Sanofi Delivers Robust Q1 2017 Financial Results

Paris, April 28, 2017

Sanofi Delivers Robust Q1 2017 Financial Results

  Q1 2017 Change Change at CER Change at CER and CS(1)
IFRS net sales reported €8,648m +11.1% +8.6% +3.5%
IFRS net income reported €5,701m +424.5%
IFRS EPS reported €4.52 +438.1%
Business net income(2) €1,795m +4.2% +1.0%
Business EPS(2) €1.42 +6.0% +3.0%

First-quarter 2017 accounts reflect the acquisition of the former Boehringer Ingelheim Consumer Healthcare (CHC) business and the disposal of the Animal Health business (completed on January 1, 2017(3)). In accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations), Animal Health results in 2016 and gain on disposal in 2017 are reported separately. The first quarter 2017 income statement also reflects the consolidation of European operations related to Sanofi vaccine portfolio, following the termination of the Sanofi Pasteur MSD joint venture (SPMSD JV) with Merck at the end of December 2016.

Q1 2017 sales growth supported by Specialty Care, Vaccines and Emerging Markets

Net sales were €8,648 million, up 11.1% on a reported basis and 8.6%(4) at CER reflecting the acquisition of Boehringer Ingelheim’s (BI) CHC business and full consolidation of Sanofi’s European vaccine operations. At constant structure and CER, net sales were up 3.5%. Sanofi Genzyme (Specialty Care) GBU sales increased 15.5% at CER driven by Multiple Sclerosis products. Diabetes and Cardiovascular GBU sales were down 7.7% at CER; Global Diabetes franchise sales decreased 6.0%. Sanofi Pasteur GBU grew 13.2% at CER and constant structure due to the strong performance of pediatric combinations. CHC GBU sales were up 4.7% at CER and constant structure driven by the performance in Europe. Emerging Markets(5) sales increased 8.5% at CER and constant structure.  
Strong financial results and 2017 guidance confirmed

Business operating income of €2,442 million, up 7.6% at CER and constant structure. Business EPS(2) grew 3.0% at CER to €1.42 and increased 6.0% on a reported basis. Sanofi continues to expect 2017 Business EPS(2) to be stable to -3%(6) at CER, barring unforeseen major adverse events. IFRS net income of €5,701 million (up 424%) included a net gain of €4,427 million resulting from the divestment of Merial.  
Sanofi progresses on its 2020 roadmap Integration of Boehringer Ingelheim CHC business on track, enhancing Sanofi’s position in key categories and regions. Following the termination of the SPMSD JV, European vaccine business now fully driven by Sanofi. Dupixent®, a breakthrough therapy for moderate-to-severe atopic dermatitis, now available to adult patients in the U.S. Soliqua(TM)100/33, first once-daily fixed combination of Lantus® and lixisenatide for type-2 diabetes, launched in the U.S. Kevzara(TM) BLA for the treatment of rheumatoid arthritis granted PDUFA date of May 22, 2017. FDA approval of Xyzal® Allergy 24H for OTC use and launch underway ahead of the U.S. spring allergy season.

Sanofi Chief Executive Officer, Olivier Brandicourt, commented:
“We have started the year with robust growth driven by Specialty Care and Vaccines as well as good performance in Emerging Markets. Our top line in the first quarter also benefited from the integration of the Boehringer Ingelheim CHC and European vaccine businesses. At the same time, the simplified organization continues to contribute to Sanofi’s financial performance. The U.S. launch of Dupixent® for moderate-to-severe atopic dermatitis marks a key innovation milestone on our strategic roadmap and lays the foundation for our new immunology franchise. We are excited to bring this highly innovative medicine to patients suffering from this devastating disease”.

(1) CS: constant structure: adjusted for BI CHC business, termination of SPMSD and others; (2) In order to facilitate an understanding of operational performance, Sanofi comments on the business net income statement. Business net income is a non-GAAP financial measure (see Appendix 8 for definitions). The consolidated income statement for Q1 2017 is provided in Appendix 3 and a reconciliation of IFRS net income reported to business net income is set forth in Appendix 4; (3) The closing of the disposal of Merial in Mexico is expected in 2017; (4) changes in net sales are expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 8); (5) See page 7; (6) 2016 Business EPS was €5.68

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2017 first-quarter Sanofi sales

Unless otherwise indicated, all percentage changes in sales in this press release are stated at CER(7).

In the first quarter of 2017, Company sales were €8,648 million, up 11.1% on a reported basis. Exchange rate movements had a favorable effect of 2.5 percentage points reflecting mainly the positive evolution of the U.S. dollar, Brazilian Real and Japanese Yen which more than offset the negative impact from the Egyptian Pound, Turkish Lira and British Pound. Company sales benefited from the acquisition of BI’s CHC business and full consolidation of Sanofi’s European vaccines operations leading to an increase of 8.6% at CER. At CER and constant structure, Company sales were up 3.5%.

Global Business Units

The table below presents sales by Global Business Unit (GBU) and reflects the organization of Sanofi which became effective as of January 1, 2016. This structure drives deeper specialization, simplifies reporting and provides clear focus on growth drivers. Please note that in Emerging Markets, Specialty Care and Diabetes and Cardiovascular sales are included in the General Medicines and Emerging Markets GBU.

Net Sales by GBU
(€ million)
Q1 2017 Change
(CER)
Change
at CER/CS*
Sanofi Genzyme (Specialty Care)(a)   1,379   +15.5% +15.5%
Diabetes and Cardiovascular(a)   1,419   -7.7% -7.7%
General Medicines & Emerging Markets(b)   3,725   +2.2% +2.1%
Consumer Healthcare (CHC)   1,341   +42.7% +4.7%
Total Pharmaceuticals   7,864   +7.4% +2.6%
Sanofi Pasteur (Vaccines)   784   +22.2 +13.2%
Total Company sales   8,648   +8.6% +3.5%

(a) Does not include Emerging Markets sales- see definition page 7; (b) Includes Emerging Markets sales for Diabetes & Cardiovascular and Specialty Care;
*CS : constant structure

Global Franchises

The table below presents first quarter 2017 sales by global franchise, including Emerging Markets sales, to facilitate comparisons. Appendix 1 provides a reconciliation of sales by GBU and franchise.

Net sales by Franchise
(€ million)
Q1 2017 Change
(CER)
Change
at CER/CS*
Developed
Markets
Change
at CER/CS*
Emerging
Markets
Change
at CER/CS*
Specialty Care 1,620 +15.6% +15.6% 1,379 +15.5% 241 +16.3%
Diabetes and Cardiovascular 1,795 -4.0% -4.0% 1,419 -7.7% 376 +12.3%
Established Rx Products 2,640 +0.6% +0.3% 1,634 -4.1% 1,006 +8.3%
Consumer Healthcare (CHC) 1,341 +42.7% +4.7% 937 +6.1% 404 +1.3%
Generics 468 -2.0% -1.7% 268 -5.0% 200 +3.4%
Vaccines 784 +22.2% +13.2% 468 +14.6% 316 +11.1%
Total net sales 8,648 +8.6% +3.5% 6,105 +1.6% 2,543 +8.5%

*CS : constant structure

Pharmaceuticals

First-quarter Pharmaceuticals sales increased 7.4% to €7,864 million. At constant structure, Pharmaceuticals sales were up 2.6% driven by Multiple Sclerosis, CHC, Rare Disease, Oncology and Cardiovascular franchises.

(7) See Appendix 8 for definitions of financial indicators.

Rare Disease franchise

Net sales (€ million) Q1 2017 Change
(CER)
Myozyme® / Lumizyme® 190 +12.7%
Cerezyme® 176 -4.9%
Fabrazyme® 177 +15.4%
Aldurazyme® 52 +8.3%
Cerdelga® 31 +30.4%
Others 86 +3.8%
Total Rare Diseases 712 +7.6%

In the first quarter, Rare Disease sales increased 7.6% to €712 million driven by the accrual of patients worldwide. Rare Disease sales grew at double digits in the U.S. and Emerging Markets, up 12.2% and 11.1%, respectively.

In the first quarter, Gaucher (Cerezyme® and Cerdelga®) sales decreased 1.0% to €207 million, due to lower Cerezyme® sales in Emerging Markets (down 10.7% to €50 million) mostly driven by ordering patterns in Latin America. Cerdelga® sales increased 30.4% to €31 million of which €25 million were generated in the U.S. (up 26.3%).

First-quarter Fabrazyme® sales were up 15.4% to €177 million, reflecting a continued accrual of new Fabry patients.

Myozyme®/Lumizyme® sales increased 12.7% to €190 million in the first quarter, mainly due to new patient accruals and increased worldwide diagnosis of Pompe disease.

