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Sanofi SA Earnings - Analysis & Highlights for Q4 2024
Overview
PositivesNegativesOutlook
- Net sales increased by 10.3% at constant exchange rates to €10.6 billion in Q4, marking the third consecutive quarter of double-digit growth.
- Beyfortus sales were as high as those in the nine months of the year combined in Q4.
- Sales exceeded initial expectations, driven by differentiated Fluzone High-Dose and Flublok.
- The company expects the inflection point to be this year and COPD to become an important growth driver due to the large unmet medical need.
- The company is in a strong position as far as volume goes.
- The company expects around €250 million of sales reduction from disposals.
- The company is underindexed versus its commercial presence in the US.
- Volume elasticity is very difficult to assess, and the company does not expect significant positive volume elasticity.
- Business EPS growth is expected to grow at a low-double digit percentage at constant exchange rates before foreign exchange and before share buyback impact.
- Gross margin is expected to continue to increase over the next coming years.
- The company expects around €250 million of sales reduction from disposals.
- The company expects a positive business EPS impact from currency of approximately plus 2% to 3%.
- The company expects strong level of growth in the coming years - solid level of growth.
Q&A Highlights from Sanofi SA Earnings Call Q4 2024
- Analyst asked about Beyfortus, specifically regarding growth in the US market and the doses shipped.
- Paul Hudson, CEO of Sanofi, answered that the company does not provide exact numbers of doses shipped by provider or to each country, but he explained that the significant increase in supply in 2024 enabled them to deliver enough doses to cover for the 2024 needs and the Q1 2025 needs, and that they have shipped doses in Q4 2024 for immunization in January, February, and March of 2025. He also stated that there is an opportunity for growth in the US market in the coming years, but that it is a year-by-year progression, and that they will know more in the coming weeks.
- Paul Hudson, CEO of Sanofi, answered that the company does not provide exact numbers of doses shipped by provider or to each country, but he explained that the significant increase in supply in 2024 enabled them to deliver enough doses to cover for the 2024 needs and the Q1 2025 needs, and that they have shipped doses in Q4 2024 for immunization in January, February, and March of 2025. He also stated that there is an opportunity for growth in the US market in the coming years, but that it is a year-by-year progression, and that they will know more in the coming weeks.
- Analyst asked about the penetration of vaccines in relevant infants in the US and compared to other early pediatric vaccines.
- Paul Hudson stated that the penetration of vaccines in relevant infants in the US is premature, and it will be a few weeks after injection before full data is available. He also stated that there is a significant percentage of the US birth cohort that has been protected against RSV this year, but it's too early to give a more precise number.
- Paul Hudson stated that the penetration of vaccines in relevant infants in the US is premature, and it will be a few weeks after injection before full data is available. He also stated that there is a significant percentage of the US birth cohort that has been protected against RSV this year, but it's too early to give a more precise number.
- Analyst asked about the proportion of sales that go to adolescents with mandates and whether there is concern about individual choice and lower vaccination rates.
- Thomas Triomphe stated that it's too early to give a specific answer, but he expects that the immunization coming into the market will take two or three years to peak in terms of VCR. He also stated that he does not believe that mandatory or not mandatory situations will make a big difference into the vaccination coverage rate.
- Thomas Triomphe stated that it's too early to give a specific answer, but he expects that the immunization coming into the market will take two or three years to peak in terms of VCR. He also stated that he does not believe that mandatory or not mandatory situations will make a big difference into the vaccination coverage rate.
- Analyst asked about the amount of Nuvaxovid sales that are factored into 2025 sales guidance.
- Paul Hudson stated that Nuvaxovid is not a significant part of the guidance, but it's included in the guidance that has been shared with François.
- Paul Hudson stated that Nuvaxovid is not a significant part of the guidance, but it's included in the guidance that has been shared with François.
- Analyst asked about topline press releases on phase 2 trial results or if updates will be provided in conjunction with quarterly results calls.
- Paul Hudson stated that the company will remain great stewards of their materiality requirements and will not commit to publishing topline phase 2 data as they come, except where they're material or as part of a broader story. He also stated that the company is becoming a science company and will watch the broad story development around R&D and pipeline.
- Paul Hudson stated that the company will remain great stewards of their materiality requirements and will not commit to publishing topline phase 2 data as they come, except where they're material or as part of a broader story. He also stated that the company is becoming a science company and will watch the broad story development around R&D and pipeline.
- Analyst asked about the profitability dynamics of Dupixent, specifically regarding gross margin and the impact of the COPD launch, accelerating volumes, and manufacturing changes.
