PARIS (Reuters) - Strong sales growth at Sanofi’s (SASY.PA) Genzyme rare diseases business drove better than expected second quarter profit, allowing the French drugmaker to narrow its 2018 target.
Sanofi, which has been hurt by declining diabetes sales and a struggle to find enough new products in recent years, confirmed on Tuesday it was poised for stronger growth in the second half as it builds upon acquisitions made earlier this year.
Although there was some market relief at the results, shares in Sanofi were down 0.22 percent at 0741 GMT. The stock is up almost 3 percent year-to-date.
“Overall, investors were nervous of a worse result. As we have previously said this is a ‘show me story’ and the company is showing us that they can generally deliver on promises,” Deutsche Bank analysts wrote in a note to clients.
In January Sanofi bought U.S hemophilia specialist Bioverativ for $11.6 billion and Belgium’s Ablynx, which is developing an experimental drug for a rare blood disorder, for 3.9 billion euros ($4.57 billion).
Sanofi is awaiting regulatory approval for Ablynx’s Cablivi (caplacizumab) for the treatment of acquired thrombotic thrombocytopenic purpura (aTTP), which can be fatal. Ablynx had forecast peak caplacizumab sales of 1.2 billion euros, although Sanofi said in January it was premature to make a prediction.
The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) last month recommended the approval of caplacizumab, while the U.S Food & Drug Administration (FDA), which has granted the drug a ‘Fast Track’ designation, is expected to follow suit in early 2019.
Sanofi believes some 7,500 patients present acquired TTP symptoms across the United States, the European Union and Japan and it hopes to launch caplacizumab in Germany later this year.
The drugmaker said its second-quarter business net income was up 0.4 percent at constant exchange rates at 1.558 billion euros, while revenue was up 0.1 percent at 8.176 billion.
Sales at Genzyme surged 33.1 percent to 1.8 billion euros with revenue from Dupixent, developed in partnership with U.S Regeneron (REGN.O) for atopic dermatitis, reaching 176 million euros and beating market expectations by 12 percent.
Vaccines revenue, however, fell 15.7 percent, hit by the supply constraint of a combination infant vaccine in China. Diabetes and cardiovascular sales were down 15.6 percent.
Analysts polled by Reuters in partnership with Inquiry Financial had on average been expecting a business net income of 1.536 billion euros on revenue of 8.279 billion.
Sanofi, which had last quarter predicted earnings per share growth this year of 2 to 5 percent, said it now expects a 3-5 percent target range.
Reporting by Matthias Blamont; Editing by Sudip Kar-Gupta/Louise Heavens/Alexander Smith