Multiple Sclerosis franchise

Net sales (€ million) Q1 2017 Change
(CER)
Aubagio® 371 +29.7%
Lemtrada® 125 +40.9%
Total Multiple Sclerosis 496 +32.4%

First-quarter Multiple Sclerosis (MS) sales increased 32.4% to €496 million, reflecting strong Aubagio® and Lemtrada® performance in the U.S. and Europe.

In the first quarter, Aubagio® sales increased 29.7% to €371 million driven by the U.S. (up 33.0% to €259 million) and Europe (up 23.0% to €91 million). In the U.S., Aubagio® has achieved market share of 9.0% (source IMS TRX-Q1 2017) and is now the most “switched to” disease modifying therapy in the U.S. (source IMS NPA Market Dynamics).

First-quarter Lemtrada® sales increased 40.9% to €125 million, including €67 million in the U.S. (up 39.1%) and €45 million in Europe (up 31.4%).

Oncology franchise

Net sales (€ million) Q1 2017 Change
(CER)
Jevtana® 97 +5.6%
Thymoglobulin® 72 +7.7%
Taxotere® 47 +2.2%
Eloxatin® 45 +7.1%
Mozobil® 40 +11.4%
Zaltrap® 16 -5.9%
Others 95 +46.0%
Total Oncology 412 +12.8%

First-quarter Oncology sales increased 12.8% to €412 million driven mainly by Jevtana® and boosted by a U.S. government order for Leukine®. Jevtana® sales were up 5.6% to €97 million in the first quarter led by Europe (up 5.7% to €37 million) and Japan. In the first quarter, Thymoglobulin® sales increased 7.7% to €72 million supported by the U.S. (up 8.1% to €41 million).

Eloxatin® sales increased 7.1% to €45 million in the first quarter supported by China (Emerging Markets sales were up 27.6% to €37 million) which offset generic competition in Canada. First-quarter Taxotere® sales increased 2.2% (to €47 million) driven by Emerging Markets (up 23.3% to €37) which offset continued generic competition in Japan.

Diabetes franchise

Net sales (€ million) Q1 2017 Change
(CER)
Lantus® 1,226 -14.1%
Toujeo® 192 +78.6%
Total glargine 1,418 -7.7%
Apidra® 98 +14.1%
Amaryl® 89 +5.7%
Insuman® 27 -15.6%
BGM (Blood Glucose Monitoring) 17
Lyxumia® 7 -22.2%
Soliqua® 4
Total Diabetes 1,663 -6.0%

In the first quarter, Diabetes sales decreased 6.0% to €1,663 million, including lower Lantus® sales in the U.S. First-quarter U.S. Diabetes sales were down 14.7% to €839 million. Sales in Emerging Markets increased 12.1% to €373 million. Sales in Europe were €326 million, a decrease of 3.0%.

In the first quarter, Sanofi glargine (Lantus® and Toujeo®) sales decreased 7.7% to €1,418 million. In the U.S., Sanofi glargine sales of €805 million were down 15.5% and reflected the impact of the exclusion from various CVS commercial formularies. The U.S. Diabetes sales decline is expected to accelerate over the remainder of the year primarily due to the United Health formulary exclusion which started April 1, 2017 as well as an incremental impact from the CVS formulary exclusion. In Europe, Sanofi glargine sales decreased 3.1% to €245 million due to biosimilar competition in several European markets.

Over the quarter, Lantus® sales were €1,226 million down 14.1%. In the U.S., Lantus® sales decreased 20.9% to €690 million mainly reflecting lower average net price and patients switching to Toujeo® as well as the aforementioned impact of formulary exclusions. In Europe, first-quarter Lantus® sales were €199 million (down 14.8%) due to biosimilar competition and patients switching to Toujeo®. In Emerging Markets, sales were up 9.6% to €253 million.

First-quarter Toujeo® sales were €192 million (up 78.6%) of which €115 million (up 42.3%) were recorded in the U.S. and €46 million in Europe.

Amaryl® sales were €89 million, up 5.7% in the first quarter, of which €73 million were generated in Emerging Markets (up 8.5%).

First-quarter Apidra® sales increased 14.1% to €98 million, reflecting double digit growth in the U.S. (up 12.0% to €29 million), Europe (up 12.9% to €35 million), and Emerging Markets (up 20.0% to €24 million).

Since January 2017, Soliqua(TM) 100/33 (insulin glargine 100 Units/mL & lixisenatide 33 mcg/mL injection; lixisenatide was in-licensed from Zealand Pharma) has been available in the U.S. Soliqua(TM) sales were €4 million in the first quarter.

Cardiovascular franchise

First-quarter Praluent® sales (collaboration with Regeneron) were €34 million of which €24 million was in the U.S. and €8 million in Europe. This reflected significant payer utilization management restrictions in the U.S. and limited market access in Europe.

In January 2017, the U.S. District Court for the District of Delaware issued an injunction that required Sanofi and Regeneron to stop marketing, selling and manufacturing Praluent® in the U.S. starting from February 21, 2017. However, on February 8, 2017, the Court of Appeals for the Federal Circuit stayed (suspended) the permanent injunction for Praluent® pending the companies’ appeal. As a result, Sanofi and Regeneron will continue marketing, selling and manufacturing Praluent® in the U.S. during the appeal process. The Court of Appeals is scheduled to hear oral arguments on June 6, 2017.

First-quarter Multaq® sales were €98 million, up 10.5% reflecting 9.6% growth (to €83 million) in the U.S.

Established Rx Products

Net sales (€ million) Q1 2017 Change
(CER)
Lovenox® 415 +2.2%
Plavix® 380 -1.8%
Renvela®/Renagel® 246 +2.1%
Aprovel®/Avapro® 193 +13.0%
Synvisc® /Synvisc-One® 90 -1.1%
Myslee®/Ambien®/Stilnox® 73 -1.4%
Allegra® 68 -13.3%
Other 1,175 -0.2%
Total Established Rx Products 2,640 +0.6%

In the first quarter, Established Rx Products sales increased 0.6% to €2,640 million, reflecting strong performance in Emerging Markets (up 8.2% to €1,006 million) which offset the impact of generic competition to Plavix® in Japan. In the U.S., Established Rx Products sales decreased 4.9% (to €365 million). In Europe, Established Rx Products sales decreased 2.1% to €907 million.

Lovenox® sales increased 2.2% to €415 million in the first quarter, driven by strong performance in Emerging Markets (up 14.3% to €120 million), which offset lower sales in Europe (down 1.5% to €257 million).

In the first quarter, Plavix® sales were down 1.8% to €380 million due to generic competition in Japan that started in June 2015 (sales in Japan were down 33.7% to €64 million). In Emerging Markets, Plavix sales increased 10.8% to €262 million sustained by the performance in China.

First-quarter Renvela®/Renagel® sales increased 2.1% to €246 million. In the U.S. where Sanofi expects generic competition before the end of 2017, first-quarter sales were up 3.1% to €207 million. In Europe, Renvela®/Renagel® sales were down 13.6% to €18 million due to generic competition.

Aprovel®/Avapro® sales were up 13.0% (to €193 million) driven by product sales to our partner in Japan and sales in China.

Consumer Healthcare

CHC sales by geography and category are provided in Appendix 1.

Net sales (€ million) Q1 2017 Change
(CER)
Change
at CER/CS*
Allergy Cough & Cold 414 +58.7% +12.6%
  of which Allegra® 145 -0.7%
  of which Mucosolvan® 35 na na
Pain 324 +45.1% +10.2%
  of which Doliprane® 83 +7.8%
  of which Buscopan® 42 na na
Digestive 229 +55.6% -8.3%
  of which Dulcolax® 47 na na
  of which Enterogermina® 47 +9.5%
  of which Essentiale® 35 -17.9%
  of which Zantac® 27 na na
Nutritionals 164 +36.3% -1.3%
  of which Pharmaton® 17 na na
Other 210 +11.0% +3.1%
  of which Gold Bond® 50 +2.1%
Total Consumer Healthcare 1,341 +42.7% +4.7%

*CS : constant structure

In the first quarter, Consumer Healthcare (CHC) sales increased 42.7% to €1,341 million reflecting the closing of the acquisition of Boehringer Ingelheim CHC business on January 1st, 2017 and the transfer of some Sanofi products to the new Chinese joint-venture between Sanofi and China Resources Sanjiu (CR999). At constant structure, Sanofi CHC sales increased 4.7% in the first quarter mainly driven by the strong performance in Europe.

In Europe, CHC sales were up 68.2% to €406 million. At constant structure, sales were up 10.0%, due to an early cough and cold season. Over the period double-digit growth at constant structure was achieved by the Allergy Cough and Cold category (up 21.6%, driven by Mucosolvan®, Bisolvon® and Allegra®) and the pain category (up 15.7% driven by Buscopan® and Doliprane®).

