Sanofi, despite COVID-19, sees early gains from CEO Hudson’s strategy revamp
Less than a year ago, Sanofi’s CEO Paul Hudson unveiled the company’s new “play to win” strategy that centers the company on growth drivers such as Dupixent and vaccines. And that strategy delivered in the third quarter as Dupixent posted blockbuster sales and flu vaccines set a revenue record.
First approved in March 2017, immunology med Dupixent delivered its first blockbuster quarter, generating €918 million ($1.07 billion) worldwide, a 69% leap at constant exchange rates. The jump came despite disruptions from the COVID-19 pandemic, such as a slowdown in doctor visits, execs said on a Thursday conference call with analysts.
By the end of the third quarter, as in-office visits picked up, new Dupixent prescriptions reached pre-COVID levels, Sanofi specialty care head Bill Sibold said Thursday. The drug delivered a “strong franchise performance in a still difficult environment,” Sibold said, and the company is “fully confident” in its €10 billion peak sales goal for the drug.
The company’s Dupixent performance comes as other drugmakers struggle in dermatology offices, Hudson added.
In China, Dupixent won approval earlier this year, and the company is now working to score a spot on the country’s national drug reimbursement list. Long term, Sanofi expects it to generate $1 billion per year or more in that country, Sibold said. All told, Sanofi will have launched the drug in about 50 countries by the end of 2020, the exec said.
After taking the reins as CEO last September, Hudson set out the company’s new strategy in December. Sanofi backed away from research in the struggling diabetes and cardiovascular disease areas, and instead focused its R&D engine on “first-in-class” or “best-in-class” drugs in other fields. The strategy includes focusing its sales and marketing efforts on growth products.
Meanwhile, it has been squeezing out costs across the business. Sanofi moved to cut jobs in support functions, ratchet back manufacturing budgets, tighten up purchasing, cut down on travel and more.
Now, Sanofi is “ahead of where I thought where we’d be despite the challenges externally,” Hudson said Thursday.
Aside from Dupixent, vaccines generated €2.08 billion ($2.43 billion), a 14% jump from the same period last year. Flu vaccines pulled in €1.07 billion ($1.24 billion), a record for Sanofi, as the COVID-19 pandemic made influenza vaccination top-of-mind for people around the world.
Other vaccines struggled, though. Sales for travel vaccines slipped 54%, while meningitis vaccine revenues fell 26% and sales for adult booster shots fell 13%.
Also losing ground was the general medicines franchise, which posted a revenue decline of 6.4% to €3.6 billion ($4.2 billion) due to volume-based procurement in China and the struggling U.S. diabetes market. Consumer healthcare sales slipped 1.1%, as well.
In all, Sanofi’s sales grew 5.7% at constant exchange rates to €9.48 billion ($11 billion). With the performance, Sanofi increased its 2020 earnings per share guidance to 8% growth at constant exchange rates, from a prior expectation of 7% growth. But the company expects currency factors to hurt earnings by 6% to 7%.