Focused on ensuring growth beyond Dupixent, Sanofi wants to acquire derisked assets that may benefit from the French pharma’s commercial capabilities, executives said on Friday as they reported third-quarter earnings.
Sanofi is pursuing deals for late-stage and commercial medicines after delivering another beat-and-raise quarter that emphasized its reliance on Dupixent.
The French drugmaker plans to use its “robust cash flow generation to fund business development and M&A transactions, in particular with a focus on later-stage and/or commercial opportunities,” Sanofi CEO Belén Garijo said on the company’s third-quarter earnings call. Sanofi CFO François Roger added that a “strong balance sheet and low leverage allow us to access external financing” to fund deals for the next set of growth drivers.
“We are laser-focused on ensuring growth beyond Dupixent [loss of exclusivity],” Garijo said. “We know that the pipeline and the R&D research will take a bit of time to materialize and bear fruits. Moving to later-stage commercial assets will allow us to derisk scientifically and clinically but also leverage our commercial capabilities much better.”
Garijo was speaking after a quarter in which Sanofi’s cornerstone drug Dupixent and struggling vaccine franchise outperformed expectations. Sanofi posted net sales of €14.4 billion ($16.1 billion), beating the €13.3 billion ($14.0 billion) consensus estimate that Guggenheim Securities analysts shared in a note to investors Friday. Sanofi’s net sales increased 14.3% at a constant exchange rate.
For the full year, Sanofi now expects sales to grow by a low-teens percentage at constant currencies. The company had forecast full-year growth of about 10% in July and was aiming to achieve high single-digit growth when it reported its first quarter results in April.
Dupixent sales increased 34.8%, climbing to almost €5.7 billion ($5.3 billion). Sanofi attributed the fast growth to strong demand across a range of indications. Guggenheim analysts expected Sanofi to report Dupixent sales of just under €5 billion ($5.6 billion).
Sanofi’s reliance on Dupixent, which accounted for 39% of net sales in the quarter, is a focus for analysts ahead of a 2031 patent expiry. Newer products are growing but remain small compared to Dupixent. Led by the hemophilia A drug Altuviiio, a set of 13 launch products generated €1.4 billion ($1.6 billion) in the quarter, up 31.4% from the same period last year.
Vaccine sales, meanwhile, fell 6.6%. Yet, at €3.2 billion ($3.6 billion), they still beat the €2.8 billion ($3.1 billion) forecast by Guggenheim analysts. Sanofi cited the timing of flu vaccine deliveries and lower sales of its RSV vaccine Beyfortus as drivers of declining revenue. In the U.S., Beyfortus sales fell 39.3% to €240 million ($269 million), in part because of a smaller order from the CDC.
Roger declined to directly answer an analyst’s question about how much Sanofi could spend on a deal, although he did reiterate that the company wants to retain a strong credit rating. In April, Roger said Sanofi could spend up to €15 billion ($16.8 billion) on R&D deals while retaining its credit rating. Buying a commercial asset could add up to €10 billion ($11 billion) to Sanofi’s spending power, Roger said.
As well as targeting late-phase and commercial assets, Sanofi will continue to ink bolt-on acquisitions to expand its earlier-stage pipeline, Garijo said. The company plans to “source innovation globally, including from China,” the CEO added.