In the U.S., first quarter CHC sales increased 18.7% to €348 million. At constant structure, CHC sales were up 2.4% driven by the launch of Xyzal® Allergy 24HR (sales of €43 million) which was approved in February as an over-the-counter treatment for the relief of symptoms associated with seasonal and year-round allergies. In the first quarter, the performance at constant structure of the Allergy, Cough and Cold (up 12.9%, driven by Xyzal® launch) and Pain categories (up 16.7%) were partially offset by lower sales of the Digestive category (down 19.2%, impacted by lower sales of Dulcolax® and Zantac®). 

In Emerging Markets, first-quarter CHC sales increased 20.9% to €404 million. At constant structure, CHC sales were up 1.3% reflecting lower sales in Russia which continued to be impacted by the economic environment. In Emerging Markets, the strong performance at constant structure of the Allergy Cough and Cold category (up 14.1%) was partially offset by lower sales of the Digestive category due to Essentiale®.

In the rest of the world, CHC sales were up 151.5% to €183 million. At constant structure, CHC sales were up 4.9% mainly driven by the Nutritionals and Pain categories.

Generics

In the first quarter, Generics sales decreased 2.0% to €468 million reflecting lower sales in Europe (down 3.4% to €198 million), and a 2.8% increase in Emerging Markets (to €200 million).

As announced in our 2020 strategic roadmap, Sanofi has carefully reviewed all options for our Generics business in Europe and made the definitive decision to initiate a carve-out process expected to be completed by the end of 2018. Importantly, Sanofi confirms its commitment to Generics in other parts of the world with a greater focus on the Emerging Markets.

Vaccines

Net sales (€ million) Q1 2017 Change
(CER)
Change
at CER/CS*
Polio/Pertussis/Hib vaccines
(incl. Pentacel®, Pentaxim® and Imovax®)
432 +46.2% +38.0%
Influenza vaccines
(incl. Vaxigrip® and Fluzone®)
38 +85.0% +85.0%
Adult Booster vaccines (incl. Adacel ®) 79 -5.0% -23.2%
Meningitis/Pneumonia vaccines
(incl. Menactra®)
95 -24.6% -24.6%
Travel and other endemic vaccines 106 +25.3% +8.3%
Dengvaxia® 17 -5.3% -5.3%
Other vaccines 17 +23.1% +14.3%
Total Vaccines (consolidated sales) 784 +22.2% +13.2%

*CS : constant structure

First quarter consolidated Vaccines sales were up 22.2% to €784 million and reflected the termination of the Sanofi Pasteur MSD joint-venture in Europe from December 31, 2016. At constant structure, sales were up 13.2% mainly driven by the Polio/Pertussis/Hib (PPH) franchise. In the U.S., sales were up 13.5% to €287 million. In Emerging Markets, sales grew 11.5% to €316 million. In Europe, sales were up 110.4% to €100 million reflecting the termination of SPMSD JV. At constant structure, European sales were up 4.1%.

In the first quarter, Polio/Pertussis/Hib vaccines sales increased 46.2% to €432 million. At constant structure, PPH sales grew 38.0% reflecting supply recovery of Pentacel® and CDC order phasing in the U.S. (U.S. Pentacel® sales: €89 million versus €21 million in the first quarter of 2016), and increased release of Pentaxim® batches in China.

Influenza vaccines sales were up 85.0% to €38 million boosted by supply to Butantan in Brazil in the first quarter.

First-quarter Adult Booster vaccines sales were €79 million, down 5.0%, or down 23.2% at constant structure impacted by Repevax® supply disruption in Europe.

First quarter Dengvaxia® sales were €17 million mainly reflecting the sales of the third dose for the public immunization program implemented in the Philippines at the beginning of 2016.

First-quarter Menactra® sales were down 21.6% to €90 million mainly due to the U.S. CDC ordering pattern in the previous year.

First-quarter Travel and other endemic vaccines sales were €106 million up 25.3% and up 8.3% at constant structure.

Company sales by geographic region       

Sanofi sales (€ million) Q1 2017 Change
(CER)
Change
(CER/CS)
United States 2,764 +3.0% +1.2%
Emerging Markets(a) 2,543 +11.3% +8.5%
  of which Latin America 676 +18.6% +12.0%
  of which Asia (including South Asia(b)) 983 +13.4% +12.4%
  of which Africa, Middle East 546 +1.6% -0.7%
  of which Eurasia(c) 298 +14.3% +9.9%
Europe(d) 2,411 +10.4% +1.8%
Rest of the World(e) 930 +14.9% +2.2%
  of which Japan 529 +19.9% -0.6%
Total Sanofi sales 8,648 +8.6% +3.5%

*CS : constant structure
(a) World excluding U.S., Canada, Western & Eastern Europe (except Eurasia), Japan, South Korea, Australia, New Zealand and Puerto Rico
(b) India, Bangladesh, Sri Lanka
(c) Russia, Ukraine, Georgia, Belarus, Armenia and Turkey
(d) Western Europe + Eastern Europe except Eurasia
(e) Japan, South Korea, Canada, Australia, New Zealand, Puerto Rico

First-quarter sales in the U.S. were €2,764 million, an increase of 3.0% or 1.2% at constant structure driven mainly by the Multiple Sclerosis franchise (up 34.2%), Vaccines (up 13.5%), Oncology (up 23.1%), Rare Diseases (up 12.2%) and Cardiovascular (up 25.6%) which offset lower sales of Diabetes (down 14.7%).

First-quarter sales in Emerging Markets were €2,543 million, up 11.3% or 8.5% at constant structure driven by Established Rx products (up 8.3% at constant structure), Diabetes (up 12.1%), Vaccines (up 11.5%), Oncology (up 22.6%) and Rare Disease (up 11.1%). In Asia, first quarter sales were up 13.4% (up 12.4% at constant structure) to €983 million reflecting strong performance in China (up 17.0% at constant structure to €597 million), driven by Pharmaceuticals and also by the end of the vaccines market disruption. In Latin America, first quarter sales increased 18.6% (up 12.0% at constant structure) to €676 million sustained by Brazil. First-quarter sales in Brazil increased 24.5% at constant structure to €320 million supported by performance of Established Rx Products, Vaccines, generics and CHC. First-quarter sales in the Eurasia region increased 14.3% (9.9% at constant structure) to €298 million supported by strong growth in Turkey. Over the quarter, sales in Russia were €147 million up 0.9% and down 4.3% at constant structure impacted by local economic conditions. In Africa and the Middle East, sales were €546 million up 1.6% or down 0.7% at constant structure reflecting lower sales in Middle East due to phasing of vaccines supply and a modest growth in Africa.

First-quarter sales in Europe were €2,411 million, up 10.4% or 1.8% at constant structure, mainly driven by the performance of the Multiple Sclerosis franchise (up 25.7%) and CHC (up 10.0% at constant structure) which offset lower sales in Diabetes (down 3.0%) and Established Rx Products (down 3.1% at constant structure).

Sales in Japan increased 19.9% to €529 million in the first quarter. At constant structure, sales in Japan were down 0.6% impacted by generic Plavix® competition which was partially offset by strong growth of vaccines sales.

R&D update

Consult Appendix 6 for full overview of Sanofi’s R&D pipeline

Regulatory update

Regulatory updates since the publication of 2016 full-year results on February 8, 2017 include the following:

  • In April, the FDA approved a new dosing regimen for Praluent® of 300 mg administered subcutaneously once monthly (every 4 weeks).
     
  • In April the European Medicine Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) granted a positive opinion for the marketing authorization of  Kevzara® (sarilumab), recommending its approval for use in adult patients with moderately to severely active rheumatoid arthritis.
     
  • In March, the U.S. Food and Drug Administration (FDA) approved Dupixent® (dupilumab), the first and only biologic medicine approved for the treatment of adults with moderate-to-severe atopic dermatitis (AD) whose disease is not adequately controlled with topical prescription therapies, or when those therapies are not advisable.
     
  • Following successful conclusion of Le Trait manufacturing site inspection by FDA, the Kevzara(TM) (sarilumab) U.S. BLA was accepted in April for the treatment of rheumatoid arthritis with a PDUFA date of May 22, 2017.

At the end of April 2017, the R&D pipeline contained 46 pharmaceutical new molecular entities (excluding Life Cycle Management) and vaccine candidates in clinical development of which 13 are in Phase 3 or have been submitted to the regulatory authorities for approval.

Portfolio update

Phase 4:

  • Top-line results of the ODYSSEY OUTCOMES study on Praluent® are now expected to be reported in the first quarter of 2018 based on communications from the independent DSMB (Data and Safety Monitoring Board). Recruitment for this 18,600-patient cardiovascular outcomes trial was completed in November 2015 and the scheduled two-year follow-up of patients is underway.

