Sanofi Shares Rise on Strong 1Q -- Update

   By Donato Paolo Mancini 
 

Shares in French pharmaceuticals giant Sanofi SA (SAN.FR) soared in early trading Friday, after it posted net profit and sales increases alongside an EPS beat for the first quarter, underpinned by the gains reaped from investment in specialty care.

At 0819 GMT Paris-traded shares were up 3.7% at EUR76.39.

Analysts at Citi said the quarterly result was solid, noting the 9% beat in earnings per share as well as other notable beats in vaccines and in Sanofi's oncology and rare-disease franchise. Citi expects the growth outlook for the Paris-based company will improve, as its collaboration with Regeneron Inc. (REGN) becomes more profitable and headwinds in the diabetes market abate. The bank has Sanofi stock among its favorite picks.

Business net income, an important adjusted net profit metric for the French pharma company, was 1.77 billion euros ($1.97 billion), or EUR1.42 a share, up 9% at constant exchange rates. IFRS net profit was EUR1.14 billion, or EUR0.91 a share.

Sanofi backed its outlook for the 2019 business EPS, still expecting 3% to 5% growth.

Sales were EUR8.39 billion, buoyed by specialty care and vaccines. Analysts had expected sales of EUR8.45 billion. Sales in the diabetes franchise declined 6.9%. The United States accounted for 30% of the company's revenue in the first-quarter.

Indeed, as major pharma players refocus efforts on higher-value drugs, including specialty-care medicines, market participants worry whether companies will be ready to react and adapt to U.S. health-care sector changes floated by the Democratic Party as presidential elections loom next year. Public discourse has so far mainly hinged on pricing and, Sanofi, with its exposure to the U.S., could be affected by any structural changes.

"We are very vocal and clear about our pricing strategy in the U.S.," Chief Financial Officer Jean-Baptiste de Chatillon said in a call with reporters Friday.

"We are not expecting anything major that is not already known and described in the last communications we made about this," he said when asked whether the company was positioning itself strategically in terms of any structural health-care reform in the U.S.

A spokesman later Friday said Sanofi recently participated in Senate and House committee hearings on the issue, and that its price increases are at or below the U.S. National Health Expenditure projected growth rate. Sanofi cut the price of one of its insulins for certain patients with diminished access to $99 a month, hours before one of its executives testified in Congress earlier this month.

Write to Donato Paolo Mancini at [e-mail]

(END) Dow Jones Newswires

April 26, 2019 04:37 ET (08:37 GMT)

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