Sanofi Announces Strong Q3 2016 Results
(Thomson Reuters ONE) -
Paris, October 28, 2016
Sanofi Announces Strong Q3 2016 Results
Q3 2016 Change Change (CER) 9M 2016 Change Change (CER)
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IFRS net sales ?9,028m +2.0% +3.0% ?24,954m -2.1% +0.5%
reported
IFRS net income ?1,674m +2.8% ?3,919m -0.9%
reported
IFRS EPS reported ?1.30 +4.0% ?3.04 +0.3%
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Aggregate Company ?9,652m +2.1% +3.0% ?27,063m -1.3% +1.2%
sales((1))
Business net ?2,300m +9.7% +11.1% ?5,702m +0.7% +4.1%
income((2))
Business EPS((2)) ?1.79 +11.2% +12.4% ?4.43 +2.3% +5.8%
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Following the announcement of exclusive negotiations with Boehringer Ingelheim
and as per the IFRS 5 presentation requirement for discontinued operations, net
income for Sanofi's Animal Health business (Merial) will be reported on a
separate line ("Net income from the held for exchange Animal Health Business")
in the Consolidated Income Statement for Q3 2016 and for 9M 2016, and the prior
year. As of September 30 2016, Sanofi continues to report the performance of the
Animal Health business, which remained an operating segment consistent with IFRS
8 and was included in the key performance indicators of the Company.
+------------------------------------------------------------------------------+
|2016 guidance raised on strong third-quarter financial results |
| * Aggregate Company sales((1)) increased 3.0%((3)) (up 2.1% at 2016 exchange|
| rates) to ?9,652 million. |
| * IFRS EPS reported was up 4.0% to ?1.30. |
| * Business EPS((2)) was up 12.4% at CER to ?1.79 and up 11.2% on a reported |
| basis. |
| * Given the performance in the first nine months, Sanofi now expects 2016 |
| Business EPS((2)) to grow between 3% |
| and 5%((4)) at CER, barring unforeseen major adverse events. |
|Continuing to execute the simplification of the portfolio consistent with our |
|2020 Roadmap |
| * Decision to initiate a carve-out process in order to divest the EU |
| Generics business within 12-24 months. |
| * CHC asset swap with Boehringer Ingelheim on track to close around year- |
| end. |
| * Cost savings now expected to be at least ?1.5 billion by 2018. |
|Initiating a ?3.5 billion share repurchase program to be completed by the end |
|of 2017 |
|Solid sales performance despite continuing headwinds in diabetes and the |
|Plavix LOE in Japan |
| * Sanofi Genzyme (Specialty Care) GBU continues to deliver double-digit |
| growth (+16.9%). |
| * Sanofi Pasteur grew 14.4% supported by early flu vaccines shipment in the |
| U.S. |
| * Diabetes and Cardiovascular GBU sales decreased 2.5%. Global diabetes |
| franchise sales declined 1.5%. |
| * Aggregate sales in Emerging Markets((5)) grew 5.6% driven by Diabetes and |
| Rare Disease portfolios. |
|Major launches and regulatory updates |
| * Toujeo(®) generated worldwide sales of ?167 million. LixiLan PDUFA date |
| extended to November 2016. |
| * Praluent(®) now approved in 41 countries. |
| * Dengvaxia® generated sales of ?30 million and is now approved in 13 |
| countries. |
| * Sarilumab: CGMP(6) observations during an FDA inspection of a Sanofi |
| "fill-finish" facility could impact approval timing. |
| * Dupixent(®) (dupilumab) BLA accepted for priority review by U.S. FDA with |
| March 29, 2017 PDUFA date. |
+------------------------------------------------------------------------------+
Sanofi Chief Executive Officer, Olivier Brandicourt, commented:
"We have generated solid sales momentum in the third quarter and seen a strong
contribution to our financial performance from savings and efficiencies
arising from our more focused organization. As a result, we are able to
increase our FY 2016 Business EPS guidance. In addition, we have continued to
work diligently to progress our major launches and the pipeline. With the
filing of Dupixent(®), we now have another important product under FDA review
which we believe will enhance Sanofi's growth profile in the coming years."
(1) Including Merial (see Appendix 8 for definition of Aggregate Company sales)
which is reported on a single line in the consolidated income statements in
accordance with IFRS 5 (Non-current assets held for sale and discontinued
operations). Additionally, Sanofi comments include Merial for every income
statement line using the term "Aggregate"; (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 Q3 2016 and
9M 2016 is provided in Appendix 4 and a reconciliation of business net income to
IFRS net income reported is set forth in Appendix 3; (3) Percentage changes in
net sales and Aggregate sales are expressed at constant exchange rates (CER)
unless otherwise indicated (see Appendix 8); (4) 2015 Business EPS was ?5.64;
(5) See page 8; (6) Current Good Manufacturing Practice
Investor Relations: (+) 33 1 53 77 45 45 - E-mail: IR(at)sanofi.com - Media
Relations: (+) 33 1 53 77 46 46 - E-mail: MR(at)sanofi.com
Website: www.sanofi.com Mobile app: SANOFI IR available on the App Store and
Google Play
2016 third-quarter and nine-month Aggregate Sanofi sales
Unless otherwise indicated, all percentage changes in sales in this press
release are stated at CER((7)).
In the third quarter of 2016, Aggregate Company sales were ?9,652 million, up
2.1% at 2016 exchange rates. Exchange rate movements had a negative effect of
0.9 percentage points, primarily reflecting the adverse evolution of the
Argentine Peso, Chinese Yuan, and British Pound, which more than offset the
positive effects from the Japanese Yen and Brazilian Real. At CER, Aggregate
Company sales increased 3.0%. Year-to-date Aggregate Company sales reached
?27,063 million, down 1.3% at 2016 exchange rates. Exchange rate movements had
an unfavorable effect of 2.5 percentage points.
The first nine months performance included a negative currency impact related to
the change of exchange rate applied for the translation of Venezuela operations,
resulting from the evolution of the exchange system in February 2016 as well as
from the persistent inability to exchange Venezuelan bolivars for U.S. dollars
at the privileged official rate. In addition, in the first half of 2015, Sanofi
benefited from a significant increase in product demand in Venezuela, due to
buying patterns associated with local market conditions. As a consequence, sales
in Venezuela were ?9 million in the first nine months of 2016 compared to ?423
million in the first nine months of 2015 (no sales were recorded in the third
quarter of 2016 compared to ?24 million in the third quarter of 2015). Excluding
Venezuela, Aggregate Company sales increased 3.3% and 2.8% in the third quarter
and first nine months of 2016, respectively.