Phase 3:

  • The results of the CAFÉ study evaluating dupilumab in cyclosporine-resistant patients in moderate-to-severe atopic dermatitis were positive and demonstrated an acceptable safety profile. These results will be submitted to the EMA and presented at a scientific Congress.
  • In March, detailed results from the one-year Phase 3 CHRONOS study were presented at the Annual Meeting of the American Academy of Dermatology (AAD). In this study, patients receiving Dupixent® with topical corticosteroids (TCS) achieved significantly improved measures of overall disease severity compared to TCS alone in adults with uncontrolled moderate-to-severe AD with a safety profile consistent with previous studies.

Phase 2:

  • SP0232 / MEDI8897 (partnership with MedImmune), a monoclonal antibody, entered the portfolio in Phase 2 for the prevention of lower respiratory tract illness in infants caused by respiratory syncytial virus.
  • SAR566658, a maytansin-loaded anti-CA6 monoclonal antibody, entered into Phase 2 for the treatment of triple negative breast cancer.
  • A Phase 2 study was initiated to evaluate isatuximab in acute lymphoblastic leukemia.

Phase 1:

  • SAR440181 / MYK491 (collaboration with MyoKardia), for the treatment of dilated cardiomyopathy (DCM1 myosin activation), entered Phase 1.

2017 first-quarter financial results(8)

Business Net Income(8)

In the first quarter of 2017, Sanofi generated sales of €8,648 million, an increase of 11.1% (up 8.6% at CER).

First-quarter other revenues increased 71.7% (up 66.9% at CER) to €249 million including VaxServe sales of non-Sanofi products of €173 million (versus €83 million in the first quarter of 2016).

First-quarter Gross Profit increased 13.1% to €6,200 million (up 10.6% at CER). At CER and constant structure*, Gross Profit increased 5.4%. The gross margin ratio improved by 1.3 percentage points to 71.7% versus the first quarter of 2016, mainly reflecting the positive impact of the growing Multiple Sclerosis business, a favorable product and geographical mix in our Established Rx Product franchise, as well as industrial productivity improvements. These impacts more than offset the negative U.S. Diabetes net price evolution. In the first quarter, the gross margin ratio of Pharmaceuticals was 73.1%, an improvement of 1.6 percentage points and the gross margin ratio of Vaccines decreased 0.6 percentage points to 58.0%. Sanofi expects its gross margin ratio to be approximately 70% at CER in 2017.

Research and Development expenses increased 6.0% to €1,309 million (up 4.0% at CER) in the first quarter. At CER and constant structure*, R&D expenses were up 2.1% reflecting the increased spending on our development programs in oncology (isatixumab, PD-1) and sotagliflozin.

First-quarter selling general and administrative expenses (SG&A) were up 12.0% to €2,478 million (up 9.5% at CER).
At CER and constant structure*, SG&A was up 1.5% mainly reflecting launch costs for Dupixent®, Kevzara(TM) and Xyzal®, commercial and marketing investments behind key Emerging countries and our Europe Vaccines business, as well as one-time costs associated with the integration of Boehringer Ingelheim CHC business. On the other hand, our Diabetes sales and marketing spending in the U.S. was adapted to the new competitive environment.

First-quarter other current operating income net of expenses was €34 million versus €93 million for the same period of 2016. In the first quarter of 2016, this line included an arbitration award of €192 million to Sanofi and also a foreign exchange loss related to Venezuela (€92 million).

The share of profits from associates was €30 million in the first quarter versus €23 million for the same period of 2016. The share of profits from associates included Sanofi’s share in Regeneron profit.

In the first quarter, non-controlling interests were -€35 million versus -€27 million in the first quarter of 2016.

First-quarter business operating income increased 15.0% to €2,442 million. At CER, business operating income increased 11.7%. At CER and constant structure*, business operating income increased 7.6%. The ratio of business operating income to net sales increased 0.9 percentage point to 28.2% versus the same period of 2016. In the first quarter, the business operating income ratio of Pharmaceuticals was 30.1%, 1.4 percentage points higher and the business operating income ratio of Vaccines increased 0.7 percentage points to 13.5%.

Net financial expenses were €63 million in the first quarter versus €117 million in the first quarter of 2016, reflecting mainly a lower cost of net debt.

First-quarter effective tax rate was 24.5% compared with 22.6% in the first quarter of 2016.

First-quarter business net income(8) increased 4.2% to €1,795 million (up 1.0% at CER). The ratio of business net income to net sales increased 0.9 percentage points to 20.8% versus the same period of 2016 (excluding Animal Health business).

In the first quarter of 2017, business earnings per share(8) (EPS) increased 6.0% to €1.42 on a reported basis and 3.0% at CER. The average number of shares outstanding was 1,262.4 million in the first quarter of 2017 versus 1,288.4 million in the first quarter of 2016.

(8) See Appendix 3 for 2017 first-quarter Consolidated income statement; see Appendix 8 for definitions of financial indicators, and Appendix 4 for reconciliation of IFRS net income reported to business net income.
* Adjusted for BI CHC business and termination of SPMSD

2017 guidance

Sanofi expects 2017 Business EPS to be stable to -3% at CER, barring unforeseen major adverse events, consistent with its previously announced Strategic Roadmap guidance for the 2016-17 period. Applying the average March 2017 exchange rates to the rest of the year, the currency impact on 2017 Business EPS is estimated to be +3% to +4%.

Reconciliation of IFRS net income reported to business net income (see Appendix 4)

In the first quarter of 2017, the IFRS net income was €5,701 million reflecting the acquisition of BI’s CHC business and full consolidation of Sanofi’s European vaccine operations. The main items excluded from the business net income were:

  • A net gain of €4,427 million resulting from the divestment of the Animal Health business (subject to post-closing adjustment).
     
  • A €503 million amortization charge related to fair value remeasurement on intangible assets of acquired companies (primarily Aventis: €104 million, Genzyme: €231 million and BI CHC business €66 million) and to acquired intangible assets (licenses/products: €37 million). These items have no cash impact on the Company.
     
  • A charge of €36 million mainly reflecting an increase of Bayer contingent considerations linked to Lemtrada® (charge of €21 million) and CVR fair value adjustment (charge of €16 million).
     
  • Expenses of €88 million arising from the impact of the acquisition of BI CHC business and the termination of SPMSD joint venture on inventories.
     
  • Restructuring costs and similar items of €119 million mainly related to the organizational transformation program at the industrial level in Europe and North America.
     
  • A €248 million tax effect arising from the items listed above, comprising €182 million of deferred taxes generated by amortization charged against intangible assets, €43 million associated with restructuring costs and similar items, €28 million associated with the impact of acquisition on inventories and €6 million associated with fair value remeasurement of contingent consideration liabilities. 
     
  • An expense of €24 million net of tax related to restructuring costs of associates and joint-ventures, and expenses arising from the impact of acquisitions on associates and joint-ventures.

Capital Allocation

In the first quarter of 2017, net cash generated by operating activities was €954 million after capital expenditures of €382 million and an increase in working capital of €766 million. This net cash flow largely funded acquisitions and partnerships net of disposals (€222 million) and restructuring costs and similar items (€211 million). The swap between BI CHC business and Sanofi Animal Health business generated a net cash flow of €5,288 million (pre-tax amount as tax payments on the gain are expected in the next quarters), partially used to finance share repurchases (€1,289 million) over the quarter. As a consequence, net debt decreased from €8,206 million at December 31, 2016 to €3,685 million at March 31, 2017 (amount net of €14,924 million cash and cash equivalents).

Forward-Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans” and similar expressions. Although Sanofi’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, Sanofi’s ability to benefit from external growth opportunities and/or obtain regulatory clearances, risks associated with intellectual property and any related pending or future litigation and the  ultimate outcome of such litigation,  trends in exchange rates and prevailing interest rates, volatile economic conditions, the impact of cost containment initiatives and subsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in Sanofi’s annual report on Form 20-F for the year ended December 31, 2016. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.

