Company Reports

Sanofi's wide lineup of branded drugs and vaccines and robust pipeline creates strong cash flows and a narrow economic moat.

Sanofi reported second-quarter net sales growth of 18% and business EPS growth of 33% at constant currencies, fueled by Dupixent's outstanding performance. Management updated full-year guidance to around 10% sales growth and slightly faster business EPS growth. Sanofi's Paris-listed shares fell 9%.

Sanofi's wide lineup of branded drugs and vaccines and robust pipeline creates strong cash flows and a narrow economic moat.

Sanofi reported net sales growth of 14% and business EPS growth of 14% at constant currencies. Management affirmed its guidance for high-single-digit sales growth and slightly faster business EPS growth. Shares are about 1% higher than the previous day's close.

Sanofi's wide lineup of branded drugs and vaccines and robust pipeline creates strong cash flows and a narrow economic moat.

Sanofi reported net sales growth for the quarter of 13% at constant currency exchange rates and business earnings per share growth of 27%. Management gave guidance of high-single-digit growth in net sales for 2026 and slightly faster growth in business EPS.

Sanofi reported net sales growth of 7% at constant currency and business earnings per share growth of 13%. Despite lower flu vaccine sales, Dupixent and Altuviiio continued to drive growth, and management reiterated its full-year guidance of low-double-digit business EPS growth.

Sanofi's wide lineup of branded drugs and vaccines and robust pipeline create strong cash flows and a narrow economic moat. Growth of existing products and new product launches should help offset upcoming patent losses.

Sanofi reported second-quarter net sales growth of 10.1% at constant currency and business earnings per share growth of 8.3%, largely driven by Dupixent and Altuviiio. It raised full-year guidance for revenue growth to high single digits and reiterated its EPS growth target of low double digits.

We have taken a fresh look at our economic moat rating for Sanofi after reassessing our outlook for the company's returns on invested capital over the next 10 years.

Sanofi's wide lineup of branded drugs and vaccines and robust pipeline create strong cash flows and a narrow economic moat. Growth of existing products and new product launches should help offset upcoming patent losses.

Sanofi has entered into an agreement to acquire Blueprint Medicines for $129 per share, or about $9.1 billion. Additional contingent value rights bring the total potential deal value to $9.5 billion. Blueprint is a commercial-stage biotech company focused on mast-cell-driven diseases.

President Trump released an executive order on May 12 calling for a 30-day negotiation period between the Department of Health and Human Services and the biopharma industry, with the threat of a rule from the Centers for Medicare and Medicaid Services to lower US drug prices if no deal is reached.

Sanofi reported net sales growth of 9.7% at constant currency and business earnings per share growth of 15.7%, largely driven by Dupixent and Altuviiio. It reiterated its previous full-year guidance and announced it had completed 72% of its planned EUR 5 billion of share repurchases.

Sanofi's wide lineup of branded drugs and vaccines and robust pipeline create strong cash flows and a wide economic moat. Growth of existing products and new product launches should help offset upcoming patent losses.

Wide-moat Sanofi’s fourth-quarter results and 2025 guidance were in line with expectations. The company also announced a share buyback program of EUR 5 billion and proposed to increase its dividend to EUR 3.92 per share, a more than 4% increase, which we view as incrementally positive. The outlook for 2025 looks attractive given lack of major loss of exclusivity events, foreign exchange tailwinds, and the potential for significant pipeline news flow. We maintain our fair values of EUR 117 per ordinary share and $63 per US ADR.

Following President-elect Donald Trump’s Nov. 14 announcement of the nomination of Robert F. Kennedy Jr. as secretary of the US Department of Health and Human Services, there have seen several more nominations for leadership in the 13 HHS divisions, including Dr. Mehmet Oz (Centers for Medicare and Medicaid Services) on Nov. 19, Dr. Marty Makary (US Food and Drug Administration) and Dr. Dave Weldon (Centers for Disease Control and Prevention) on Nov. 22, and Dr. Jay Bhattacharya (National Institutes of Health) on Nov. 26. Overall, we think these selections show a consistent theme of introducing potential disruptive forces to US healthcare, although their lack of experience and the power of career staffers in these agencies could serve to blunt any significant proposed changes. We continue to see obesity drugs and vaccines as areas of potential scrutiny, although without any clarity on proposals, we’re not making any changes to our fair value estimates following these announcements.

President-elect Donald Trump announced on Nov. 14 that he is nominating Robert F. Kennedy Jr. to be secretary of the Department of Health and Human Services under his new administration in 2025. RFK Jr. has strong views on public health and, if confirmed, could use his position to make changes at several of the 13 HHS divisions. In our Nov. 8 note, we discussed the potential tailwinds of a Trump administration, including possible repeal of the Medicare negotiation provision in the Inflation Reduction Act, less Federal Trade Commission scrutiny of acquisitions, and a likely continuation of lower corporate taxes. However, if RFK’s nomination is confirmed, we expect more “wild card” headwinds to the industry will come to fruition. As the HHS covers the US Food and Drug Administration and the Centers for Disease Control and Prevention, an HHS secretary skeptical of vaccine and obesity drug benefits could work to erode public trust, put up roadblocks for approval of new vaccines, and prevent the CDC from recommending any vaccines that make it through the approval process. With less federal guidance, we think it is possible certain states could waver in support of broad mandates for childhood vaccines. All of these could weigh on sales of vaccines in the US, including covid vaccine makers Moderna and BioNTech and big biopharma vaccine makers like GSK (we model 14% of GSK revenue from US vaccine sales in 2024), Pfizer (12%), Merck (9%), and Sanofi (6%).

We think that President-elect Donald Trump brings a mix of potential headwinds and tailwinds to the biopharma industry, and we’re not making any adjustments to our fair value estimates at this time. We had previously assumed that the most likely case was split control of the presidency and Congress by Democrats and Republicans. However, with Republicans locking in control of the Senate and holding a lead in elections in the House, we think it looks increasingly likely that Trump and his party could have control across both branches of government, making any potential policy priorities more likely to be implemented.

Wide-moat Sanofi reported better-than-expected third-quarter earnings driven by strong performance of the RSV prophylaxis drug Beyfortus and influenza vaccines. We've increased our fair value estimate to EUR 117 and $63 from EUR 113/$61 due to slightly increased forecasts for various drugs, and we currently view the stock as modestly undervalued.