Global Business Units
The table below presents sales by Global Business Units (GBU) and reflects the
organization of Sanofi which became effective as of January 1, 2016. In this
organizational structure, all Pharmaceutical sales in Emerging Markets are now
included in the General Medicines and Emerging Markets GBU. This new reporting
structure simplifies Sanofi, deepens specialization and allows clear focus on
growth drivers.
Net Sales by GBU Q3 2016 Change 9M 2016 Change
(? million) (CER) (CER)
Sanofi Genzyme (Specialty Care)((a)) 1,270 +16.9% 3,684 +19.1%
Diabetes and Cardiovascular((a)) 1,585 -2.5% 4,687 -3.9%
General Medicines & Emerging 4,370 -2.4%((c)) 13,358 -4.1%((e))
Markets((b))
Sanofi Pasteur (Vaccines) 1,803 +14.4% 3,225 +11.0%((f))
Merial (Animal Health) 624 +4.0% 2,109 +10.3%
Total Aggregate Company sales 9,652 +3.0%((d)) 27,063 +1.2%((g))
(a) Does not include Emerging Markets sales- see definition page 8; (b) Includes
Emerging Markets sales for Diabetes & Cardiovascular and Specialty Care; (c)
Excluding Venezuela: -1.9%; (d) Excluding Venezuela: +3.3%; (e) Excluding
Venezuela:-1.4%; (f) Excluding Venezuela: +11.3%; (g) Excluding Venezuela:+2.8%;
Global Franchises
The table below presents sales by global franchise, which facilitates
straightforward peer comparisons. Appendix 1 provides a reconciliation of sales
by GBU and franchise.
Net sales by Change Developed Change Emerging Change
Franchise Q3 2016 (CER) Markets (CER) Markets (CER)
(? million)
Specialty Care 1,517 +18.5% 1,270 +16.9% 247 +26.5%((a))
Diabetes and 1,929 +0.3%((b)) 1,585 -2.5% 344 +14.2%((c))
Cardiovascular
Established Products 2,535 -7.4%((d)) 1,587 -12.5% 948 +1.7%((e))
Consumer Healthcare 791 -1.2%((f)) 479 +1.3% 312 -4.7%((g))
(CHC)
Generics 453 +1.3%((h)) 257 +2.8% 196 -0.5%((i))
Vaccines 1,803 +14.4% 1,458 +16.4% 345 +6.6%
Animal Health 624 +4.0% 468 +1.1% 156 +13.3%
Total Aggregate net 9,652 +3.0%((j)) 7,104 +2.1% 2,548 +5.6%((k))
sales
(a) Excluding Venezuela: +25.9%; (b) Excluding Venezuela: +0.4%; (c) Excluding
Venezuela: +15.2%; (d) Excluding Venezuela: -6.9%; (e) Excluding Venezuela:
+3.4%;
(f) Excluding Venezuela: -1.0%; (g) Excluding Venezuela: -4.1%; (h) Excluding
Venezuela: +2.2%; (i) Excluding Venezuela:+1.5%; (j) Excluding Venezuela:
+3.3%; (k) Excluding Venezuela: +6.6%.
(7) See Appendix 8 for definitions of financial indicators.
The table below presents sales by global franchise for the first nine months of
2016.
Net sales by Change Developed Change Emerging Change
Franchise 9M 2016 (CER) Markets (CER) Markets (CER)
(? million)
Specialty Care 4,381 +18.8%((a)) 3,684 +19.1% 697 +17.5%((b))
Diabetes and 5,723 -1.8% 4,687 -3.9% 1,036 +8.2%((c))
Cardiovascular
Established Products 7,743 -8.5%((d)) 4,930 -11.6% 2,813 -2.9%((e))
Consumer Healthcare 2,496 -2.9%((f)) 1,584 +1.7% 912 -9.3%((g))
(CHC)
Generics 1,386 +0.8%((h)) 810 +0.9% 576 +0.8%((i))
Vaccines 3,225 +11.0%((j)) 2,268 +9.2% 957 +15.3%((k))
Animal Health 2,109 +10.3% 1,645 +7.4% 464 +21.1%
Total Aggregate net 27,063 +1.2%((l)) 19,608 +0.5% 7,455 +3.0%((m))
sales
(a) Excluding Venezuela : +19.3%; (b) Excluding Venezuela : +20.1%; (c)
Excluding Venezuela : +12.9%; (d) Excluding Venezuela : -6.1%; (e) Excluding
Venezuela : +4.4%; (f) Excluding Venezuela: +0.7%; (g) Excluding Venezuela:
-0.7%; (h) Excluding Venezuela: +3.0%; (i) Excluding Venezuela: +5.7%; (j)
Excluding Venezuela: +11.3%;(k) Excluding Venezuela: +16.5%; (l) Excluding
Venezuela: +2.8%; (m) Excluding Venezuela: +8.7%.
Pharmaceuticals
Third-quarter sales for Pharmaceuticals increased 0.5% to ?7,225 million. Growth
in the Multiple Sclerosis, Rare Disease and Cardiovascular franchises offset a
decrease in Diabetes, CHC and Established Rx Products. Year-to-date sales for
Pharmaceuticals decreased 0.9% to ?21,729 million. Excluding Venezuela, year-to-
date sales for Pharmaceuticals increased 0.9%.
Rare Disease franchise
Net sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
Cerezyme(®) 183 +1.6% 564 +4.5%
Myozyme(® )/ Lumizyme(®) 185 +16.0% 533 +12.8%
Fabrazyme(®) 176 +20.4% 492 +15.0%
Aldurazyme(®) 53 +12.5% 151 +7.5%
Cerdelga(®) 28 +55.6% 77 +75.0%
Total Rare Diseases 708 +14.3% 2,061 +12.4%
In the third quarter, Gaucher (Cerezyme(®) and Cerdelga(®)) sales grew 6.3% to
?211 million, reflecting Cerezyme(®) growth in Emerging Markets (up 26.9% to ?56
million) and the increasing contribution of Cerdelga(®) (?28 million versus ?18
million in the third quarter of 2015). Year-to-date Gaucher sales increased
9.5% to ?641 million.
Third-quarter sales of Fabrazyme(®) increased 20.4% to ?176 million. The strong
global momentum of Fabrazyme(®) is a result of continued accrual of new patients
as a result of patients switching from competing products and earlier stage
patient identification and treatment. Year-to-date sales of Fabrazyme(®) were up
15.0% to ?492 million.