Appendices

List of appendices

Appendix 1:  2017 first-quarter net sales by GBU, franchise, geographic region and product

 

Appendix 2: 2017 first-quarter Business net income statement

 

Appendix 3: 2017 first-quarter consolidated income statement

 

Appendix 4: Reconciliation of IFRS net income reported to business net income

 

Appendix 5: Currency sensitivity

 

Appendix 6: R&D pipeline

 

Appendix 7: Expected R&D milestones

 

Appendix 8: Definitions of non-GAAP financial indicators

Appendix 1: 2017 first-quarter net sales by GBU, franchise, geographic region and product

                                 
Q1 2017
(€ million)
Total
GBUs
%
CER
% re-
ported
Eu-
rope
%
CER
United States %
CER
Rest of the Wo-
rld
%
CER
  Emer-
ging
Mar-
kets
% CER   Total
Fran-
chises
%
CER
% re-
ported
Aubagio 363 30.1% 33.5% 91 23.0% 259 33.0% 13 30.0%   8 14.3%   371 29.7% 33.0%
Lemtrada 120 41.2% 41.2% 45 31.4% 67 39.1% 8 150.0%   5 33.3%   125 40.9% 42.0%
Total MS 483 32.8% 35.3% 136 25.7% 326 34.2% 21 64.3%   13 20.0%   496 32.4% 35.1%
Cerezyme 126 -2.4% 0.0% 68 -2.8% 46 0.0% 12 -9.1%   50 -10.7%   176 -4.9% -3.3%
Cerdelga 31 30.4% 34.8% 5 66.7% 25 26.3% 1 0.0%   0   31 30.4% 34.8%
Myozyme 163 11.0% 11.6% 82 5.1% 67 18.2% 14 16.7%   27 25.0%   190 12.7% 14.5%
Fabrazyme 158 12.3% 14.5% 40 8.1% 93 13.9% 25 13.6%   19 54.5%   177 15.4% 18.8%
Aldurazyme 35 0.0% 0.0% 19 0.0% 11 0.0% 5 0.0%   17 30.8%   52 8.3% 8.3%
Total Rare
Disease
589 6.9% 9.5% 231 2.6% 274 12.2% 84 2.7%   123 11.1%   712 7.6% 10.2%
Taxotere 10 -37.5% -37.5% 1 0.0% 1 0.0% 8 -42.9%   37 23.3%   47 2.2% 2.2%
Jevtana 89 4.8% 6.0% 37 5.7% 40 2.6% 12 9.1%   8 16.7%   97 5.6% 7.8%
Eloxatine 8 -38.5% -38.5% 2 100.0% 0 6 -50.0%   37 27.6%   45 7.1% 7.1%
Thymoglobulin 57 7.8% 11.8% 10 11.1% 41 8.1% 6 0.0%   15 7.1%   72 7.7% 10.8%
Mozobil 38 12.1% 15.2% 11 10.0% 25 14.3% 2 0.0%   2 0.0%   40 11.4% 14.3%
Zaltrap 15 -6.3% -6.3% 13 8.3% 2 -50.0% 0   1 0.0%   16 -5.9% -5.9%
Total Onco-
logy
307 9.9% 12.0% 88 8.6% 181 23.1% 38 -26.0%   105 22.6%   412 12.8% 15.1%
Sanofi Genzyme
(Spe-
cialty Care)
1,379 15.5% 18.0% 455 9.8% 781 23.1% 143 -1.5%   241 16.3%   1,620 15.6% 18.2%
Lantus 973 -18.8% -16.6% 199 -14.8% 690 -20.9% 84 -9.1%   253 9.6%   1,226 -14.1% -12.1%
Toujeo 176 66.0% 70.9% 46 142.1% 115 42.3% 15 133.3%   16   192 78.6% 86.4%
Apidra 74 12.3% 13.8% 35 12.9% 29 12.0% 10 11.1%   24 20.0%   98 14.1% 15.3%
Amaryl 16 -5.9% -5.9% 5 -37.5% 1 -100.0% 10 37.5%   73 8.5%   89 5.7% 1.1%
Insuman 21 -4.8% 0.0% 20 -4.8% 1 0.0% 0 0.0%   6 -36.4%   27 -15.6% -15.6%
Total Diabetes 1,290 -10.3% -8.1% 326 -3.0% 839 -14.7% 125 5.2%   373 12.1%   1,663 -6.0% -4.1%
Multaq 96 10.7% 14.3% 11 0.0% 83 9.6% 2   2 0.0%   98 10.5% 14.0%
Praluent 33 166.7% 175.0% 8 200.0% 24 155.6% 1   1   34 175.0% 183.3%
Total Cardio-
vascular
129 30.2% 34.4% 19 42.9% 107 25.6% 3   3 50.0%   132 30.6% 34.7%
Diabetes &
Cardio-
vascular
1,419 -7.7% -5.3% 345 -1.1% 946 -11.5% 128 7.0%   376 12.3%   1,795 -4.0% -2.0%
Plavix 380 -1.8% -2.1% 39 -7.1% 0 -100.0% 79 -27.9%   262 10.8%   380 -1.8% -2.1%
Lovenox 415 2.2% 2.7% 257 -1.5% 15 -6.7% 23 -4.5%   120 14.3%   415 2.2% 2.7%
Renagel /
Renvela
246 2.1% 5.1% 18 -13.6% 207 3.1% 9 0.0%   12 20.0%   246 2.1% 5.1%
Aprovel 193 13.0% 14.2% 31 -6.1% 3 -25.0% 45 61.5%   114 8.5%   193 13.0% 14.2%
Allegra 68 -13.3% -9.3% 2 50.0% 0 66 -15.1%   0   68 -13.3% -9.3%
Myslee /
Ambien /
Stilnox
73 -1.4% 4.3% 10 -9.1% 15 0.0% 29 -10.0%   19 21.4%   73 -1.4% 4.3%
Synvisc /
Synvisc
One
90 -1.1% 2.3% 8 0.0% 67 -4.5% 4 150.0%   11 -9.1%   90 -1.1% 2.3%
Depakine 112 9.8% 9.8% 40 2.5% 0 4 -25.0%   68 17.2%   112 9.8% 9.8%
Tritace 62 3.2% 0.0% 39 -2.5% 0 1   22 4.5%   62 3.2% 0.0%
Lasix 35 2.9% 2.9% 18 -5.3% 0 2 -50.0%   15 23.1%   35 2.9% 2.9%
Targocid 37 0.0% 0.0% 19 -5.0% 0 1 -50.0%   17 13.3%   37 0.0% 0.0%
Other Rx Drugs 929 -1.6% 0.1% 426 -1.4% 58 -24.3% 99 3.3%   346 1.8%   929 -1.6% 0.1%
Total Estab-
lished Rx
 Products
2,640 0.6% 1.9% 907 -2.1% 365 -4.9% 362 -6.3%   1,006 8.2%   2,640 0.6% 1.9%
Generics 468 -2.0% 2.0% 198 -3.4% 37 -28.6% 33 26.9%   200 2.8%   468 -2.0% 2.0%
Total Emerging
Markets
Specialty Care
241 16.3% 19.3%               241 16.3%        
Total Emerging
 Markets Dia-
betes & Cardio-
vascular
376 12.3% 12.9%               376 12.3%        
General Medicines
 & Emerging Markets
3,725 2.2% 3.9% 1,105 -2.4% 402 -7.6% 395 -4.1%   1,823 9.5%   3,108 0.2% 1.9%
Allergy, Cough & Cold 414 58.7% 63.0% 107 197.2% 154 12.9% 62 176.2%   91 36.9%   414 58.7% 63.0%
Pain 324 45.1% 50.7% 139 47.4% 44 16.7% 29 600.0%   112 27.5%   324 45.1% 50.7%
Digestive 229 55.6% 61.3% 85 59.3% 44 500.0% 12 450.0%   88 3.8%   229 55.6% 61.3%
Nutritionals 164 36.3% 45.1% 33 17.9% 1 0.0% 63 65.7%   67 26.5%   164 36.3% 45.1%
Consumer
Healthcare
1,341 42.7% 48.2% 406 68.2% 348 18.7% 183 151.5%   404 20.9%   1,341 42.7% 48.2%
                                 
Total Pharma-
ceuticals
7,864 7.4% 9.9% 2,311 8.1% 2,477 1.9% 849 13.1%   2,227 11.3%   7,864 7.4% 9.9%
                                 
Polio / Pertussis / Hib 432 46.2% 50.0% 57 147.8% 127 105.0% 44 64.0%   204 11.1%   432 46.2% 50.0%
Adult Booster Vaccines 79 -5.0% -1.3% 17 21.4% 45 -15.7% 8 14.3%   9 0.0%   79 -5.0% -1.3%
Meningitis/Pneumonia 95 -24.6% -22.1% 1 71 -30.3% 2 -33.3%   21 0.0%   95 -24.6% -22.1%
Influenza Vaccines 38 85.0% 90.0% 0 -100.0% 3 0.0% 10 100.0%   25 118.2%   38 85.0% 90.0%
Travel And other
 endemic Vaccines
106 25.3% 27.7% 22 187.5% 29 16.7% 14 18.2%   41 0.0%   106 25.3% 27.7%
Dengue 17 -5.3% -10.5% 0 0 0   17 -5.3%   17 -5.3% -10.5%
Vaccines 784 22.2% 25.4% 100 110.4% 287 13.5% 81 38.2%   316 11.5%   784 22.2% 25.4%
Total Company 8,648 8.6% 11.1% 2,411 10.4% 2,764 3.0% 930 14.9%   2,543 11.3%   8,648 8.6% 11.1%
                                 

