Sanofi SA Earnings - Q4 2025 Analysis & Highlights
Sanofi's Q4 2025 earnings call highlighted strong financial performance with significant sales and EPS growth, driven by successful new product launches and Dupixent expansion. The company emphasized its strategic focus on becoming an R&D-driven, AI-powered biopharma company, supported by disciplined capital allocation, including share buybacks and strategic acquisitions in vaccines and other therapeutic areas. Management also provided a positive outlook for 2026, anticipating continued profitable growth and further pipeline advancements.
Key Financial Results
Net sales grew by 13.3% to €11.3 billion in Q4 2025.
Full year 2025 sales reached €43.6 billion, representing 9.9% growth at constant exchange rates, which was at the upper end of guidance.
Business gross margin expanded by 1.8 percentage points to 77.5%, driven by favorable product mix and operational efficiencies.
Operating expenses increased by 7.9%, due to increased R&D investments and support for new product launches.
OpEx decreased as a percentage of sales to 39.9% due to efficiency programs.
Business operating income increased by 11.9%, with BOI margin reaching 27.8%.
Business EPS, excluding share buyback, grew by 12.2%, in line with guidance.
Including share buyback, Business EPS grew by 15%.
Free cash flow returned to strong levels in 2025 at €8.1 billion, representing 18.5% of sales.
Business Segment Results
New launches reached €5.7 billion in sales in 2025.
Newly launched medicines and vaccines grew 34% in 2025.
Beyfortus delivered €1.8 billion in full year sales.
ALTUVIIIO achieved blockbuster status, reaching €1.2 billion in full year sales.
Ayvakit reached $725 million in annual pro-forma sales.
Dupixent reached €4.2 billion in Q4 and €15.7 billion in annual sales.
Dupixent saw a more than 30% increase in patients over the past year.
Vaccines full year sales reached €7.9 billion.
Beyfortus grew 9.5% to €1.8 billion, driven by geographic expansion.
Capital Allocation
Completed the €5 billion share buyback program.
Successfully deployed €10.4 billion from the Opella divestment into business development and M&A opportunities.
Proposed to increase the dividend for the 31st consecutive year to €4.12, up by 5% from the previous year.
Will execute a €1 billion share buyback program in 2026.
Ended 2025 with a net debt of €11 billion.
Maintained a 0.9 times net debt to EBITDA ratio.
Industry Trends and Dynamics
The AD (Atopic Dermatitis) market is still developing, with bio-penetration at only 18%.
The CSU (Chronic Spontaneous Urticaria) market is believed to be in the low-teens for bio-penetration.
New mechanisms in the marketplace, like those seen in psoriasis, can accelerate market growth.
There has been a massive increase in influenza hospitalization across the Northern Hemisphere for two consecutive seasons.
Competitive Landscape
Dupixent is the number one prescribed biologic across dermatologists, pulmonologists, allergists, and ear, nose and throat specialists.
Dupixent remains number one in new-to-brand Rx and total brand share in the US.
Beyfortus demonstrated better performance than competitors in real-world evidence head-to-head comparison with maternal immunization.
HEPLISAV-B is the leading adult hepatitis B vaccine in the US with a differentiated two-dose schedule.
The company believes its Dynavax technology could enable a shingles vaccine candidate with similar efficacy to the current incumbent but with much better tolerability.
Macroeconomic Environment
Gross margin expansion is expected to continue with minimal tariff impact following an agreement with the US administration.
Growth Opportunities and Strategies
Continued to develop into an R&D-driven, AI-powered biopharma company.
Reinvested proceeds from the Opella transaction into business development and M&A opportunities.
Successfully launched Qfitlia for haemophilia, Wayrilz for ITP, and Nuvaxovid vaccine for COVID-19.
Achieved several positive phase 3 results, including most of the amlitelimab program in AD and the Sarclisa subcutaneous formulation.
Replenishing phase 1 pipeline, including three promising gene therapies and entry into ophthalmology.
Acquired Vicebio, adding a bivalent RSV plus human metapneumovirus vaccine candidate to the pipeline.
Proposed acquisition of Dynavax Technologies Corporation, adding HEPLISAV-B and a shingles vaccine candidate to the portfolio.
Strengthened position in China with four approvals for global and China-only medicines.
Amlitelimab has shown potential for monthly and quarterly dosing, offering significant patient convenience.
Dupixent has a potential ninth indication with US regulatory acceptance for allergic fungal rhinosinusitis.
Working on the next generation IL4Ra with Regeneron.
Financial Guidance and Outlook
For full year 2026, the company guides for high-single digit growth in sales and profitable growth, meaning business EPS growing slightly faster than sales.
Sales dynamics include further portfolio optimization through divestments that will reduce sales by about €200 million in 2026.
Expect vaccine sales to slightly decline in 2026.
Gross margin expansion is expected to continue.
Underlying R&D will increase moderately, with a placeholder for potential future acquisitions.
Sales and marketing expenses will increase to support growth and launches, while G&A expenses are targeted to remain stable.
Operating income is expected to include around €500 million of capital gains from disposal.
Expect a decrease of around €400 million in R&D reimbursement from Regeneron in 2026.
This decrease will be more than offset by Amvuttra royalties, estimated at approximately €1 billion, resulting in a positive impact of around €500 million to BOI.
Financial expenses are expected to increase due to increased net debt from 2025 and 2026 BD and M&A activities.
Expect a stable, effective tax rate.
Aim to sustainably reach free cash flow of at least 20% of net sales in the medium term.
Targeting a similar inventory reduction in 2026 to progress toward the 20% free cash flow target.
Anticipate profitable growth to continue over at least five years, with an ambition to pursue earnings growth into the next decade.