Sales of Myozyme(®)/Lumizyme(®) increased 16.0% to ?185 million in the third
quarter, mainly due to new patient accruals as a consequence of increased
patient identification. Year-to-date sales of Myozyme(®)/Lumizyme(®) increased
12.8% to ?533 million.
Multiple Sclerosis franchise
Net sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
Aubagio(®) 334 +49.8% 928 +56.8%
Lemtrada(®) 112 +69.1% 308 +95.1%
Total Multiple Sclerosis 446 +54.3% 1,236 +64.9%
Third-quarter sales of Aubagio(®) were up 49.8% to ?334 million driven by the
U.S. (up 50.9% to ?239 million) and Europe (up 41.5% to ?75 million). Aubagio(®)
is currently the fastest growing oral disease modifying therapy in the Multiple
Sclerosis market with patient market share of 9.0% in the U.S. (IMS NSP TRX -
second week of October). Year-to-date sales of Aubagio(®) increased 56.8% to
?928 million.
In the third quarter, sales of Lemtrada(®) increased 69.1% to ?112 million,
including ?64 million in the U.S. (up 66.7%) and ?37 million in Europe (up
81.8%), mainly generated in the UK. Year-to-date sales of Lemtrada(®) were up
95.1% to ?308 million.
Oncology franchise
Net sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
Jevtana(®) 88 +12.8% 266 +12.7%
Thymoglobulin(®) 70 +12.7% 204 +11.2%
Taxotere(®) 45 -22.4% 137 -18.5%
Eloxatin(®) 43 -24.1% 129 -19.5%
Mozobil(®) 39 +8.3% 111 +7.6%
Zaltrap(®) 16 -10.5% 50 -13.6%
Total Oncology 363 -2.4% 1,084 -1.6%
In the Third quarter, Oncology sales decreased 2.4% to ?363 million, reflecting
lower sales of Taxotere(®) and Eloxatin(®). Year-to-date sales of Oncology were
?1,084 million, down 1.6%.
Sales of Jevtana(®) increased 12.8% to ?88 million in the third quarter led by
the U.S. (up 21.9% to ?38 million) and Japan. Year-to-date sales of Jevtana(®)
were up 12.7% to ?266 million.
Third-quarter Thymoglobulin(®) sales increased 12.7% to ?70 million supported by
sales in China. Year-to-date sales of Thymoglobulin(®) were up 11.2% to ?204
million.
Third-quarter sales of Eloxatin(® )were down 24.1% to ?43 million reflecting
generic competition in Canada. Over the same period, sales of Taxotere(®)
(docetaxel) decreased 22.4% (to ?45 million) due to generic competition in
Japan. Year-to-date sales of Taxotere(®) and Eloxatin(®) were down 18.5% (?137
million) and down 19.5% (?129 million), respectively.
Diabetes franchise
Net sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
Lantus(®) 1,391 -9.8% 4,251 -10.7%
Toujeo(®) 167 265.2% 411 ns
Total glargine 1,558 -1.9% 4,662 -3.5%
Amaryl(®) 92 +1.1% 273 -4.7%
Apidra(®) 94 +6.8% 272 +2.2%
Insuman(®) 32 -8.3% 98 0.0%
BGM (Blood Glucose Monitoring) 16 +6.7% 50 +6.4%
Lyxumia(®) 9 -11.1% 26 -3.7%
Total Diabetes 1,805 -1.5% 5,396 -3.0%((a))
(a) Excluding Venezuela: -2.3%;
In the third quarter, Diabetes franchise sales were down 1.5% to ?1,805 million,
reflecting lower sales of Lantus(®) in the U.S. Third-quarter U.S. Diabetes
sales were down 5.4% to ?1,013 million. Outside the U.S., sales were ?792
million, an increase of 3.9% driven by Emerging Markets (up 13.6% to ?341
million). Sales in Europe were ?325 million, a decrease of 0.6%. In Europe,
sales of Toujeo(®) offset lower sales of Lantus(®). Year-to-date sales for the
Diabetes franchise were ?5,396 million, down 3.0%.
Third-quarter sales of Sanofi's glargine (Lantus(®) and Toujeo(®)) were ?1,558
million, down 1.9%. In the U.S., Sanofi's glargine sales of ?980 million were
down 5.1%. In Europe, sales of Sanofi's glargine increased 0.4% to ?248 million
despite the launch of a biosimilar glargine in several European markets. Year-
to-date sales of Sanofi's glargine were ?4,662 million, down 3.5%.
Over the quarter, sales of Lantus(®) were ?1,391 million down 9.8%. In the U.S.,
as anticipated, sales of Lantus(®) decreased 13.5% to ?858 million mainly
reflecting lower average net price and patients switching to Toujeo(®). In
Europe, third-quarter Lantus(®) sales were ?215 million (down 11.0%) while in
Emerging Markets, sales were ?232 million (up 13.4%) driven by China and Russia.
Year-to-date sales of Lantus(®) were ?4,251 million, down 10.7%.
Third-quarter sales of Toujeo(®) were ?167 million of which ?122 million were
recorded in the U.S. and ?33 million were from Europe. The global roll-out of
this product continues and Sanofi expects Toujeo(®) to be available in over 40
countries by the end of 2016. In Japan, the two-week prescription limit was
lifted in September 2016, resulting in a significant increase in market share
(9.2% the second week of October- IMS Market Share of the Basal insulin market
in International Units). Year-to-date sales of Toujeo(®) were ?411 million.
Sales of Amaryl(®) were ?92 million, up 1.1% in the third quarter, of which ?74
million were generated in Emerging Markets (up 6.8%). Year-to-date sales of
Amaryl(®) were ?273 million, down 4.7%.
Third-quarter sales of Apidra(®) were up 6.8% to ?94 million, reflecting lower
sales in the U.S. (down 8.8% to ?31 million), which were more than offset by the
performance in Emerging Markets (up 33.3% to ?19 million) and Europe (up 10.0%
to ?32 million). Year-to-date sales of Apidra(®) increased 2.2% to ?272 million.
Sanofi has recently been informed by U.S. payers of the 2017 formulary status
for its products. Despite the anticipated introduction of biosimilar glargine,
Lantus(®) and Toujeo(®) remain competitively positioned on the vast majority of
formularies in the U.S. Given the recent performance of our diabetes franchise
in the EU and Emerging Markets, as well as the aforementioned coverage in the
U.S., Sanofi continues to expect global diabetes sales over the period from
2015 to 2018 to decline at an average annualized rate of between 4% and 8% at
CER.
