][11] - Sanofi is transitioning to a pure-play biopharma company, with plans to sell a controlling stake in Opella to CD&R for EUR16 billion EV [15] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in Dupixent's growth, targeting a low-double-digit sales CAGR between 2023 and 2030 [7] - The company expects strong growth in 2025, with business EPS increasing over 2024, even without Opella [33] - R&D expenses are aligned with the company's commitment to innovation, with EUR700 million in increased R&D costs for 2024 [14] - The company is focused on bolt-on acquisitions and maintaining a strong credit rating, avoiding large acquisitions [17] Other Important Information - The company is investing in external innovation, including partnerships with MeiraGTx, Ventyx, AnaptysBio, and Vicore [19] - Sanofi completed a licensing agreement with RadioMedix and Orano Med for AlphaMedix, a radioligand for rare cancers [20] - The company is advancing its pipeline with six Phase 3 readouts, 11 submissions, and 10 regulatory decisions planned over the next 18 months [24] Q&A Session Summary Question: Beyfortus Commercial Potential and Opella Deal Proceeds [25] - Management highlighted Beyfortus' strong market position and potential for growth, with confidence in its efficacy and safety data [26] - The Opella deal is expected to generate high-single-digit billion euros in proceeds, with debt pass-through and tax considerations [28] Question: Dupixent COPD Launch Metrics and Opella Proceeds [30] - Early feedback on Dupixent's COPD launch has been positive, with expectations for significant market penetration [31] - The company clarified that the dilution from Opella's sale will be absorbed, with business EPS expected to increase in 2025 [33] Question: Beyfortus Market Penetration and Buyback Authority [34] - Beyfortus is launched in close to 20 countries, with plans for further expansion in 2025 [35] - The company is actively discussing buybacks with the Board and will communicate capital allocation decisions when ready [36] Question: Amlitelimab Strategy and Growth Recovery [37] - Amlitelimab's OX40 ligand pathway is seen as a key differentiator, with potential for significant impact in asthma and other inflammatory diseases [39] - The company expects strong growth recovery in 2025, with accelerated business EPS growth in 2024 [40] Question: Opella Financial Reporting and Tax Rate [43] - Opella's financials will be reported as a discontinued operation in 2024, with an expected underlying tax rate of around 20% [44] Question: IRA Impact and Dupixent Payer Negotiations [45] - The Inflation Reduction Act (IRA) is seen as a mixed impact, with some provisions benefiting patients but potentially limiting innovation [45] - Dupixent's payer negotiations are supported by strong demand growth and a clear strategy for expanding access [45] Question: Stranded Costs and Vaccine Phase 3 Trials [47] - Stranded costs from Opella are not expected to be material, with sales and marketing investments continuing into 2025 [48] - The company is on track to start Phase 3 trials for its 21-valent pneumococcal vaccine in 2024 [50] Question: Radioligand Strategy and Supply Chain [54] - Sanofi is excited about the radioligand space, particularly Lead-212, which has shown promise in rare cancers [56] - The company is confident in its supply chain capabilities, working with Orano Med to ensure timely delivery [57] Question: Beyfortus Capacity and BPI Influence [60] - Beyfortus capacity has been tripled in 2024, with no anticipated supply constraints in 2025 and 2026 [62] - BPI France's influence on Opella is limited, with a 1-2% stake and minimal governance impact [63] Question: Beyfortus Durability and Pneumococcal Vaccine [65] - Beyfortus has demonstrated 83% efficacy against RSV hospitalization after six months, with no waning efficacy [65] - The company is on track to start Phase 3 trials for its 21-valent pneumococcal vaccine in 2024 [68] Question: OX40 Ligand and Pipeline Readouts [70] - Sanofi remains confident in the OX40 ligand pathway, with differentiation from competitors like Amgen [72] - The company plans to disclose pipeline readouts at scientific congresses, with material results communicated promptly [73] Question: Beyfortus Growth and RSV Market Potential [74] - Beyfortus is expected to grow in 2025, regardless of competition, with a focus on all-infant protection [75] - The RSV market potential remains strong, with additional opportunities in pediatric RSV vaccines [75] Question: Beyfortus Dosing and Opella Proceeds [78] - Beyfortus' dosing strategy is tailored to different channels, with no significant disadvantage compared to competitors [80] - Opella proceeds are expected to be high-single-digit billion euros, net of taxes and transaction costs [81] Question: Dupixent LOE and Anti-TL1A Update [82] - Dupixent's LOE is expected in 2031 in the US and 2033 in Europe, with additional patents extending protection [82] - Anti-TL1A data is expected in H2 2024, with updates from Teva and Sanofi [84] Question: Hidradenitis Suppurativa Strategy and Beyfortus Capacity [87] - Sanofi is pursuing a franchise strategy in Hidradenitis Suppurativa, with multiple mechanisms of action under development [89] - Beyfortus capacity has been tripled, with no supply constraints anticipated for 2025 [92] Closing Remarks [93] - Sanofi reaffirmed its strong business momentum, with continued execution on launches and pipeline advancements, aiming to become a pure-play biopharma leader [93]