Appendix 2: 2017 First-quarter Business net income statement

First Quarter 2017 Pharmaceuticals Vaccines Others Total Group
€ million Q1
 2017
Q1
2016
Change Q1
 2017
Q1
2016
Change Q1
 2017
Q1
2016
Q1
 2017
Q1
2016
Change
Net sales 7,864 7,158 9.9% 784 625 25.4%     8,648 7,783 11.1%
Other revenues 76 54 40.7% 173 91 90.1%     249 145 71.7%
Cost of sales (2,195) (2,097) 4.7% (502) (350) 43.4%     (2,697) (2,447) 10.2%
As % of net sales (27.9%) (29.3%)   (64.0%) (56.0%)       (31.2%) (31.4%)  
Gross profit 5,745 5,115 12.3% 455 366 24.3%     6,200 5,481 13.1%
As % of net sales 73.1% 71.5%   58.0% 58.6%       71.7% 70.4%  
Research and development expenses (1,170) (1,108) 5.6% (139) (127) 9.4%     (1,309) (1,235) 6.0%
As % of net sales (14.9%) (15.5%)   (17.7%) (20.3%)       (15.1%) (15.9%)  
Selling and general expenses (2,271) (2,046) 11.0% (207) (166) 24.7%     (2,478) (2,212) 12.0%
As % of net sales (28.9%) (28.6%)   (26.4%) (26.6%)       (28.7%) (28.4%)  
Other current operating income
/expenses
69 107   (3)   (32) (14) 34 93  
Share of profit/loss of associates* and joint-ventures 30 16   7       30 23  
Net income attributable to non-controlling interests (35) (27)         (35) (27)  
Business operating income 2,368 2,057 15.1% 106 80 32.5% (32) (14) 2,442 2,123 15.0%
As % of net sales 30.1% 28.7%   13.5% 12.8%       28.2% 27.3%  
    Financial income and expenses (63) (117)  
  Income tax expense (584) (455)  
  Tax rate** 24.5% 22.6%  
  Business net income excl. Animal Health business 1,795 1,551 15.7%
  As % of net sales 20.8% 19.9%  
  Business Net Income of Animal Health business 171  
         
  Business Net Income 1,795 1,722 4.2%
         
  Business earnings / share (in euros) *** 1.42 1.34 6.0%

             
*     Net of tax.
**    Determined on the basis of Business income before tax, associates and non-controlling interests (excluding Animal Health business).
***  Based on an average number of shares outstanding of 1,262.4 million in the first quarter of 2017 and 1,288.4 million in the first quarter of 2016.

Appendix 3: 2017 first-quarter consolidated income statement

€ million Q1 2017 (1) Q1 2016 (1)
Net sales 8,648 7,783
Other revenues 249 145
Cost of sales (2,785) (2,447)
Gross profit 6,112 5,481
Research and development expenses (1,309) (1,235)
Selling and general expenses (2,478) (2,212)
Other operating income 60 217
Other operating expenses (26) (124)
Amortization of intangible assets (503) (444)
Impairment of intangible assets
Fair value remeasurement of contingent consideration (36) (29)
Restructuring costs and similar items (119) (500)
  Other gains and losses and litigation
Operating income 1,701 1,154
Financial expenses (111) (129)
Financial income 48 12
Income before tax and associates and joint ventures 1,638 1,037
Income tax expense (336) (117)
Share of profit/loss of associates and joint ventures 6 93
Net income excluding the held for exchange Animal Health business 1,308 1,013
Net income from the held for exchange Animal Health business 4,427 100
Net income 5,735 1,113
Net income attributable to non-controlling interests 34 26
Net income attributable to equity holders of Sanofi 5,701 1,087
Average number of shares outstanding (million) 1,262.4 1,288.4
Earnings per share (in euros) excluding the held for exchange Animal Health business 1.01 0.77
IFRS earnings per share (in euros) 4.52 0.84

(1) Animal Health results in 2016 and gain on disposal in 2017 reported separately in accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations).

Appendix 4: Reconciliation of IFRS net income reported to business net income

€ million Q1 2017 Q1 2016 Change
Net income attributable to equity holders of Sanofi 5,701 1,087 424.5%
Amortization of intangible assets(1) 503 444  
Impairment of intangible assets  
Fair value remeasurement of contingent
consideration
36 29  
Expenses arising from the impact of acquisitions on inventories 88  
Restructuring costs and similar items 119 500  
Other gains and losses, and litigation  
Tax effect of items listed above: (248) (338)  
  Amortization of intangible assets (182) (156)  
  Impairment of intangible assets  
  Fair value remeasurement of contingent consideration (6) (11)  
  Expenses arising from the impact of acquisitions on inventories (28)  
  Restructuring costs and similar items (43) (171)  
  Other tax effects 11  
Other tax items  
Share of items listed above attributable to non-controlling interests (1) (1)  
Restructuring costs of associates and joint-ventures, and expenses arising from the impact of acquisitions on associates and joint-ventures 24 (70)  
Animal Health items(2)/(3) (4,427) 71  
Business net income 1,795 1,722 4.2%
IFRS earnings per share(4) (in euros) 4.52 0.84  

(1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations:  €466 million in the first quarter of 2017 and €410 million in the first quarter of 2016.
(2) In 2017, net gain resulting from the divestment of the Animal Health business (based on preliminary closing statements).
(3) In 2016, includes the following items: impact of the discontinuation of depreciation and impairment of Property, Plant & Equipment starting at IFRS 5 application (Non-current held for sale and discontinued operations), impact of the amortization and impairment of intangible assets until IFRS 5 application, costs incurred as a result of the divestment as well as tax effect of these items.
(4) Based on an average number of shares outstanding of 1,262.4 million in the first quarter of 2017 and 1,288.4 million in the first quarter of 2016.

Appendix 5: currency sensitivity

2017 Business EPS currency sensitivity

Currency Variation Business EPS Sensitivity
U.S. Dollar -0.05 USD/EUR +EUR 0.13
Japanese Yen +5 JPY/EUR -EUR 0.02
Chinese Yuan +0.2 CNY/EUR -EUR 0.02
Brazilian Real +0.4 BRL/EUR -EUR 0.02
Russian Ruble +10 RUB/EUR -EUR 0.03

Currency exposure on Q1 2017 sales

Currency Q1 2017
US $ 32.9%
Euro € 24.5%
Chinese Yuan 6.2%
Japanese Yen 5.6%
Brazilian Real 3.5%
British Pound 1.9%
Russian Ruble 1.7%
Australian $ 1.6%
Canadian $ 1.5%
Mexican Peso 1.1%
Others 19.5%

Currency average rates

  Q1 2016 Q1 2017 Change
€/$ 1.10 1.06 -3.3%
€/Yen 127.02 121.12 -4.6%
€/Yuan 7.21 7.32 +1.5%
€/Real 4.31 3.35 -22.3%
€/Ruble 82.47 62.53 -24.2%

Appendix 6: R&D Pipeline

: New Molecular Entity
: Registration Study

Registration

N
sarilumab
Anti-IL6R mAb
Rheumatoid arthritis, U.S, EU

Dengvaxia®(1)
Mild-to-severe
dengue fever vaccine

N
Dupixent®
Anti-IL4Ralpha mAb
Atopic dermatitis, EU

PR5i
DTP-HepB-Polio-Hib
Pediatric hexavalent vaccine, U.S.
N
SAR342434
insulin lispro
Type 1+2 diabetes
VaxiGrip® QIV IM(2)
Quadrivalent inactivated
influenza vaccine (3 years+)

Phase 3

 

dupilumab
Anti-IL4Ralpha mAb
Asthma, Nasal polyposis

Clostridium difficile
Toxoid vaccine
N
isatuximab
Anti-CD38 naked mAb
Relapsed Refractory Multiple myeloma

VaxiGrip® QIV IM
Quadrivalent inactivated
influenza vaccine (6-35 months)

N
patisiran (ALN-TTR02)
siRNA inhibitor targeting TTR
Familial amyloidotic polyneuropathy

Pediatric pentavalent vaccine
DTP-Polio-Hib
Japan
N
GZ402666
neo GAA
Pompe Disease

Men Quad TT
2nd generation meningococcal
ACYW conjugate vaccine 
N
sotagliflozin
Oral SGLT-1&2 inhibitor
Type 1 & Type 2 diabetes

 

(1) Approved in 16 countries to date
(2) Approved in 28 countries as of end March 2017