Cardiovascular franchise
Praluent(®) (alirocumab, collaboration with Regeneron) was launched in the U.S.
and in a number of European markets in 2015 and 2016. Third-quarter sales of
Praluent(®) were ?35 million of which ?28 million were in the U.S. and ?6
million in Europe. Praluent(®) was launched in Japan in July. Year-to-date sales
of Praluent(®) were ?68 million reflecting significant payer utilization
management restrictions in the U.S. and limited market access in Europe.
Third-quarter sales and first nine-month sales of Multaq(®) were ?89 million (up
3.5%) and ?259 million (up 1.6%), respectively. In August 2016, the District
Court of Delaware ruled in favor of Sanofi in the Multaq(®) patent litigation
holding that the defendants infringe both of the patents at suit; the '800
Formulation patent and the 167 Method of Use patent, expiring in 2018 and 2029,
respectively. Both defendants appealed that ruling in September.
Established Rx Products
Net sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
Plavix(®) 401 -9.9% 1,181 -18.5%((b)())
Lovenox(®) 404 -4.0% 1,222 -2.5%((c))
Renvela(®)/Renagel(®) 245 +2.9% 687 -0.6%
Aprovel(®)/Avapro(®) 174 +7.2% 518 -8.4%((d))
Synvisc(® )/Synvisc-One(®) 100 +4.2% 297 +1.3%
Myslee(®)/Ambien(®)/Stilnox(®) 77 +1.4% 225 +0.5%
Allegra(®) 31 -18.2% 145 -10.0%
Other 1,103 -12.7% 3,468 -9.3%((e))
Total Established Rx Products 2,535 -7.4%((a)) 7,743 -8.5%((f))
(a) Excluding Venezuela: -6.9%; (b) Excluding Venezuela: -16.3%; (c) Excluding
Venezuela: -1.7%; (d) Excluding Venezuela: -0.4%; (e) Excluding Venezuela:
-6.5%; (f) Excluding Venezuela: -6.1%;
Third-quarter sales of Established Rx Products decreased 7.4% to ?2,535 million,
reflecting generic competition to Plavix(®) in Japan, the impact of the
termination of Auvi-Q(®) commercialization in the U.S. and lower sales in
Venezuela. Excluding Venezuela and Auvi-Q(®), sales of Established Rx Products
were down 4.8%. In Emerging Markets, sales of Established Rx Products were ?948
million, up 1.7% (up 3.4% excluding Venezuela). In the U.S., sales of
Established Rx Products were down 13.2% (to ?375 million). Excluding Auvi-Q(®),
sales of Established Rx Products were down 0.5% in the U.S. In Europe, sales of
Established Rx Products decreased 7.6% to ?856 million. Year-to-date sales of
Established Rx Products decreased 8.5% to ?7,743 million and 6.1% excluding
Venezuela.
In the third quarter, sales of Lovenox(®) decreased 4.0% to ?404 million
reflecting generic competition in the U.S. (down 25.0% to ? 12 million) and
lower sales in Europe (down 2.3% to ?248 million) and in Emerging Markets (down
3.1% to ?120 million). In September, two enoxaparin biosimilars were approved in
the European Union. Year-to-date sales of Lovenox(®) were ?1,222 million down
2.5%.
Third-quarter sales of Plavix(®) decreased 9.9% to ?401 million due to generic
competition in Japan that started in June 2015 (sales in Japan were down 48.3%
to ?88 million), which was partially offset by the growth in China (up 18.1% to
?190 million). Year-to-date sales of Plavix(®) decreased 18.5% to ?1,181 million
(16.3% excluding Venezuela).
Sales of Renvela(®)/Renagel(®) were up 2.9% to ?245 million in the third quarter
driven by the U.S. (?206 million, up 8.4%). In Europe, sales of
Renvela(®)/Renagel(®) were down 27.6% to ?20 million due to generics
competition. Sanofi now expects generic competition in the U.S. in the first
half of 2017. Year-to-date sales of Renvela(®)/Renagel(®) decreased 0.6% to ?687
million.
Sales of Aprovel(®)/Avapro(®) increased 7.2% to ?174 million in the third
quarter. Year-to-date sales of Aprovel(®)/Avapro(®) decreased 8.4% to ?518
million (stable excluding Venezuela).
In the third quarter and the first nine months of 2015, sales of Auvi-Q(®) and
Allerject(®) were ?61 million and ?113 million, respectively. Sanofi no longer
commercializes this product and no sales were recorded in 2016.
Consumer Healthcare
Net sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
Allegra(®) 94 +3.3% 331 -2.9%
Doliprane(®) 69 +7.7% 223 +2.3%
Enterogermina(®) 38 +18.2% 123 +2.4%
Essentiale(®) 29 -30.4% 100 -22.0%
Nasacort(®) 23 -14.8% 91 -8.9%
Lactacyd(®) 20 -23.1% 61 -29.8%
Maalox(®) 18 -9.5% 63 -10.7%
No Spa(®) 22 4.5% 62 +3.0%
Magne B6(®) 19 -9.5% 55 -6.5%
Dorflex(®) 21 -4.8% 55 -3.1%
Other CHC Products 438 +0.9% 1,332 +0.3%
Total Consumer Healthcare 791 -1.2%((a)) 2,496 -2.9%((b))
(a) Excluding Venezuela: -1.0%; (b) Excluding Venezuela: +0.7%;
In the third-quarter, Consumer Healthcare (CHC) sales were ?791 million, down
1.2%. Excluding Venezuela and the divestiture of smaller products, CHC sales
decreased 0.1% impacted by Russia. Third-quarter sales of CHC in the U.S.
increased 3.3% to ?216 million. This was driven by a solid performance across
the portfolio partially offset by Allegra(®) (up 1.9% to ?54 million) and
Nasacort(®) (down 20.8% to ?19 million), which were both impacted by a mild U.S.
allergy season. In addition, Nasacort(®) is facing an increasingly competitive
environment.
In Emerging Markets, sales were down 4.7% to ?312 million (down 4.1% excluding
Venezuela) reflecting lower sales in Russia. In Russia, sales were significantly
impacted by the challenging local economic situation. In the quarter, sales in
Europe decreased 1.5% to ?195 million reflecting the divestitures of small
products and the solid performance of Doliprane(®) (up 9.4% to ?58 million).
Year-to-date sales of CHC reached ?2,496 million, down 2.9% (up 2.3% excluding
Venezuela and the divestiture of several small products).