- François Xavier Michel Roger, CEO of Sanofi, explained that the company has made significant progress in improving its gross margin over the past few years, and that Dupixent will contribute to this improvement in 2025, but it's not the only factor. He also mentioned that the company is not dependent on Dupixent alone to increase its gross margin and that new product launches also have a fair contribution to it.
- François Xavier Michel Roger, CEO of Sanofi, explained that the company has made significant progress in improving its gross margin over the past few years, and that Dupixent will contribute to this improvement in 2025, but it's not the only factor. He also mentioned that the company is not dependent on Dupixent alone to increase its gross margin and that new product launches also have a fair contribution to it.
- Analyst asked about the company's confidence in the FDA's approval of tolebrutinib and the possibility of additional data requirements, such as the PPMS data.
- Houman Ashrafian, Chief Medical Officer of Sanofi, stated that the company is working closely with the FDA and is encouraged to submit for SPMS. He also mentioned that the PPMS result will come out later in the year, and the data set requirement for SPMS will be based on that. Additionally, he stated that the FDA will adhere closely to the phase 3 clinical trial protocol in terms of intensiveness and regularity of monitoring, and the label will reflect that. He also mentioned that Sanofi will support any decision by the regulator to provide the most thoughtful and safe part for patients.
- Houman Ashrafian, Chief Medical Officer of Sanofi, stated that the company is working closely with the FDA and is encouraged to submit for SPMS. He also mentioned that the PPMS result will come out later in the year, and the data set requirement for SPMS will be based on that. Additionally, he stated that the FDA will adhere closely to the phase 3 clinical trial protocol in terms of intensiveness and regularity of monitoring, and the label will reflect that. He also mentioned that Sanofi will support any decision by the regulator to provide the most thoughtful and safe part for patients.
- Analyst asked about the price increase of Beyfortus by 5% in 2024 according to American Academy of Pediatrics and whether the company will keep this trend or consider the price differently for the next season due to potential competition.
- Paul Hudson, CEO of Sanofi, stated that the company will hold the price point of Beyfortus in 2025, citing the product's unprecedented body of real-world evidence showing massive reduction of hospitalization for newborns in countries that have used Beyfortus. He also mentioned that the company is seeing no erosion of price point in 2025 and that they are confident about the future due to the quality of their products.
- Paul Hudson, CEO of Sanofi, stated that the company will hold the price point of Beyfortus in 2025, citing the product's unprecedented body of real-world evidence showing massive reduction of hospitalization for newborns in countries that have used Beyfortus. He also mentioned that the company is seeing no erosion of price point in 2025 and that they are confident about the future due to the quality of their products.
- Analyst asked about the possibility of vaccine hesitancy being a concern for any vaccines and whether the company is confident about the future due to the quality of their products.
- Thomas Triomphe, Head of Vaccines, Sanofi, stated that vaccine hesitancy is a concern for any vaccines and that when there is vaccine hesitancy, there is less protection and more diseases. He also mentioned that after three or four years of soft flu vaccination coverage rate, there has been a comeback of influenza in the UK, France, and Japan, and that there is an increase in the severity and number of hospitalization due to influenza this winter. He concluded by saying that the company is confident about the future due to the quality of their products.
- Thomas Triomphe, Head of Vaccines, Sanofi, stated that vaccine hesitancy is a concern for any vaccines and that when there is vaccine hesitancy, there is less protection and more diseases. He also mentioned that after three or four years of soft flu vaccination coverage rate, there has been a comeback of influenza in the UK, France, and Japan, and that there is an increase in the severity and number of hospitalization due to influenza this winter. He concluded by saying that the company is confident about the future due to the quality of their products.
- Analyst asked about the possibility of ALTUVIIIO becoming a multi-blockbuster and the company's plans for its commercialization.
- Brian Foard, Head of Oncology, Sanofi, stated that the company believes ALTUVIIIO will be a multi-blockbuster this year and that they are investing behind this asset. He also mentioned that the subcu formulation offers a significant advantage in terms of patient and nurse experience, utilizing an on-body delivery device, and that the company believes this could ease the use and reduce some of the treatment burden along with the strong efficacy and safety that they have provided.
- Brian Foard, Head of Oncology, Sanofi, stated that the company believes ALTUVIIIO will be a multi-blockbuster this year and that they are investing behind this asset. He also mentioned that the subcu formulation offers a significant advantage in terms of patient and nurse experience, utilizing an on-body delivery device, and that the company believes this could ease the use and reduce some of the treatment burden along with the strong efficacy and safety that they have provided.