Phase 2

dupilumab
Anti-IL4Ralpha mAb
Eosinophilic oesophagitis

N – R
olipudase alfa
rhASM Deficiency
Acid Sphingomyelinase Deficiency(1)

Rabies VRVg
Purified vero rabies vaccine

N
SAR156597
 IL4/IL13 Bi-specific mAb
Idiopathic pulmonary fibrosis / Systemic Scleroderma

N
GZ402671
Oral GCS inhibitor
Gaucher related Parkinson’s Disease, Gaucher Disease Type 3, Fabry Disease

Tuberculosis
Recombinant subunit vaccine

N
GZ389988
 TRKA antagonist
Osteoarthritis

N
fitusiran (ALN-AT3)
siRNA targeting Anti-Thrombin
Hemophilia


Fluzone
® QIV HD
Quadrivalent inactivated
influenza vaccine – High dose
 

sarilumab
Anti-IL6R mAb
Uveitis

N
efpeglenatide
Long-acting GLP-1 receptor agonist
Type 2 diabetes


Adacel+
Tdap booster
N
SAR422459
ABCA4 gene therapy
Stargardt disease

N
SAR425899
GLP-1R/GCGR dual agonist
Type 2 diabetes


Shan 6
DTP-HepB-Polio-Hib
Pediatric hexavalent vaccine
N – R
SAR439684
PD-1 inhibitor
Advanced CSCC (Skin cancer)

N
SAR100842
LPA1 receptor antagonist
Systemic sclerosis


HIV

Viral vector prime & rgp120 boost vaccine
 

isatuximab
Anti-CD38 naked mAb
Acute Lymphoblastic Leukemia

N
SAR439152
Myosin inhibitor
Hypertrophic cardiomyopathy

 

SP0232(2)
Monoclonal antibody
Respiratory syncytial virus

 

N
SAR566658
Maytansin-loaded anti-CA6 mAb
Solid tumors

N – R
Combination
ferroquine / OZ439
Antimalarial

 

(1) Also known as Niemann Pick type B
(2) Also known as MEDI8897

Phase 1

N
SAR440340
Anti-IL33 mAb
Asthma & COPD

 

N
SAR408701
Maytansin-loaded anti-CEACAM5 mAb
Solid tumors

N
SAR247799
S1P1 agonist
Cardiovascular Indication
N
SAR439794
TLR4 agonist
Peanut allergy

 

N
SAR428926
Maytansin-loaded anti-Lamp1 mAb
Cancer

 

N
SAR407899
rho kinase
Microvascular angina
N
GZ402668
GLD52 (anti-CD52 mAb)
Relapsing multiple sclerosis

 

N
SAR438335
GLP-1R/GIPR dual agonist
Type 2 diabetes

 

Herpes Simplex Virus Type 2
HSV-2 vaccine

N
UshStat®
Myosin 7A gene therapy
Usher syndrome 1B

 

N
SAR341402
Rapid acting insulin
Diabetes
Zika
Inactivated Zika vaccine

N
SAR228810
Anti-protofibrillar AB mAb
Alzheimer’s disease

 

N
SAR440181(1)
DCM1 Myosin activation
Dilated cardiomyopathy
Respiratory syncytial virus
Infants

(1) Also known as MYK491

Appendix 7: Expected R&D milestones

Products Expected milestones Timing
dupilumab Start of Phase 3 trial in Asthma in 6-11 year-olds Q2 2017
Kevzara®(1) U.S. regulatory decision in Rheumatoid Arthritis Q2 2017
Kevzara®(1) European Commission decision in Rheumatoid Arthritis Q2 2017
Dupixent®(1) Start of Phase 3 trial in Atopic Dermatitis in 6-11 year-olds Q3 2017
Fitusiran Start of Phase 3 trial in Hemophilia Q3 2017
Fluzone QIV HD Start of Phase 3 trial Q3 2017
VaxiGrip® QIV IM (6-35 months) EU regulatory submission Q3 2017
dupilumab Phase 3 results in Asthma in Adult patients Q4 2017
dupilumab U.S. regulatory submission in Asthma in Adult patients Q4 2017
patisiran Phase 3 results in Familial amyloidotic polyneuropathy Q4 2017
efpeglenatide Start of Phase 3 trial in type-2 Diabetes Q4 2017
sotagliflozine Start of Phase 3 trials in combination therapies in type-2 Diabetes 2017
isatuximab Start of additional Phase 3 trials in Multiple Myeloma and additional indications 2017
SAR439684 (PD-1) Phase 2/3 to start in NSCLC(2) and BCC(3) 2017
Praluent® ODYSSEY OUTCOMES top-line results Q1 2018

(1) Name received conditional approval
(2) Non-Small Cell Lung Cancer
(3) Basal Cell Carcinoma

Appendix 8: Definitions of non-GAAP financial indicators

Company
“Company” corresponds to Sanofi and its subsidiaries

Company sales at constant exchange rates (CER)
When we refer to changes in our net sales “at constant exchange rates” (CER), this means that we exclude the effect of changes in exchange rates.
We eliminate the effect of exchange rates by recalculating net sales for the relevant period at the exchange rates used for the previous period.

Reconciliation of net sales to Company sales at constant exchange rates for the first quarter of 2017

€ million Q1 2017
Net sales 8,648
Effect of exchange rates (194)
Company sales at constant exchange rates 8,454

Business net income

Sanofi publishes a key non-GAAP indicator.
Business net income is defined as net income attributable to equity holders of Sanofi excluding:

  • amortization of intangible assets,
  • impairment of intangible assets,
  • fair value remeasurement of contingent consideration related to business combinations or to disposals,
  • other impacts associated with acquisitions (including impacts of acquisitions on associates and joint ventures),
  • restructuring costs and similar items(1),
  • other gains and losses (including gains and losses on disposals of non-current assets(1)),
  • costs or provisions associated with litigation(1),
  • tax effects related to the items listed above as well as effects of major tax disputes,
  • tax (3%) on dividends paid to Sanofi shareholders,
  • Animal Health items out of business net income(2),
  • Net income attributable to non-controlling interests related to the items listed above.
(1) Reported in the line items Restructuring costs and similar items and Gains and losses on disposals, and litigation, which are defined in Note B.20. to our consolidated financial statements.
(2) In 2016, impact of discontinuation of depreciation and impairment of Property, Plant and Equipment starting at IFRS 5 application (non-current assets held for sales and discontinued operations), amortization and impairment of intangible assets until IFRS 5 application and costs incurred as a result of the divestment as well as tax effect of these items; and in 2017 gain on the disposal of the Animal Health business, net of tax.

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Sanofi and Regeneron Announce Kevzara® (sarilumab) Biologics License Application Resubmission Accepted for Review by US FDA

Sanofi and Regeneron Announce Kevzara® (sarilumab) Biologics License Application Resubmission Accepted for Review by US FDA


– New action date for Kevzara U.S. BLA is May 22, 2017 –

Paris, France and Tarrytown, New York – April 28, 2017 – Sanofi and Regeneron Pharmaceuticals, Inc. today announced that the U.S. Food and Drug Administration has accepted the resubmission of Biologics License Application for Kevzara® (sarilumab) as a Class I response with a two month review timeline. Per the Prescription Drug User Fee Act (PDUFA), the new target action date is May 22, 2017. Kevzara is an investigational human monoclonal antibody directed against the IL-6 receptor being evaluated for the treatment of adult patients with moderately to severely active rheumatoid arthritis (RA) who have had an inadequate response or intolerance to one or more disease modifying antirheumatic drugs (DMARDs), such as methotrexate.[1]

The companies recently received a positive opinion for Kevzara from the European Medicine Agency’s Committee for Medicinal Products for Human Use, and the European Commission is expected to make a final decision on the Marketing Authorization Application for Kevzara in the European Union in the coming months. In Canada, Kevzara is approved for use in adult patients with moderately to severely active RA who have had an inadequate response or intolerance to one or more biologic or non-biologic DMARDs. The companies are also seeking approvals in a number of other countries globally.

About Sanofi
Sanofi, a global healthcare leader, discovers, develops and distributes therapeutic solutions focused on patients’ needs. Sanofi is organized into five global business units: Diabetes and Cardiovascular, General Medicines and Emerging Markets, Sanofi Genzyme, Sanofi Pasteur and Consumer Healthcare. Sanofi is listed in Paris (EURONEXT: SAN) and in New York (NYSE: SNY).