Sanofi continues to expect the exchange of Sanofi's animal health business with
Boehringer Ingelheim's consumer healthcare business (initiated in December 2015
and signed in June 2016) to close around year-end 2016, subject to approval by
regulatory authorities in different territories.
Generics
Third-quarter sales of Generics increased 1.3% to ?453 million (up 2.2%
excluding Venezuela) driven by the U.S. (up 8.3% to ?38 million) and Europe (up
2.0% to ?197 million), which more than offset the slight decrease in Emerging
Markets (down 0.5% to ?196 million). Year-to-date sales of Generics were up
0.8% to ?1,386 million (up 3.0% excluding Venezuela).
As announced in our 2020 strategic roadmap, Sanofi has carefully reviewed all
options and has decided to initiate a carve-out process in order to divest its
Generics business in Europe. Sanofi will be looking for a potential acquirer
that will leverage the mid and long-term sustainable growth opportunities for
this business. Sanofi confirms its commitment to its Generics business in other
parts of the world and will further focus on the Emerging Markets in order to
develop its business in those countries.
Vaccines
Net sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
Polio/Pertussis/Hib vaccines
(incl. Pentacel(®), Pentaxim(® )and 324 -0.3% 951 +10.7%
Imovax(®))
Meningitis/Pneumonia vaccines 254 -1.5% 515 +4.2%
(incl. Menactra(®))
Adult Booster vaccines (incl. Adacel (®)) 104 -21.1% 288 -15.6%
Influenza vaccines 989 +34.6% 1,105 +28.0%
(incl. Vaxigrip(®) and Fluzone(®))
Travel and other endemic vaccines 77 -18.8% 261 -2.5%
Dengvaxia(®) 30 - 50
Other vaccines 25 -24.1% 55 -30.8%
Total Vaccines (consolidated sales) 1,803 +14.4% 3,225 +11.0%(*(a))
*Comparability based on the new presentation of VaxServe sales (see below)
(a) Excluding Venezuela: +11.3%;
VaxServe sales
VaxServe is a U.S. entity of the Vaccines segment. VaxServe activities include
products distribution in the U.S. in channels that are not the primary focus of
Sanofi Pasteur. VaxServe complements its Sanofi Pasteur products offering by
distributing vaccines and other products from third party manufacturers. All
VaxServe sales were reported on the line Net sales in the past.
In order to provide more relevant published information, VaxServe sales of non-
Sanofi products are reported in the line Other revenues in the income statement
from January 1, 2016. Accordingly, prior period comparative net sales have been
reclassified to the line Other revenues.
The 2015 quarterly and full-year 2015 business P&L as well as sales of GBUs and
franchises by geographic region reflecting this reclassification are available
on the Investors section of Sanofi's website.
In the third quarter of 2015 and in full-year 2015, sales of VaxServe((8)) of
non-Sanofi products were ?136 million and ?482 million, respectively.
Vaccines
In the third quarter, consolidated Vaccines sales increased 14.4% to ?1,803
million driven by the U.S (up 19.1% to ?1,261 million) supported by the flu
vaccines franchise. In Emerging Markets sales of vaccines increased 6.6% driven
by the solid performance of our AcXim family (excluding China) and the launch of
Dengvaxia(®) partially offset by a local market disruption in China. Year-to-
date sales of Sanofi Pasteur were up 11.0% to ?3,225 million.
Third quarter sales of Polio/Pertussis/Hib Vaccines were down slightly (0.3%) to
?324 million. In Emerging Markets, sales of the franchise decreased 2.2% to ?170
million impacted by the local market disruption in China resulting in lower
sales of Pentaxim(®) and Polio vaccines and offsetting the growth of Pentaxim(®)
and Hexaxim(®) in other regions. In the U.S., sales of Polio/Pertussis/Hib
Vaccines decreased 8.0% to ?91 million reflecting lower sales of Pentacel(®)
(down 18.9% to ?61 million). As previously communicated, Sanofi Pasteur is
experiencing Pentacel(®) manufacturing delays and supply is expected to improve
by late fourth quarter 2016. Year-to-date sales of Polio/Pertussis/Hib vaccines
were up 10.7% to ?951 million.
Dengvaxia(®), the world's first dengue vaccine is now approved in 13 countries
(Bolivia, Brazil, Cambodia, Costa Rica, El Salvador, Guatemala, Indonesia,
Mexico, Paraguay, Peru, the Philippines, Thailand, and Singapore). In the third
quarter of 2016, sales of Dengvaxia(®) were ?30 million reflecting the second
shipment for the public dengue immunization program in the Philippines, the
first dose of the public vaccination program in Paraná State in Brazil, as well
as sales on the private market. Year-to-date sales of Dengvaxia(®) were ?50
million.
Sales of Influenza vaccines increased 34.6% to ?989 million in the third
quarter, driven by the U.S. (up 45.0% to ?834 million) reflecting favorable
phasing as well as Sanofi Pasteur's strategy to offer differentiated influenza
vaccines. Year-to-date sales of Influenza vaccines were up 28.0% to ?1,105
million.
Third-quarter Menactra(®) sales were up 1.7% to ?242 million, of which ?219
million was generated in the U.S (down 1.3%). Year-to-date sales of Menactra(®)
increased 5.7% to ?479 million.
Adult Booster vaccines sales decreased 21.1% to ?104 million in the third
quarter, impacted by increased competitive pressure in the U.S. towards
Adacel(®) and a contraction of the U.S. Tdap (Tetanus, Diphtheria, acellular
Pertussis) market. Year-to-date sales of Adult Booster vaccines decreased 15.6%
to ?288 million.
(8) Sales of VaxServe in Q3 2016 and in the first nine month of 2016 are
provided in the Financial Results
Third-quarter sales of Travel and other endemic vaccines were ?77 million, down
18.8% due to a supply constraint for rabies and hepatitis A vaccines. Year-to-
date sales of Travel and other endemic vaccines decreased 2.5% to ?261 million.
Sales of Sanofi Pasteur MSD (not consolidated), the joint venture with Merck &
Co. in Europe, increased 5.2% (on a reported basis) to ?299 million driven by
Hexyon(®) (pediatric hexavalent vaccine) and Gardasil(®). Year-to-date sales of
Sanofi Pasteur MSD were up 9.4% (on a reported basis) to ?639 million. In March,
Sanofi Pasteur and Merck announced their intent to end their joint vaccines
operations in Europe, Sanofi Pasteur MSD, to pursue their own distinct growth
strategies in Europe. Sanofi Pasteur and Merck expect the separation to be
completed by the end of 2016, subject to local labor laws and regulations as
well as regulatory approvals.
Animal Health((9))
Net sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
Companion Animal 400 +0.7% 1,422 +10.1%
Production Animal 224 +10.2% 687 +10.8%
Total Animal Health 624 +4.0% 2,109 +10.3%
of which vaccines 202 +3.0% 619 +8.5%
of which fipronil products 112 -17.4% 462 -10.1%
of which avermectin products 111 -4.3% 423 +6.2%
In the third quarter, Animal Health sales increased 4.0% to ?624 million driven
by strong performance of Ruminant business in the U.S. and NexGard(®). Year-to-
date sales of Animal Health were up 10.3% to ?2,109 million.
Third-quarter sales of the Companion Animals segment were up 0.7% to ?400
million reflecting the strong performance of NexGard(®) (Merial's next
generation flea and tick products for dogs in the U.S.) and NexGard(®) Spectra
as well as lower sales of the Frontline(®) family of products and HeartGard(®)
mostly linked to phasing of promotional activities. Year-to-date sales of the
Companion Animals segment were up 10.1% to ?1,422 million.
Sales of the Production Animals segment were up 10.2% to ?224 million in the
third quarter due to strong performance of Ruminant business in the U.S. Year-
to-date sales of the Production Animals segment were up 10.8% to ?687 million.
Aggregate Company sales by geographic region
Aggregate Sanofi sales (? million) Q3 2016 Change 9M 2016 Change
(CER) (CER)
United States 4,001 +7.0% 10,085 +3.5%
Emerging Markets((a)) 2,548 +5.6% 7,455 +3.0%
of which Latin America 714 +8.5% 1,983 -8.5%
of which Asia 853 +4.0% 2,490 +8.0%
of which Africa, Middle East and South 699 +8.1% 2,103 +10.0%
Asia((b))
of which Eurasia((c)) 251 -1.1% 780 +4.4%
Europe((d)) 2,264 -0.5% 6,996 +1.5%
Rest of the World((e)) 839 -12.2% 2,527 -12.6%
of which Japan 421 -21.4% 1,314 -23.9%
Total Aggregate Sanofi sales 9,652 +3.0% 27,063 +1.2%
(a) World excluding U.S., Canada, Western & Eastern Europe (except Eurasia),
Japan, South Korea, Australia, New Zealand and Puerto Rico
(b) India, Pakistan, 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
Third-quarter Aggregate sales in the U.S. grew 7.0% to ?4,001 million driven
mainly by double digit growth of the multiple sclerosis franchise (up 54.0%),
rare disease franchise (up 10.7%) and Vaccines (up 19.1%). The U.S. sales
performance also included lower sales of the diabetes franchise (down 5.4%), and
the withdrawal of Auvi-Q(®) from the market in the fourth quarter of 2015. Year-
to-date sales in the U.S. increased 3.5% to ?10,085 million.
(9) Merial is reported on a single line in the consolidated income statements in
accordance with IFRS 5 (Non-current assets held for sale and discontinued
operations). As of September 30,2016, Sanofi continues to report the performance
of Merial, which remained an operating segment consistent with IFRS 8.
Aggregate sales in Emerging Markets increased 5.6% to ?2,548 million in the
third quarter (up 6.6% excluding Venezuela) driven by Rare Disease (up 41.5%),
Diabetes (up 13.6%) and Animal Health (up 13.3%). In the Asia region, Aggregate
sales grew 4.0% to ?853 million in the third quarter reflecting lower sales in
China (down 1.5% to ?551 million), where the local vaccines market disruption
offset the strong performance of Pharmaceuticals (up 13.6%). In Latin America,
third-quarter Aggregate sales increased 8.5% to ?714 million (up 12.3% excluding
Venezuela) driven by sales in Argentina, Mexico and Brazil. Aggregate sales in
Brazil increased 4.4% to ?302 million driven by the strong performance of rare
diseases and the contribution of Dengvaxia(®). Aggregate sales in the Eurasia
region were down 1.1% to ?251 million reflecting lower sales in Russia (down
18.2% to ?110 million) despite strong performance in Turkey. Sales in Russia
were impacted by lower CHC sales which more than offset the strong performance
of diabetes and Established products. In Africa, the Middle-East and South Asia,
Aggregate sales were up 8.1% to ?699 million sustained by Middle-East (up
10.1%) and India. Year-to-date sales in Emerging Markets increased 3.0% to
?7,455 million. Excluding Venezuela, Aggregate year-to-date sales in Emerging
Markets grew 8.7%.
Third-quarter Aggregate sales in Europe decreased 0.5% to ?2,264 million. The
performance of Multiple Sclerosis (up 53.3%) and Rare Disease (up 8.3%) were
offset by lower sales of Established products (-7.6%). In Europe, year-to-date
sales increased 1.5% to ?6,996 million.
Aggregate third-quarter sales in Japan decreased 21.4% to ?421 million, impacted
by generic Plavix(® )competition (down 48.3%). In Japan, year-to-date sales
decreased 23.9% to ?1,314 million.
R&D update
Consult Appendix 6 for full overview of Sanofi's R&D pipeline
Regulatory update
Regulatory updates since the publication of the second quarter results on July
29, 2016 include the following:
* In September, the U.S. Food and Drug Administration (FDA) accepted for
priority review the Biologics License Application (BLA) for Dupixent(®)
(dupilumab) for the treatment of adult patients with inadequately controlled
moderate-to-severe atopic dermatitis. The application has been given a
Prescription Drug User Fee Act (PDUFA) target action date of March
29, 2017. Furthermore, in October the FDA granted breakthrough designation
status for Dupilumab in atopic dermatitis ages 12-18 moderate to severe
patients and ages 6-11 for severe patients.
* In September, the Marketing Authorization Application of SAR342434 (insulin
lispro) was accepted for review in the European Union for the treatment of
diabetes.
* In August, Sanofi submitted updated information on the pen delivery device
as part of the New Drug Application (NDA) for iGlarLixi (also known as
LixiLan, the investigational once-daily fixed-ratio combination of basal
insulin glargine and GLP-1 receptor agonist lixisenatide) for the treatment
of adults with type 2 diabetes. The additional information, submitted at
FDA's request, constitutes a Major Amendment to the NDA, resulting in an
extension of the Prescription Drug User Fee Act goal date by three months,
to late November 2016.