About Regeneron Pharmaceuticals, Inc.
Regeneron (NASDAQ: REGN) is a leading science-based biopharmaceutical company that discovers, invents, develops, manufactures and commercializes medicines for the treatment of serious medical conditions. Regeneron commercializes medicines for eye diseases, high LDL cholesterol, atopic dermatitis and a rare inflammatory condition and has product candidates in development in other areas of high unmet medical need, including rheumatoid arthritis, asthma, pain, cancer and infectious diseases. For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter 

Sanofi Forward-Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates regarding the clinical development of and potential marketing approvals for the product. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”, “will be” and similar expressions. Although Sanofi’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development of the product, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve the product  as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of the product, the absence of guarantee that the product if approved will be commercially successful, risks associated with intellectual property, future litigation, the future approval and commercial success of therapeutic alternatives, and volatile economic conditions, as well as those risks discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in Sanofi’s annual report on Form 20-F for the year ended December 31, 2016. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.

Regeneron Forward-Looking Statements and Use of Digital Media
This news release includes forward-looking statements that involve risks and uncertainties relating to future events and the future performance of Regeneron Pharmaceuticals, Inc. (“Regeneron” or the “Company”), and actual events or results may differ materially from these forward-looking statements. Words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” variations of such words, and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. These statements concern, and these risks and uncertainties include, among others, the nature, timing, and possible success and therapeutic applications of Regeneron’s products, product candidates, and research and clinical programs now underway or planned, including without limitation Kevzara® (sarilumab) for the treatment of adult patients with moderately to severely active rheumatoid arthritis or other potential indications; the likelihood and timing of possible regulatory approval and commercial launch of Regeneron’s late-stage product candidates, such as Kevzara (including possible regulatory approval of Kevzara by the U.S. Food and Drug Administration based on the Biologics License Application discussed in this news release); the impact of the opinion adopted by the European Medicine Agency’s Committee for Medicinal Products for Human Use discussed in this news release on the European Commission’s decision regarding the Marketing Authorization Application for Kevzara in the European Union; unforeseen safety issues resulting from the administration of products and product candidates in patients, including serious complications or side effects in connection with the use of Regeneron’s product candidates in clinical trials, such as Kevzara; determinations by regulatory and administrative governmental authorities which may delay or restrict Regeneron’s ability to continue to develop or commercialize Regeneron’s products and product candidates, such as Kevzara; ongoing regulatory obligations and oversight impacting Regeneron’s marketed products, research and clinical programs, and business, including those relating to patient privacy; competing drugs and product candidates that may be superior to Regeneron’s products and product candidates; uncertainty of market acceptance and commercial success of Regeneron’s products and product candidates and the impact of studies (whether conducted by Regeneron or others and whether mandated or voluntary) on the commercial success of Regeneron’s products and product candidates, including without limitation Kevzara; the ability of Regeneron’s collaborators, suppliers, or other third parties to perform filling, finishing, packaging, labelling, distribution, and other steps related to Regeneron’s products and product candidates; coverage and reimbursement determinations by third-party payers, including Medicare and Medicaid; the ability of Regeneron to manufacture and manage supply chains for multiple products and product candidates; unanticipated expenses; the costs of developing, producing, and selling products; the ability of Regeneron to meet any of its sales or other financial projections or guidance and changes to the assumptions underlying those projections or guidance; the potential for any license or collaboration agreement, including Regeneron’s agreements with Sanofi, Bayer HealthCare LLC, and Teva Pharmaceutical Industries Ltd. (or their respective affiliated companies, as applicable), to be cancelled or terminated without any further product success; and risks associated with intellectual property of other parties and pending or future litigation relating thereto, including without limitation the patent litigation relating to Praluent® (alirocumab) Injection, the permanent injunction granted by the United States District Court for the District of Delaware that, if upheld on appeal, would prohibit Regeneron and Sanofi from marketing, selling, or commercially manufacturing Praluent in the United States, the outcome of any appeals regarding such injunction, the ultimate outcome of such litigation, and the impact any of the foregoing may have on Regeneron’s business, prospects, operating results, and financial condition. A more complete description of these and other material risks can be found in Regeneron’s filings with the United States Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2016. Any forward-looking statements are made based on management’s current beliefs and judgment, and the reader is cautioned not to rely on any forward-looking statements made by Regeneron. Regeneron does not undertake any obligation to update publicly any forward-looking statement, including without limitation any financial projection or guidance, whether as a result of new information, future events, or otherwise.

Regeneron uses its media and investor relations website and social media outlets to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Regeneron is routinely posted and is accessible on Regeneron’s media and investor relations website (http://newsroom.regeneron.com) and its Twitter feed (http://twitter.com/regeneron).

Contacts Sanofi:

Media Relations
Ashleigh Koss
Tel: 1 (908) 981-8745
ashleigh.koss@sanofi.com

Investor Relations
George Grofik
Tel.: +33 (0)1 53 77 45 45
ir@sanofi.com


Contacts Regeneron:

Media Relations
Arleen Goldenberg
Tel: 1 (914) 847-3456
Mobile: +1 (914) 260-8788
arleen.goldenberg@regeneron.com

Investor Relations
Manisha Narasimhan, Ph.D.
Tel: 1 (914) 847-5126
Manisha.narasimhan@regeneron.com

[1] Kevzara (sarilumab) Prescribing Information. May 2017

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Zealand reports Q1 2017 royalty revenue

Company announcement – No. 13/2017

Zealand reports Q1 2017 royalty revenue

  • Zealand reports royalty revenue of DKK 8.0 million in Q1 2017
  • DKK 5.1 million arises from royalties on sales of Lyxumia®/Adlyxin(TM)
  • DKK 2.9 million arises from royalties on the first sales of Soliqua® 100/33 in the U.S.

Copenhagen, April 28, 2017 – Zealand Pharma (“Zealand”) reports Q1 2017 royalty revenue from Sanofi’s sales of Lyxumia®/Adlyxin(TM) (lixisenatide) of DKK 5.1 million and from Soliqua® 100/33 of DKK 2.9 million.

Lixisenatide is a once-daily prandial GLP-1 receptor agonist for the treatment of patients with type 2 diabetes and was invented by Zealand. Zealand licensed the global development and commercialization rights to lixisenatide to Sanofi. Lixisenatide is marketed under the brand name Lyxumia® in over 45 countries and was launched in the United States under the brand name Adlyxin(TM) in January 2017.

Sanofi has also developed a combination of lixisenatide and insulin glargine 100 units/mL (Lantus®), which was launched under the brand name Soliqua®100/33 in the United States in January 2017 and is expected to launch under the brand name Suliqua® in certain EU countries starting from the second quarter of 2017.

Since January 2017, Soliqua® 100/33 (insulin glargine 100 Units/mL & lixisenatide 33 mcg/mL injection) has been available by prescription in US pharmacies. Soliqua® 100/33 is approved in the United States as an adjunct therapy to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus inadequately controlled on basal insulin (less than 60 Units daily) or lixisenatide alone.  

Zealand’s Interim report for the first three months of 2017 will be published on May 17 and  will contain more information relating to the launch of Soliqua® 100/33.

For further information, please contact:

Britt Meelby Jensen, CEO and President
Tel.: +45 51 67 61 28, e-mail: bmj@zealandpharma.com

Mats Blom, Senior Vice President, Chief Financial Officer
Tel.: +45 31 53 79 73, e-mail: mabl@zealandpharma.com

About Zealand Pharma A/S
Zealand Pharma A/S (Nasdaq Copenhagen: ZEAL) (“Zealand”) is a biotechnology company focused on the discovery, design and development of innovative peptide-based medicines. Zealand has a portfolio of medicines and product candidates under license collaborations with Sanofi, Boehringer Ingelheim and Helsinn, and a pipeline of product candidates focusing on specialty gastrointestinal and metabolic diseases.
2
Zealand’s first invented medicine, lixisenatide, a once-daily prandial GLP-1 receptor agonist for the treatment of type 2 diabetes, is licensed to Sanofi. Lixisenatide is marketed as Adlyxin® in the U.S. and as Lyxumia® in the rest of the world. Lixisenatide has been developed in a combination with basal insulin glargine (Lantus®) and is marketed as Soliqua® 100/33 in the U.S. and has been approved as Suliqua(TM) in Europe.

Zealand’s pipeline includes: dasiglucagon* (ZP4207, single-dose rescue treatment) for acute, severe hypoglycemia (Phase 2); glepaglutide* (ZP1848) for short bowel syndrome (Phase 2); dasiglucagon* (ZP4207, multiple-dose version) intended for use in a dual-hormone artificial pancreas system for improved hypoglycemia control and diabetes management (Phase 2) and other earlier-stage clinical and preclinical peptide therapeutics.

Zealand is based in Copenhagen (Glostrup), Denmark. For further information about the Company’s business and activities, please visit www.zealandpharma.com or follow Zealand on Twitter @ZealandPharma.

* Dasiglucagon and glepaglutide are proposed International Nonproprietary Names (pINN).

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