* In July, the sarilumab Marketing Authorization Application was accepted for
review by the European Medicines Agency.
* Manufacturing deficiencies have been raised by the FDA during a routine
Current Good Manufacturing Practice (CGMP) inspection of a Sanofi
manufacturing facility, which conducts "fill and finish" activities. Sanofi
has provided comprehensive responses to the FDA for the cited deficiencies.
Given that the CGMP status of this facility is still under review by the
FDA, it is unclear whether this situation will impact the approval for
sarilumab on its PDUFA date of October 30, 2016.
At the end of October 2016, the R&D pipeline contained 43 pharmaceutical new
molecular entities (excluding Life Cycle Management) and vaccine candidates in
clinical development of which 12 are in Phase III or have been submitted to the
regulatory authorities for approval.
Portfolio update
Phase III:
* In October, detailed results from LIBERTY AD SOLO 1 and SOLO 2, two placebo-
controlled Phase 3 studies evaluating Dupixent(®) (dupilumab) in adult
patients with inadequately controlled moderate-to-severe atopic dermatitis
were presented at the Annual European Academy of Dermatology and Venereology
(EADV) Congress and published in The New England Journal of Medicine (NEJM).
* Positive new six-year investigational data from the extension study of
Lemtrada(®) (alemtuzumab) in patients with relapsing remitting multiple
sclerosis (RRMS) were presented in September at the Congress of the European
Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS).
* A new post-hoc analysis of data from the LixiLan-L pivotal Phase III
clinical trial was presented at the European Association for the Study of
Diabetes (EASD) and found that more patients who received iGlarLixi (the
fixed-ratio combination of insulin glargine and GLP-1 receptor agonist
lixisenatide) reached their daily post-prandial glucose target than those
who received only insulin glargine. IGlarLixi is currently under review in
the United States and Europe.
* Detailed positive results from ODYSSEY ESCAPE, a Phase III trial which
evaluated Praluent(®) (alirocumab) injection in patients with an inherited
form of high cholesterol known as heterozygous familial hypercholesterolemia
(HeFH) who require regular apheresis treatment were presented at the ESC
Congress.
* In October, Alnylam announced the development discontinuation of revusiran,
an investigational RNA interference therapeutic that was being developed for
the treatment of hereditary ATTR amyloidosis with cardiomyopathy.
Phase II:
* GZ389988, a TRKA antagonist, entered Phase IIa in osteoarthritis.
Phase I:
* SAR440340, a monoclonal antibody (alliance with Regeneron), entered Phase I
in immuno-inflammation therapeutic area.
* SAR247799, a S1P1 agonist entered Phase I in the cardiovascular portfolio.
* It has been decided not to pursue the development of SAR366234, an EP2
receptor agonist.
Collaboration
* In September, Sanofi and Verily Life Sciences LLC, (formerly Google Life
Sciences), an Alphabet company, announced the launch of Onduo, a joint
venture created through Sanofi and Verily's diabetes-focused collaboration.
Onduo's mission is to help people with diabetes live full, healthy lives by
developing comprehensive solutions that combine devices, software, medicine,
and professional care to enable simple and intelligent disease management.
2016 third-quarter and first nine months Aggregate financial results((10))
Business Net Income((10))
In the third quarter of 2016, Sanofi generated Aggregate sales of ?9,652
million, an increase of 2.1% (up 3.0% at CER). Year-to-date Aggregate sales were
?27,063 million, down 1.3% (up 1.2% at CER).
Aggregate other revenues increased 22.7% to ?276 million and include VaxServe
sales of non-Sanofi products (up 38.2% to ?188 million) following the change in
presentation as of January 1, 2016((11)). Year-to-date Aggregate other revenues
increased 1.0% to ?604 million of which ?360 million were generated by VaxServe
(up 4.0%)
Third-quarter Aggregate gross profit increased 3.8% to ?6,933 million and 4.6%
at CER. The Aggregate gross margin ratio improved by 1.1 percentage points to
71.8% versus the third quarter of 2015. The positive impact from the multiple
sclerosis and rare disease franchises, pharmaceuticals in China and industrial
productivity largely offset the negative impact of U.S. Diabetes, and Plavix(®)
generic competition in Japan. Sanofi now expects its 2016 Aggregate gross margin
ratio to be around 70% at CER. Year-to-date Aggregate gross margin ratio
improved by 0.6 percentage points to 71.0% versus the first nine months of 2015.
Aggregate Research and Development expenses decreased 6.5% to ?1,267 million,
(down 6.4% at CER) in the third quarter. This decrease reflected lower spend on
Praluent and dupilumab combined with cost containment actions. In the first
nine months of 2016, the ratio of Aggregate R&D to Aggregate sales was 0.3
percentage points higher at 14.3% compared to the same period of 2015.
Aggregate selling general and administrative expenses (SG&A) increased 1.1% to
?2,489 million in the third quarter. At CER, Aggregate SG&A was up 1.8% mainly
reflecting pre-launch costs for sarilumab and dupilumab and the costs related to
an earlier Flu campaign in the U.S. General & Administrative expenses decreased
2.4% at CER largely due to cost savings initiatives. The ratio of Aggregate
SG&A to Aggregate sales decreased 0.2 percentage points to 25.8% compared with
the third quarter of 2015. In the first nine months of 2016, the ratio of
Aggregate selling and general expenses to Aggregate sales was 0.4 percentage
points higher at 27.9% compared with the first nine months of 2015.
Third-quarter Aggregate other current operating income net of expenses was -?121
million versus -?136 million for the same period of 2015. In the third quarter
of 2016, this line included a charge of ?90 million related to a settlement of a
litigation related to Cipro(®) generic. In the first nine months of 2016, other
current operating income net of expenses was -?65 million versus -?223 million
for the same period of 2015.
The Aggregate share of profits from associates was ?72 million in the third
quarter. The Aggregate share of profits from associates included Sanofi's share
in Regeneron profit as well as Sanofi's share of profit in Sanofi Pasteur MSD
(the Vaccines joint venture with Merck & Co. in Europe). In the first nine
months of 2016, the share of profits from associates was ?125 million versus
?139 million for the same period of 2015.
Aggregate non-controlling interests were -?31 million in the third quarter
versus -?25 million in the third quarter of 2015. In the first nine months of
2016, non-controlling interests were -?81 million versus -?87 million for the
same period of 2015.
Third-quarter Aggregate business operating income was up 11.3% to ?3,097
million. At CER, Aggregate business operating income increased 12.8%. The ratio
of Aggregate business operating income to Aggregate net sales increased 2.7
percentage points to 32.1% versus the same period of 2015. Year-to-date
Aggregate business operating income increased 0.2% to ?7,766 million (or up
3.6% at CER). In the first nine months of 2016, the ratio of Aggregate business
operating income to Aggregate sales increased 0.5 percentage points to 28.7%.
Net Aggregate financial expenses were ?84 million in the third quarter versus
?105 million in the third quarter of 2015 reflecting lower cost of debt. Year-
to-date net financial expenses were ?278 million versus ?314 million for the
same period of 2015.
Third-quarter effective tax rate (including Animal Health) was 24.0% compared
with 22.2% in the same periods of 2015. Year-to-date effective tax rate was
24.0% stable versus the same period of 2015.
Third-quarter business net income((10)) increased 9.7% to ?2,300 million (up
11.1% at CER). The ratio of business net income to Aggregate sales was 23.8%, an
increase of 1.6 percentage points compared with the third quarter of 2015. Year-
to-date business net income increased 0.7% to ?5,702 million, (up 4.1% at CER).
The ratio of business net income to net sales increased 0.5 percentage points to
21.1% compared to the first nine months of 2015.
(10) See Appendix 4 for 2016 third-quarter and 2016 first nine months
Consolidated income statement; see Appendix 8 for definitions of financial
indicators, and Appendix 3 for reconciliation of business net income to IFRS net
income reported. (11) See page 7, chapter on Vaccines
+------------------------------------------------------------------------------+
|In the third quarter of 2016, business earnings per share((10)) (EPS)|
|increased 11.2% to ?1.79 on a reported basis and 12.4% at CER. The average|
|number of shares outstanding was 1,288.5 million in the third quarter of 2016 |
|versus 1,305.5 million in the third quarter of 2015. In the first nine months|
|of 2016, business earnings per share((10)) was ?4.43, up 2.3% on a reported|
|basis and up 5.8% at CER. The average number of shares outstanding was|
|1,287.9 million in the first nine months of 2016 versus 1,306.6 million in the|
|first nine months of 2015. |
+------------------------------------------------------------------------------+
2016 guidance
Given the performance in the first nine months, Sanofi now expects 2016 Business
EPS((2)) to grow between 3% and 5% at CER, barring unforeseen major adverse
events. In addition, the currency impact on 2016 full-year business EPS is
estimated to be around -4%, applying September 2016 average rates to the fourth
quarter of 2016.
From business net income to IFRS net income reported (see Appendix 3)
In the first nine months of 2016, the main reconciling items between business
net income and IFRS net income reported were:
* A ?1,280 million amortization charge related to fair value remeasurement on
intangible assets of acquired companies (primarily Aventis: ?379 million and
Genzyme: ?647 million) and to acquired intangible assets (licenses/products:
?104 million). A ?403 million amortization charge on intangible assets
related to fair value remeasurement of acquired companies (primarily
Aventis: ?103 million and, Genzyme: ?216 million), and to acquired
intangible assets (licenses/products: ?36 million) was booked in the third
quarter. These items have no cash impact on the Company.
* An impairment of intangible assets of ?73 million (of which ?22 recorded in
the third quarter linked to revusiran). This item has no cash impact on the
Company.
* An impairment of ?161 million related to Alnylam investment for the
difference between historical cost and market value based on the stock price
as of September 30, 2016. On October 5, 2016, Alnylam announced the decision
to end revusiran development program. As a consequence, the Alnylam stock
price dropped by 48% on October 6, 2016.
* A charge of ?94 million (of which ?27 million in the third quarter)
reflecting an increase of Bayer contingent considerations linked to
Lemtrada(®) (charge of ?61 million, of which ?20 million on the third
quarter) and CVR fair value adjustment (charge of ?34 million, of which ?7
million on the third quarter).
* Restructuring costs and similar items of ?690 million (including ?63 million
in the third quarter) mainly related to transformation in Europe and North
America.
* A ?746 million tax effect arising from the items listed above, comprising
?450 million of deferred taxes generated by amortization charged against
intangible assets, ?234 million associated with restructuring costs (and
similar items), ?23 million associated with impairment of intangible assets
and ?23 million associated with fair value remeasurement of contingent
consideration liabilities. The third quarter tax effect was ?198 million,
including ?143 million of deferred taxes generated by amortization charged
against intangible assets, ?24 million associated with restructuring costs
(and similar items), a charge of ?7 million associated with impairment of
intangible asset and ?8 million associated with fair value remeasurement of
contingent consideration liabilities (see Appendix 3).
* In "Share of profits/losses from associates and joint-ventures", an income
of ?18 million net of tax (which included a charge of ?36 million related to
third quarter of 2016), mainly relating to the share of fair-value re-
measurement on assets and liabilities of associates and the share of
amortization of intangible assets of acquired associates and joint-ventures.
This item has no cash impact on the Company.
* A tax of ?113 million on dividends paid to shareholders of Sanofi.
(10) See Appendix 4 for 2016 third-quarter and 2016 first nine months
Consolidated income statement; see Appendix 8 for definitions of financial
indicators, and Appendix 3 for reconciliation of business net income to IFRS net
income reported
* In Animal Health items, a net expense of ?99 million (which included a net
expense of ?86 million related to the third quarter of 2016), mainly
relating to a tax expense arising from the preparation steps of the exchange
transaction with Boehringer Ingelheim and to the change in deferred tax
charge resulting from taxable temporary differences relating to investments
in subsidiaries since it is likely that these differences will reverse.
Capital Allocation
In the first nine months of 2016, net cash generated by operating activities
decreased 4.9% to ?4,761 million after capital expenditures of ?1,072 million
and an increase in working capital of ?862 million. This net cash flow has
contributed to finance a share repurchase (?1,403 million), dividend paid by
Sanofi (?3,759 million), acquisitions and partnerships net of disposals (?724
million) and restructuring costs and similar items (?513 million). As a
consequence, net debt increased from ?7,254 million at December 31, 2015 to
?8,905 million at the end of September 2016 (amount net of ?11,995 million cash
and cash equivalents).
Taking into account the future cash flow outlook and expected closing of the
asset swap with Boehringer Ingelheim around the end of 2016, the Company
announced a share repurchase program of ?3.5 billion that it will initiate in
2016 and complete by the end of 2017.
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 regul
Unternehmensinformation / Kurzprofil:
Datum: 28.10.2016 - 07:31 Uhr
Sprache: Deutsch
News-ID 503455
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contact information:
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